Surveys relating to Director Compensation
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2021.05  "Director Compensation Practices in the Russell 3000 and S&P 500: 2021 Edition" (Conference Board). [PDF of full report]

  • "While instances of excessive director pay sporadically come to the fore, the spotlight on board compensation from shareholders and proxy advisory firms affects all companies. As a result, pay ceilings in equity plan documents are more common, and advisory votes on board pay (or on those directors who decide board pay) could become a more frequent proxy matter.
  • POERIO COMMENT: It makes perfect sense to seek shareholder approval for a limit on director compensation (discussed further here), it is hard to imagine that the benefit exceeds the risk when it comes to voluntarily seeking a non-binding "say on pay" vote for director compensation. 

2020.08  "Director Compensation Practices in the Russell 3000 and S&P 500" (Conference Board). [PDF of full report]

2019.08.14  Director Compensation Study - and Warning. Tucked within superb survey data about board service and pay practices, this excerpt from a Pearl Meyer's report makes the following observation that should be a clarion call for U.S. public and private boards: While most survey respondents are not currently concerned by the increased external scrutiny on NED [non-employee director] pay, this will likely change over time, especially as Institutional Shareholder Services (ISS) begins to target high pay “outliers.”  In a nutshell, corporate boards have a fast-disappearing window period within which to position to avoid shareholder derivative litigation aimed at their non-employee director pay processes and pay structures. See Director Compensation (Home) and  Director Compensation Litigation for further discussion.

2019.05.06  Director Compensation - ISS Data and Commentary.  This Harvard Governance Blog shares excellent analytics published by Institutional Shareholder Services. Corporate boards would be smart to pay attention because their own compensation continues to present the #1 risk of shareholder derivative litigation alleging excessive director compensation.  

2019.01.22  ClearBridge 100 Report. This 24-page report provides excellent data about different elements of director compensation, as well as plan terms -- and insights such as the following quoted from the report: 

  • Director Compensation Limits ... "Setting compensation limits for directors as part of stock plans continues to become more prevalent. 56% of companies have director compensation limits, 91% of which adopted the limits since 2014" -- SeeDirector Comp Plan Limits.


2016.11   Frederic W. Cook's 2016 Director Compensation Report.  Here are a few excerpts from this report, which is filled with rich data and sound insights:

  • FW Cook’s 2016 Director Compensation Report studies non-employee director compensation at 300 companies of various sizes and industries to analyze market practices in pay levels and program structure.
  • In terms of pay levels, total compensation increased by 1.3% at the median of the total sample versus last year’s study, which reflects an apparent stabilization of director pay among large- and mid-cap companies in particular.
  • Companies in all size segments continue to provide more than half of total pay in equity, on average, with equity weighting generally increasing with company size.
  • Roughly three-quarters of the sample use retainers only (no board meeting fee).
  • Just over 40%, 30%, and 20% of large-, mid-, and small-cap companies, respectively, have annual limits on director compensation in the applicable equity plan.
  • Eighty-five percent of companies with limits apply them only to equity compensation per director, despite the emerging practice of applying them to total compensation per director.  See Plan Limits for further survey data.

2016.11  Equilar Survey: Fees for Special Board Committees. PDF is here

2016.10.17  Equilar Survey: Shareholder-approved Plan Limits Becoming More Common.  In this blog, Eqular reports as follows:

  • According to an Equilar study, 80% of companies in the S&P 100 proposed or amended an incentive plan involving directors in proxies filed between January 1, 2011 and September 30, 2016. Of those companies, 28.8% explicitly mentioned a dollar value cap on director awards, and more than half of these dollar value caps were disclosed in a proxy filed in 2016. The graph below compares dollar value pay caps that specifically mention directors to the median amount a director received in 2015 for that company.

2016.03.28  "Annual limits for director stock awards gaining steam" is the title for this WIllisTowersWatson bulletin, which includes findings such as the following: 3% of Fortune 500 companies have received shareholder approval for a total pay limit, with those limits ranging from $200,000 to $2M, and with 28% of Fortune 500 stock plans including a dollar or number limit on awards to directors.

2015.Aug.27  Shareholder Approval for Director Award Limits.  Here is an excerpt from this Towers Watson survey of director compensation:

  • "Companies continue to impose caps on directors’ potential stock grants in response to recent court rulings. More than a quarter (27%) of companies that adopted or amended stock plans (that include directors as participants) in the 2015 proxy season included an annual award limit specific to nonemployee directors."

2015.Jan.13  Trends in Director Compensation 2015 . . . Pay Governance Report
Here is the summary of Pay Governance's report, copied from this Harvard Law Governance Blog:

     Summary and Key Findings

  • In recent years, total pay has increased by, on average, less than 5% per year.
  • Most companies make pay changes less frequently (e.g., every two or three years).
  • Most large cap companies have eliminated regular meeting fees, in favor of higher annual cash/equity retainers.
  • Equity awards, which are most often RSUs or some other type of full-value award, typically represents 55% to 60% of total pay.
  • Near universal practice of having stock ownership and/or stock retention requirements, such as deferred stock units that are held until after board departure.
  • Some pay practices vary widely by industry and company size; for example smaller cap companies continue to provide meeting fees and may also grant stock options.
  • In the future, we expect annual director pay to increase, on average, by 3% to 5% and the weighting on equity awards to increase.

2015.Jan.13  Director Compensation 2015 . . . Mercer and FW Cook Surveys
"Longstanding trends continued in 2013" according to a Mercer survey reporting that director compensation increased by 5% in 2013, driven by increased retainers and equity awards (and balanced by reduced committee meeting fees).   Released in Oct. 2014, Frederic W. Cook's comprehensive 2014 Director Compensation Survey reports similar results, and observes that --

  • "[f]rom a design perspective, the trend is towards streamlining programs in part through (1) eliminating meeting fees and delivering the respective value through higher cash retainers implying that director attendance is a prerequisite of board service; (2) denominating equity grants as a dollar value rather than as a number of shares to mitigate year-over-year valuation changes, and (3) continuing the shift away from stock options to full-value shares to strengthen the alignment of directors’ and shareholders’ interests."

2013.Sept.30  2012 Survey Results. Here are conclusions quoted from an announcement by Steven Hall Partners about its survey of director compensation for 2012:

  • Total compensation paid to non-employee directors rose +4.5% over 2011 levels, to a median of $261,333.
  • Pay mix for non-employee directors has remained relatively unchanged since 2007.  Directors continue to receive just over half of their total compensation in the form of equity (55% in 2012), in accordance with governance best practices.
  • Annual Cash Board Retainer increased $5,000 in 2012 to a median of $85,000 and the median Annual Equity Board Retainer increased $10,000 to $140,000
  • Equity vesting periods remain largely unchanged over the last five years, with the majority of awards vesting either immediately or within one year of the grant date. 

2013.Sept.14 Top 200 Companies - survey from Steven Hall Partners.  Here are two highlights: (1) the mix of cash and equity remained almost the same -- 55% to 45% -- from 2007 to 2012; and (2) for the same interval, the shift toward full value awards increased from 68% to 88% of all awards.

2013.Aug.15  Top 250 Companies - survey from Meridian Compensation Partners shows 4% increase in compensation over the last year, with a 2% increase in cash and an 8% increase in equity awards.

2013.July.18  Survey Results for 2012 - from Steven Hall Partners (generally showing 4-5% increases from 2011, and 14-15% increases from 2007).

2013.Feb.28  Director Compensation - From Surveys to Shareholder Approval
The Conference Board's posting on the Harvard Governance blog prefaces its list of major findings with the following: "The Conference Board, NASDAQ OMX and NYSE Euronext jointly released the 2013 edition of Director Compensation and Board Practices, a benchmarking study with more than 150 corporate governance data points searchable by company size (measurable by revenue and asset value) and 20 industrial sectors." The study identifies many points of divergence between the practices of large and small companies. While the Conference Board report does not focus on how directors compensate themselves, corporate directors should . . . continued at Director Compensation. 

2012.Nov.15  Director Stock Compensation: Three New Studies Reveal Trends -- This blog provides highlights of survey data published by Towers Watson, Frederic Cook, and Mercer, with the general consensus indication that boards are continuing to shift more of their compensation -

  • (i) away from cash to restricted stock and other stock awards, with roughly a 50/50 split (more heavily weighted to equity compensation at tech companies, and
  • (ii) away from stock options and to restricted stock and deferred shares, with Mercer reporting that 77% of companies award the latter. For example, the Cook survey found that "stock options are used by less than 15% of the financial services, industrial, and retail companies, by contrast with 34% of the tech companies."