The Advisors' Blog

– Liz Dunshee

This recent report from Compensation Advisory Partners examines trends in director pay levels & practices. Here are six key findings:

1. Total Fees: continued to increase in low single digits.

2. Meeting Fees: paid by only 11% of companies – most companies have moved to a retainer pay structure. Some use a “hybrid approach” where directors are paid if the number of meetings far exceeds the norm.

3. Pay Mix: typically a combo of cash & equity. Full-value awards are most common.

4. Fees for Committee Members & Chairs: some companies pay fees to committee members – but most rely on board-level pay. Over 90% of companies provide additional pay to committee chairs via an additional retainer. These chair retainers increased incrementally from the prior year.

5. Independent Chair Fees: all companies provided additional pay to independent chairs, and nearly all pay extra fees to lead directors.

6. Pay Limits: 47% of the largest 100 companies now have pay limits in equity plans – and the majority of companies submitting new plans have incorporated this feature. Here’s one of our prior blogs – explaining why these limits are useful and how to draft them.

Also check out this Korn Ferry blog which also notes these trends.