The Advisors' Blog

Willis Towers Watson recently published its annual analysis of director pay levels and practices among S&P 500 companies, based on proxy statements filed in 2021. The director compensation practices seem relatively consistent to last year’s, and you can see industry sector comparisons on pg. 14 of the memo.  Below is an excerpt of the specific key findings for compensation committees’ benchmarking purposes:

– The median value of most individual cash components remained the same, while the median value of total annual cash compensation increased from $107,500 to $110,000 (2%). The median value of annual stock compensation increased 3%. Overall, total direct compensation went up just 1%, a similar increase to the prior year.

– Pay mix for non-employee board members remained divided 60% in equity and 40% in cash.

– The prevalence of board meeting fees declined by one percentage point, while the prevalence of committee per-meeting fees declined by two percentage points. The median value of committee per-meeting fees increased from $1,500 to $2,000 (33%), putting it in line with the median board meeting fees value.

– Equity compensation continues to be the most prominent part of the director pay package. The number of companies granting common stock decreased one percentage point (to 14%), while the number of companies granting restricted stock increased one percentage point (to 67%). The median value of stock options increased 3% for stock options (from $86,424 to $89,167), deferred and phantom stock (from $160,000 to $165,047), and restricted stock (from $165,000 to $170,043).

– One-time initial stock grant prevalence increased one percentage point, as value at the median increased 9% from $156,000 to $170,000.

– Emily Sacks-Wilner