Benefits July 23, 2009

Director Pay Retreats by 2.4% Says New Study

July 23, 2009 (PLANSPONSOR.com) - A new survey of director pay has found that total remuneration has halted its steady climb, actually falling back by 2.4% over the last year to $244,899.
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A news release said average 2008 director pay grew 38.6% over 2003 and that t he average director received 2.3% of the average top 200 CEO compensation in 2008 as compared to 1.9% in 2003, an increase of approximately 18%. The data is from a study by Steven Hall & Partners, executive compensation consultants.

“With board meeting fees going out of vogue, companies have consciously shifted value into directors’ annual retainers, both cash and stock,” observed Steve Hall, managing director of Steven Hall & Partners, in the news release.

In 2003, full-value stock awards represented only about 29% of the total received by directors vs. 41.5% in 2008. Cash retainers have also risen and now comprise almost 29% of the total package. The five-year study also showed that board meeting fees and stock option awards are far less prevalent director pay elements in 2008 as compared to 2003, the news release said.

Additionally, the equity component of the annual retainer is now predominantly comprised of full value shares, with the use of options dropping in half from 63% prevalence in 2003 to approximately 31% in 2008 among the top 200.

The study analyzed the most current proxy data available on the 200 largest U.S. public companies, comparing director compensation in 2008/2009 to levels paid in 2003/2004.

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