Directors More Likely to Get Cash, Benefits At Large Companies

June 27, 2001 ( Large-company directors tend to get paid more in cash than their mid-and-small company counterparts, are more likely to get employee benefits, and are more likely to address substantive corporate issues.

These were some of the conclusions of a study released Wednesday by The Segal Company. Segal surveyed 189 large public companies with $17 billion median annual sales and 180 small-to-midsize firms with $154 million in median annual sales.

Overall, the form and structures of board compensation emulated traditional compensation “norms” than that at smaller firms.

The survey also found that:

  • Small-to-midsize company directors got a median initial options award of 8,250 shares, more than twice the 3,000 awarded at large companies. Meanwhile, large-company directors got a median annual retainer of $36,000  compared to $10,000 for small-company directors.
  • Large-company directors enjoy HR benefits such as deferred compensation programs (68 percent) and life insurance (18 percent). Less than 2 percent of small companies offered similar benefits to their directors.
  • Large companies tend to refer more governance issues to their boards than small and mid-sized firms. Large companies had a median of five board committees; small-to-mid firms relied on a median of two.

The Survey