2014 Top 200 Director Compensation Study

2014 Director Compensation Study

September 30 2014

CoverSteven Hall & Partners recently completed the ninth annual study of compensation paid to non-employee directors at the 200 public companies with the largest revenues for the most recent fiscal year (fiscal 2013), which were also incorporated in the United States and publicly traded on United States-based securities exchanges.  Based on this study, we find that in 2013:

Total Compensation

  • Total compensation paid to non-employee directors rose +2.7% over 2012 levels, to a median of $268,333
  • Total compensation continues to be correlated to revenue size of the company
  • Energy companies continue to pay the highest compensation followed by information technology companies

Pay Mix

  • Directors continue to receive just over half of their total compensation in the form of equity (55% in 2013), in accordance with governance best practices
  • Board fees account for 89% of total compensation for the average director
    • Remaining 11% comprised of fees for committee service

Annual Board Retainers

  • Median cash retainer for board service was $90,000 in 2013
    • Represents a +6% increase over 2012 and a +24% increase since 2008
  • Median value of annual equity retainers for board service was $140,000
    • No increase from 2012 levels and a +17% increase over 2008 levels

Meeting Fees

  • Meeting fees continue to decline in prevalence
    • 24% pay fees for board meetings and 27% pay for committee meetings
  • Median per meeting fee remains unchanged at $2,000

Committee Fees (Retainers + Meeting Fees)

  • Median committee chair fees for the Audit, Compensation and Nominating/Governance committees equaled $25,000, $20,000 and $15,000, respectively
    • Prevalence ranged from 94% to 98%
  • Median committee member fees for the Audit, Compensation and Nominating/Governance committees equaled $15,000, $10,000 and $10,000, respectively
    • Prevalence ranged from 41% to 60%

Share Ownership Guidelines

  • 90% of the Top 200 disclosed the existence share ownership guidelines in 2013
    • 74% of guidelines are valued at a multiple of five times or greater the cash retainer

Total Board Cost

  • Total board cost for the Top 200 ranged from $38,800 to $8.2 million in 2013
    • Median was $2.8 million
  • Average cost per director ranged from $3,527 to $995,968 in 2013
    • Median was $252,717

PDF: Steven Hall and Partners 2014 Director Compensation Study