Fortune 500 Directors Earning More

An analysis performed by Equilar of 425 Fortune 500 companies showed that director compensation increased by more than seven percent in 2007. Director compensation included annual retainers and meeting fees paid for regular board duties.

Committee fees and special fees were excluded. The study reviewed the base line of director pay trends. Of the findings, total compensation, cash retainers, equity retainers, board meeting fees, and composition of pay were key.

• Total compensation: From 2006 to 2007, compensation for non-employee directors at Fortune 500 companies increased from $162,000 to $173,640. Companies that did not award directors were not prevalent.

• Cash retainers: During the same period, the median value of annual board member retainers paid in cash increased by 20 percent. Pay increased from $50,000 to $60,000. Companies providing the cash retainers increased slightly from 94.6 percent to 95.1 percent in 2007.

• Equity retainers: The median value of board member retainers paid in equity increased by more than three percent, from $100,000 to $103,389. Companies providing such retainers increased slightly from 91.5 percent to 92.7 percent.

• Board meeting fees: Board meeting fees increased from $13,500 in 2006 to $16,000 in 2007, a total of 18.5 percent. However in this case, the prevalence of companies providing the fees declined from more than 57 percent in 2006 to 52 percent in 2007.

• Composition of pay: Twenty-nine percent of Fortune 500 companies paid annual retainers for non-employee directors. The combination of cash and stock units was most prevalent in both 2007 and 2006.