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Home > Articles & Research > Board Communications > Boards Hit the $1 Million Mark

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 the total of director cash payments, equity awards, and changes in the value of pensions and non-qualified deferred compensation amounts, new research finds.

by Joseph McCafferty | March 19, 2008

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

Nearly one-third (32 percent) of the more than 3,000companies in the study said they paid less than $500,000 in board compensationlast year, while on the flip side nine companies paid more than $2 million incash director fees in 2006, including AIG, Honeywell, and Northrop Grumman.Valero Energy, meanwhile, spent more than $30 million on its board, with mostof 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 thecompany. Meanwhile, establishing stock ownership guidelines for directors isincreasing: For the S&P 1500, the prevalence of ownership guidelines jumpedfrom 29 percent in 2005 to 46 percent in 2007.

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