The Advisors' Blog

A recent HLS post by The Conference Board reviews 2025 board director compensation practices at U.S. public companies. These top takeaways use several similar terms to describe how the various approaches to director compensation (and even quantums), at least in the Russell 3000 and S&P 500, have continued to “converge.”

– Director pay has largely leveled off, rising just 2% in the Russell 3000 and remaining flat in the S&P 500, reflecting a mature and disciplined compensation model with medians clustered near $250,000.

– Shareholder-approved limits have become a core governance safeguard, now adopted by roughly three-quarters of companies in both indexes, with a typical $750,000 cap that signals tighter oversight and growing investor scrutiny.

– Director core pay elements have largely settled into a stable pattern, with cash retainers flat at $75,000 (Russell 3000) and $105,000 (S&P 500), stock awards holding at $150,000 and $190,000, and only minor variation in option values.

– Companies have converged on a streamlined retainer-only structure, used by about 90% of firms as meeting fees continue to decline in prevalence and value, reinforcing a shift toward simpler and more predictable pay designs even as director responsibilities expand.

– Director perquisites remain modest and highly concentrated, with travel reimbursement still the only widespread benefit (above 50% in both indexes) and most other perks—such as education support or charitable-match programs—concentrated among larger S&P 500 companies.

There may be many good reasons to take a different approach to director compensation, but keep in mind that you won’t get the benefit of “strength in numbers” and may want to ensure a mini CD&A on director pay clearly explains why your board strays from the pack. (Read the full blog for info on some outlying industries.) It’ll be interesting to see whether this convergence trend continues as proxy advisor and investor perspectives start to do the opposite.

– Meredith Ervine