2017 Director Compensation Study

2017 Director Compensation Study

November 8 2017

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 2016
  • 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 greatest year over year increase in median total compensation levels (+4.0%) and Mid Cap companies had the smallest increase (+1.1%).  Additionally we found that in 2016:

Total Compensation

  • Median total compensation paid to non-employee directors equaled
    • $291,667 among Top 200 companies
    • $222,917 among Mid Cap 200 companies
    • $173,283 among Small Cap 200 companies
  • Total compensation increased (2016 vs. 2015); based only on companies in both this year’s and last year’s studies
    • +2.9% among Top 200 companies
    • +1.1% among Mid Cap 200 companies
    • +4.0% among Small Cap 200 companies

Pay Mix

  • Equity as a percent of total compensation ranges from 54% among Small Cap companies to 57% among Top 200 companies

Share Ownership Guidelines

  • Guidelines were disclosed at 82% of Small Cap, 93% of Mid Cap and 97% of Top 200 companies
    • Generally disclosed as a multiple of annual cash retainer with values ranging from 4x to 5x the retainer

Total Board Compensation

  • Median total board compensation equaled
    • $3.07 million among Top 200 companies
    • $1.88 million among Mid Cap 200 companies
    • $1.25 million among Small Cap 200 companies