Top 200 Director Compensation Study

Top 200 Director Compensation Study

June 22 2015

PDFSteven Hall & Partners recently completed the tenth annual study of compensation paid to non-employee directors at the 200 public companies with the largest revenues for the most recent fiscal year (fiscal 2014), which were also incorporated in the United States and publicly traded on United States-based securities exchanges. Based on this study, we find that in 2014:

Total Compensation

  • Total compensation paid to non-employee directors rose +3.1% over 2013 levels, to a median of $276,667
  • Non-Chair position had the largest one-year increase (+4.0%)
  • Compensation Chair position had largest five-year increase (+19.6%)


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  • Total compensation continues to be correlated to revenue size of the company
    • In general, smaller companies pay less than their larger counterparts
  • Over the past five years, compensation increases have been greatest among the smaller companies in the study

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  • Information technology companies pay the highest compensation followed by energy companies
  • Over the past five years, greatest increases experienced by utility (+26%), information technology (+25%) and consumer discretionary (+23%) companies

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Pay Mix

  • Directors continue to receive over half of their total compensation in the form of equity (57% in 2014), in accordance with governance best practices
    • Equity as a percent of total compensation has increased about 1% per year over the last five years

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Annual Cash Retainer

  • Median cash retainer for board service equals $100,000 in 2014
    • +11% increase over 2013
    • +33% increase over 2009
    • Increases in annual cash retainers have outpaced those observed in total compensation due largely to the elimination of meeting fee payments and the offsetting increases to cash retainers

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Annual Equity Retainer

  • Median equity retainer value equals $150,000 in 2014
    • +7% increase over 2013
    • +25% increase over 2009
  • 97% prevalence among Top 200

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  • Among the Top 200 companies that made equity awards in 2014
    • 92% granted only full value awards
    • 6% granted both options and full value shares
    • 2% granted only options

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  • Equity vesting periods have been relatively unchanged since 2009, with the majority of awards vesting either immediately or within one year of the grant date

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Meeting Fees

  • Meeting fees continue to decline in prevalence among the Top 200
    • 21% pay meeting fees for board meetings
    • 23% pay meeting fees for committee meetings
  • Median per meeting fee has remained unchanged at $2,000 for the last ten years among company paying meeting fees

Committee Fees (Retainers + Meeting Fees)

  • Median committee chair fees for the Audit, Compensation and Nominating/Governance committees equal $25,000, $20,000 and $15,000, respectively
  • Median committee member fees for the Audit, Compensation and Nominating/Governance committees equal $14,900, $10,000 and $9,000, respectively

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Share Ownership Guidelines

  • Share ownership guidelines continue to rise in prevalence among the Top 200 companies
    • 94% disclosed the existence of such guidelines in 2014
  • Majority of ownership guidelines stipulated as a multiple of the annual board cash retainer (68% of companies)
    • 5x cash retainer is most common requirement
  • Value of guidelines ranges from $100,000 to $2,077,000 with a median of $500,000

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About the Study
The study analyzed non-employee director compensation data as disclosed in the most recent proxy statements filed for the 200 largest U.S. public companies, ranked by revenues. Analysis of total remuneration is based on pay for an average director, defined as a director who chairs one committee and serves as a member of another; in each case, committee fees reflect the average for the Audit, Compensation and Nominating/Governance committees. For additional details regarding the study please contact Steven Hall Jr. at 212-488-5400 or sehall@shallpartners.com.

About Steven Hall & Partners
Steven Hall & Partners is an independent compensation consulting firm, specializing exclusively in the areas of executive compensation, board compensation, non-profit compensation and related governance issues. By focusing solely on this critical and complex segment of the human resources arena, we are able to provide our clients with the highest quality expertise and best counsel available on a practical basis. For more information, please visit www.shallpartners.com and follow us on Twitter @SHallPartners.

Contacting Steven Hall & Partners
This publication is provided by Steven Hall & Partners as a service to clients and colleagues. The information contained in this publication should not be construed as legal, tax or accounting advice. We can assist with the development and/or modification of director compensation programs and related corporate governance policies. If you have not received this publication directly from us, you may obtain a copy of any past or future related publications by emailing us at shp@shallpartners.com.
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