Boards Hit the $1 Million Mark

Public companies in the United States spent an average of just more than $1 million on board compensation last year, the payments of which include cash payments, equity awards, and changes in the value of pensions and non-qualified deferred compensation amounts, a new study by The Corporate Library finds.

Nearly one-third (32 percent) of the more than 3,000 companies in the study said they paid less than $500,000 in board compensation last year, while on the flip side nine companies paid more than $2 million in cash director fees in 2006, including AIG, Honeywell, and Northrop Grumman. Valero Energy, meanwhile, spent more than $30 million on its board, with most of the pay going to board member William E. Greehey.

“The findings show that, with exception of a few outliers, most companies are not spending an unreasonable amount on their boards,” said Annalisa Barret, the report’s author, in a statement.

The study also reveals that while the practice is unusual, six companies offered their full board a cash bonus based on performance of the company. Meanwhile, establishing stock ownership guidelines for directors is increasing: For the S&P 1500, the prevalence of ownership guidelines jumped from 29 percent in 2005 to 46 percent in 2007.