November 23, 2021
Director Compensation: Pay for ESG Committee Chairs
This 29-page memo from FW Cook analyzes 2021 director pay at 300 companies of various sizes & industries. For the most part, practices around board retainers, equity grants, annual compensation limits and stock ownership guidelines have remained pretty steady from year to year. One area that is changing, though, is that more companies are establishing an ESG-related committee. Here’s what FW Cook found about that:
Thirty-six of the 300-company sample, (12%) included an Environmental, Social, and Governance (ESG)-related committee. Of those companies, 22 were in the Energy sector (61%), five were in the Financial Services sector (14%), five were in the Retail sector, and four were in the Industrial sector (11%). Additionally, 18 were large-cap (50%), 13 were mid-cap (36%), and only five (14%) were small-cap.
ESG committee chair retainers were $15,000 at the median, which we observe to be aligned with the median of Nominating/Governance committee chair retainers for the 2021 study broadly. About one-third of companies with an ESG committee provide a member retainer or meeting fees.
– Liz Dunshee