Early Proxy Filers: Total Board Compensation Increased 7%

Early Proxy Filers: Total Board Compensation Increased 7%

May 5 2015

Total cost of compensating the Board of Directors increased +7% in 2014, to $2.0 million, based on a study of 100 early proxy filers with revenues greater than $1 billion. We reviewed the aggregate amounts of cash, equity, and other compensation paid to Directors, as disclosed in proxy tables. Among the 100 companies studied, we found at median:

  • Total cash payments to Directors increased +2%, to $777,000
  • Total equity compensation rose +6%, to $1.1 million
  • Total Board fees grew +7%, to $2.0 million
  • Boards were comprised of 9 paid Directors
  • Average cost per director increased +5%, to $230,000

2015 Early Filer TBC

Total Board Cost
Total board cost in 2014 ranged from $411,949 to $3,991,845 among the companies studied. The median equaled $2.0 million, a +7% from 2013 levels. The growth was driven primarily by a +6% increase in equity awards granted.  A +2% rise in the cash compensation and a slight increase in the number of paid directors also contributed to the growth.  In 2014, the median number of paid directors was nine, up from eight in 2013.

2015 Early Filer TBC_2

Average Cost per Director
Average cost per director in 2014 ranged from $78,617 to $410,678 among the companies studied. The median equaled $229,899, a +5% from 2013 levels.

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Pay Mix
According to the study, 2014 also marked a slight shift towards equity compensation for non-employee Directors. Equity awards accounted for 55% of total board cost, up from 54% in 2013. Cash compensation decreased as a percent of total board cost to 42% from 44% in 2013. Change in pension values increased to 1% of total board cost, from 0% in 2013, and all other compensation remained equal to 2% of total board cost.

2015 Early Filer TBC_5

Financial Performance

Among the 100 companies studied:

  • Revenues ranged from $1 billion to $183 billion
    • Median equals $2.9 billion
    • Median one-year revenue growth equaled +7%
  • Net Income ranged from -$53 million to $40 billion
    • Median equals $269 million
    • Median one-year net income growth equaled +11%
  • One-year total shareholder return equaled +10%