October 20, 2015
Capping Director Equity Grants
– Broc Romanek, CompensationStandards.com
Here’s the latest from this Towers Watson memo about Fortune 500 non-employee director compensation:
– Companies continue to impose gaps on potential stock grants to directors. Specifically, 27% of companies that adopted or amended stock plans that include directors as participants in the 2015 proxy season included an annual award limit specific to non-employee directors – compared to 22% in 2013.
– Total direct compensation for outside directors climbed 4% at the median over the prior year, with the average mix of pay remaining constant year over year at 56% in equity and 44% in cash.
– Median total cash pay remained flat at $100,000 for the second year in a row – a combination of an increased annual board cash retainer and a continuing decline in the use of cash per-meeting fees for board and committee service.
– Full-value stock grants remain the primary method for delivering equity compensation to directors. Only 9% of companies issue stock option grants as part of their director pay program.
– Retainers for governance committee members increased. The gap in pay between the three key committees continues to narrow.