2013 Director Compensation Study

2013 Director Compensation Study

September 30 2013

Director Comp Project Report CoverSteven Hall & Partners recently completed its eighth annual study of compensation paid to non-employee directors at the 200 largest U.S. public companies (based on revenues).  Our findings for 2012 are presented below.

  • Total compensation paid to non-employee directors rose +4.5% over 2011 levels, to a median of $261,333.
  • Pay mix for non-employee directors has remained relatively unchanged since 2007.  Directors continue to receive just over half of their total compensation in the form of equity (55% in 2012), in accordance with governance best practices.
  • Annual Cash Board Retainer increased $5,000 in 2012 to a median of $85,000 and the median Annual Equity Board Retainer increased $10,000 to $140,000
  • Equity vesting periods remain largely unchanged over the last five years, with the majority of awards vesting either immediately or within one year of the grant date.  There has been a slight increase in the use of multi-year vesting periods at the expense of one-year vesting.  The percentage of grants vesting immediately, typically common stock or shares deferred until retirement, has remained unchanged over the last five years.
  • Meeting fees continue to decline in prevalence for both board and committee service, to 27% and 29% respectively, as companies seek greater control over total compensation levels and replace these fees with increases in retainers.  Among those still paying meeting fees, the median per meeting fee was $2,000 for both board and committee service.
  • Committee chairs for each of the audit, compensation and nominating/governance committees receive additional fees (retainer plus meeting fees) at 94% of the companies studied.  Median committee chair fees equaled $25,000, $20,000 and $15,000 for the audit, compensation and nominating/governance committees, respectively.
  • Committee Members for each of the audit, compensation and nominating/governance committees receive additional fees (retainer plus meeting fees) at 43% of the companies studied.  Median committee member fees equaled $15,000, $10,000 and $8,000 for the audit, compensation and nominating/governance committees, respectively.
  • Share ownership guidelines continue to rise in prevalence, with 91% of companies disclosing the existence of such guidelines in 2012 compared with just 63% of companies in 2007.  Among those companies with guidelines in 2012, 59% are valued at a multiple of five times or greater the cash retainer.

 

PDF: SH&P 2013 Director Compensation Report