CEO, Director Pay Continue to Rise

October 19, 2006 (PLANSPONSOR.com) - Median total compensation for outside (non-employee) directors of US boards, as well as CEO pay, is higher than last year according to The Conference Board's annual studies of director and CEO pay.

According to a press release from The Conference Board, in manufacturing, median total compensation for outside directors was $109,000 in 2006, up from $91,250 in 2005. For the service sector the 2006 median total was $106,250, up from $81,875 last year, and median outside director pay in the financial services sector increased from $64,500 in 2005 to $83,000 in 2006. Total compensation includes fees, retainers, committee pay, and all forms of stock compensation, the release said.

The median annual mix of fees and retainers for board service plus committee pay (basic compensation) is also up in all three industry sectors for 2006. Manufacturing increased from $59,150 to $65,000; financial services increased from $48,000 to $50,300; and services from $57,000 to $60,500.

“Demands on board members have increased markedly in recent years, and their compensation is increasing commensurately,” said Charles Peck, compensation specialist at The Conference Board, in the release. “In particular, committee service, especially for those serving on audit and compensation committees, has become much more demanding.”

The Conference Board also found that median total CEO compensation (salary, bonus and long-term pay) was highest in the construction industry at $2,604,000 in 2005 (the latest year for which data is available). It was lowest in computer services at $848,000. Total current compensation (salary plus bonus) was again highest in construction at $1,936,000 and lowest in computer services at $805,000. The highest median salary, $700,000, was in communications; lowest was computer services, which paid $441,000.

The Conference Board’s “Directors’ Compensation and Board Practices in 2006” study was based on a survey of members of the Society of Corporate Secretaries and Governance Professionals and includes information on directors’ compensation and board practices in 402 companies.

The “2006 Top Executive Compensation” study is based on data from 3,075 US companies in 14 major industries and reports the compensation paid to the five highest-paid executives.

Reports from both studies can be purchased here .

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