Board of Directors' Compensation Not 'Unreasonable,' Study Finds

March 21, 2008
Average is slightly more than $1 million.

Ever wonder about the typical earnings of the average corporate board of directors? With the release of a new study, now you can find out. Board compensation averaged just over $1 million, according to a study of more than 3,000 U.S. companies conducted by independent market research firm The Corporate Library. The payments included the total of director cash payments, equity awards, and changes in value of pensions and non-qualified deferred compensation amounts. The results are based on proxy statements issued prior to August 2007.

There were extremes, of course. Nine companies paid more than $2 million in cash director fees, including Honeywell International and Northrop Grumman, according to The Corporate Library. And one company, Valero Energy, spend more than $30 million on its board, most of it going to a single director.

On the flip side, about a third (32%) of the companies studied paid less than $500,000 in compensation to its full board. "The findings show that, with the exception of a few outliers, most companies are not spending an unreasonable amount on their boards," says report author Annalisa Barrett, senior research associate.

The study also showed that six companies offered their full board a cash bonus based on company performance, and the practice of establishing stock ownership guidelines for directors is growing.

Sponsored Recommendations

Voice your opinion!

To join the conversation, and become an exclusive member of IndustryWeek, create an account today!