Thoughts for Consideration When Reviewing Your Director Compensation Program
As it comes time for your company to conduct its annual review of director compensation, we recommend you consider the following general questions:
- Is your director compensation program competitive?
- Does it allow you to attract and retain high quality director candidates?
- Are modifications to your director compensation program sustainable, appropriate and reflective of projected market increases and company growth?
- How does your director pay mix compare to the pay mix at companies of similar size and/or industry?
- Is your program’s structure aligned with the current best practice of delivering at least half of total value to directors in the form of equity?
- If your program’s equity awards are denominated in shares, does your company account for the total potential volatility in grant value?
- To what degree does your company consider Total Board Cost when making modifications to your director compensation program?
As always, we welcome the opportunity to further discuss this study or any specific comments or questions you may have regarding your current or contemplated program.