2016 Director Compensation Study | Steven Hall & Partners

2016 Director Compensation Study

December 30 2016

This represents Steven Hall & Partners’ eleventh annual study of compensation paid to non-employee directors.  Our review included 600 companies in the following three groups:

  • Top 200 – 200 companies with the largest revenues in fiscal 2015
  • Mid Cap 200 – 200 companies included in the S&P MidCap 400®
  • Small Cap 200 – 200 companies included in the S&P SmallCap 600®

Director compensation levels remain strongly correlated to the size and complexity of an organization, which is most commonly determined by annual revenues.  As expected, we observed greater compensation levels among companies in the Top 200, followed by the Mid Cap companies and Small Cap companies.  While Top 200 companies paid higher compensation levels, we note Small Cap companies had the greater year over year increase in median total compensation levels (+12.9%) and Top 200 companies had the smallest increase (+2.4%).  Additionally we found that in 2015:

Total Compensation

  • Median total compensation paid to non-employee directors equaled
    • $285,000 among Top 200 companies
    • $219,875 among Mid Cap 200 companies
    • $165,583 among Small Cap 200 companies
  • Total compensation increased (2015 vs. 2014)
    • +2.4% among Top 200 companies
    • +11.1% among Mid Cap 200 companies
    • +12.9% among Small Cap 200 companies
    • Based only on companies in both this year’s and last year’s studies

Pay Mix

  • Equity as a percent of total compensation ranges from 53% among Small Cap companies to 57% among Top 200 companies

Share Ownership Guidelines

  • Guidelines were disclosed at 80% of Small Cap, 90% of Mid Cap and 95% of Top 200 companies
    • Generally disclosed as a multiple of annual cash retainer ranging from 4x to 5x the annual board cash retainer

Total Board Compensation

  • Median total board compensation equaled
    • $3,030,896 among Top 200 companies
    • $1,740,669 among Mid Cap 200 companies
    • $1,205,434 among Small Cap 200 companies

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