The Advisors' Blog

This Equilar blog says that – despite some companies freezing director pay during the pandemic – retainers have continued to steadily increase by about 1.9% the past two years. What’s striking is how many companies set their retainer to be right around the median (although that approach makes a lot of sense in light of litigation & voting policies). Here are a few data points:

– In 2020, the median director retainer at Equilar 500 companies was $270,000, which increased 1.9% in each of the past two years, up from $260,000 in 2018 and $265,000 in 2019.

– Communication services and healthcare had the highest median retainer at $300,000, with technology not far behind at $298,000. The lowest median retainer of $245,000 was awarded to directors in the consumer cyclical industry, also consistent with trends for executive pay.

– Meanwhile, basic materials companies awarded the largest increase in the median retainer to board members from 2018 to 2020, an increase of 12.5% from $240,000 to $270,000. The energy sector was the only industry to see a drop in retainers in any year, falling from $280,000 in 2019 to $275,000 in 2020. The healthcare and real estate sectors remained flat in 2020, while all other industries saw gains.

– In 2020, 26 companies awarded their directors less than $200,000 for a retainer, and only nine had a median retainer above $400,000. Throughout the study period, just seven different companies have offered their directors more than $500,000, and only three companies offered directors’ compensation above this threshold in 2020.

– Liz Dunshee