Company pay packages rose by a median of only 3 percent, compared to 2007, according to an annual review by Towers Perrin of total director compensation by Fortune 500 companies. The increase is modest compared to the median annual pay increases near 10 percent. “Though overall compensation for directors did increase year over year, it did so at a much slower pace than seen in years past–reflective of the impact of the current challenging economy and in line with other pay actions taken by companies to rein in expenses during the recession. We expect to see even more of an impact from the economic and market downturn in the data for 2009,” said John England, Towers Perrin managing principle and leader of the firm’s executive compensation practice globally. Total remuneration for nonexecutive directors at the companies studied rose to $199,949 in 2008, up from a median value of $193,965 in 2007. For 2008, median equity values in director pay packages fell to $103,963 from $105,000 the year prior. “Future trends in this area will be of particular interest as government and oversight organizations continue to push for the separation of chairman and chief executive roles in America’s corporations,” said England. “As nonexecutive chairmen become more common, competition for their services and the corresponding premium paid for their expertise is likely to rise from the levels seen today.”
Modest Increase for Director Compensation
Towers Perrin released their annual report, showing that there was modest increase in director compensation in 2008.
September 15, 2009