Overworked and underpaid? While that is not popular media’s view of board directors generally, these are the findings of the 11th annual NACD 2009-2010 Director Compensation Report. The survey found director pay either flat or down slightly at all but the largest companies. Chalk up part of this to directors’ sensitivity and part to an effort around the boardroom to align pay with performance. There’s good news in the offing, however. The research, conducted by Pearl Meyer & Partners Managing Director Jannice Koors and Associate Matthew Vnuk based on a review of 1,400 randomly selected company proxies, predicts director pay levels will show above-average increases once company financials, and corresponding equity values, begin to rebound.
For those of you who choose to answer to the higher calling of boardroom service, we have some forward-looking guidance. This issue’s cover story is the inaugural Boardroom Guide for New Directors. Tapping into the experts at the NYSE, PricewaterhouseCoopers, Farient Advisors, Spencer Stuart and an assembly of seasoned directors, this special section was prepared to help orient both the director new to a public company board or new to a role as chairman or lead director. Contributions from our experts combined with insight from NACD Chief Knowledge Officer Alexandra LaJoux round out our coverage.
NACD’s LaJoux also provided the inspiration for two new columns in this issue. An improved “Washington Update” analyzes key developments on Capitol Hill and in the courts. “Point/Counterpoint” offers opposing views on topical issues. First up: Lynn A. Stout versus Charles M. Elson on the question of who owns a corporation. Stout argues against shareholder primacy, reasoning that directors have a wide legal berth to sacrifice value in order to protect employees, the community, creditors and others. Elson counters that failure to put shareholders first will drive away investors. Each makes a compelling argument. What do you think?
Judy Warner is chief content officer of Directorship and managing editor of NACD Directorship and Directorship.com.
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