In a press release on its study, Pearl Meyer said director pay exceeds $100,000 at all but six of the major companies it studied, and exceeds $400,000 at nine of the companies. The firm’s findings were based on 2006 public filings of the 200 largest US industrial and services companies.
The study found median pay for service on compensation committees was up nearly 18% to $6,000 in 2006, while median pay for audit committee service was up 9% to $10,900. Joseph Rich, president of Pearl Meyer & Partners, said in the release that new executive compensation disclosure rules from the Securities and Exchange Commission were likely to produce a period of greater pay growth for compensation committee service much like Sarbanes-Oxley did for pay growth of audit committee service.
There was a 20% increase to $60,000 in the median value of board retainers in 2006, while board meeting fees were unchanged at $7,000, the study found. Twelve of the companies studied paid retainers of $100,000 or more.
Changes in equity pay practices continue, as the filings showed a pronounced shift from use of stock options to full value stock grants. The average value of option grants to directors was down nearly 9% to about $39,000, while full value stock grants increased in value by more than 21% on average, to more than $82,000.
A full copy of the Pearl Meyer & Partners 2006 Director Compensation Study will be available later this fall at www.pearlmeyer.com .
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