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Fortune 500 Director Pay Up 7.2% to $174K in Equilar® Study
For Release: June 9, 2008
Redwood Shores, Calif. - Equilar, the market leader for executive and director compensation benchmarking solutions, today published an analysis of pay trends for non-employee directors at Fortune 500 companies. The analysis, including 425 companies with consecutive years of available data, finds that median director compensation reached $173,640 in 2007 — an increase of 7.2 percent over 2006.
Director compensation includes annual retainers and meeting fees paid for regular board duties. Committee member fees and special fees for board leadership positions are excluded. By excluding these fees, which are not evenly distributed across board members, this study examines base-line director pay trends.
Key findings from the study are presented below:
- Total Compensation: From 2006 to 2007, median compensation for non-employee directors at Fortune 500 companies increased by 7.2 percent, rising from $162,000 in 2006 to $173,640 in 2007. The prevalence of companies that did not award compensation to directors remained very low, but grew slightly from 0.9 percent in 2006 to 1.2 percent in 2007.
- Cash Retainers: From 2006 to 2007, the median value of annual board member retainers paid in cash increased by 20.0 percent, rising from $50,000 to $60,000. The prevalence of companies providing cash retainers also increased from 94.6 percent in 2006 to 95.1 percent in 2007.
- Equity Retainers: From 2006 to 2007, the median value of board member retainers paid in equity increased by 3.4 percent, rising from $100,000 to $103,389. Additionally, the prevalence of companies providing equity retainers increased from 91.5 percent in 2006 to 92.7 percent in 2007. Equity retainers include fees paid in options, stock, and/or stock units.
- Board Meeting Fees: Among companies awarding meeting fees, the median value of aggregate board meeting fees paid to directors increased by 18.5 percent, climbing from $13,500 in 2006 to $16,000 in 2007. However, the prevalence of companies providing meeting fees declined from 57.4 percent in 2006 to 52.0 percent in 2007. Aggregate meeting fees include payments made in cash and/or equity.
- Composition of Pay: In 2007, 29.4 percent of Fortune 500 companies paid annual retainers for non-employee directors as a combination of cash and stock units. This fee structure was most prevalent in both 2007 and 2006.
Equilar clients can read the full director pay trends analysis online. If you are not an Equilar client, please e-mail us or call (877) 441-6090 to learn more.
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