Total Board Compensation Increased +6% among Early Proxy Filers

Total compensation paid to all non-employee members of the Board of Directors grew +6% in 2017, to $2.3 million, while target CEO compensation increased +8% over the same time period. The findings are based on our recent study of 100 companies with revenues greater than $1 billion filing proxies since January 1, 2018.

Median total board compensation ranged from $2.0 million among Industrial companies to $2.8 million for Energy companies. The median for all companies reviewed was $2.3 million. Total board compensation rose at 65 companies and declined at 35 companies. Among the companies with year over year decreases, reductions in the number of paid directors and value of equity compensation were the two main contributing factors.

Among the 100 early filers, one-year changes in total board compensation ranged from -$1.2 million (-37%) to +$3.5 million (+503%) and the median change equaled +$119,813 (+6%). The -$1.2 million decrease was due to a reduction in both the number of directors and size of the annual equity award, while the +$3.5 million increase was due to amounts received through a dividend equivalent payment plan. Companies in the Utilities, Materials and Industrials industries had the greatest one-year percentage growth.
Pay Mix
The majority of director compensation paid in 2017 was delivered via equity awards (56%), followed by cash payments (42%) and all other compensation (2%). All other compensation includes items such as charitable contributions, dividend equivalent payments and other perquisites granted to directors.

Number of Paid Directors
Early proxy filers had between five and 16 paid directors on the board in 2017. The median equaled nine; no change from 2016. In 2017, 34 of the 100 early filers expanded the number of paid directors on the board, by one or two new directors, while 29 companies reduced the number of paid directors, ranging from one to three fewer directors. There was no change in paid directors at 37 companies.

Total Compensation per Director
Total compensation per director in 2017 ranged from $54,167 to $550,078 among the companies studied. The median equaled $237,901, representing a +4% increase from 2016 levels. Total compensation per director was highest among Information Technology companies ($318,490) and lowest at Financial companies ($221,110).

Early Filer Companies
The 100 companies included in the study represent nine different industries, with Industrials (26) and Information Technology (16) companies being the most represented. Fiscal 2017 revenues for the group ranged from $1 billion to $153.1 billion with a median value of $3.8 billion. Fiscal year ends were from September 30 to December 31, with December 31 being the most common (52).

About the Study
The study analyzed compensation data for the most recent two years as disclosed in 100 proxy statements filed in 2018 for companies with revenues greater than $1 billion. For additional details regarding the study please contact Steven Hall Jr. at 212-488-5400 or [email protected].

About Steven Hall & Partners
Steven Hall & Partners is an independent executive compensation consulting firm serving as outside counsel to boards, compensation committees and management. The firm focuses solely on executive compensation, director remuneration and related corporate governance matters.