Never miss a story — sign up for PLANSPONSOR newsletters to keep up on the latest retirement plan benefits news.
Stepped-Up Director Duties Reflected in Comp Programs
A survey by WorldatWork and Towers Perrin found that a third of companies (34%) made changes to their 2004 director pay while 54% of the companies responding to the survey recruited new directors. Of those, 33% found it “more difficult” to do the recruiting.
Of those that will increase directors’ compensation, 53% will most often do so with cash, while 26% will increase stock options. Of the more than six in 10 (66%) that left their 2004 director pay scales alone, 52% think they are already competitive.
Some 64% of respondents reported providing additional compensation to board members that serve as the chair of a board committee. Of these organizations, 64% provide the additional compensation through a larger annual retainer. One in five pay committee chairs additional per-meeting fees, and 15% pay both a larger annual retainer and additional per-meeting fees.
Almost half of all respondents (49%) reported that they review their director pay annually.
“Directors’ compensation packages are beginning to reflect directors’ enhanced roles and responsibilities, particularly those of directors who chair high-profile committees,” says Gary Locke, a Managing Director of Towers Perrin’s HR Services business. “The survey confirms our own consulting experience – companies are taking the steps to ensure that their directors’ pay programs properly reward the significant commitment of time and energy that directors must make to do their jobs well.”
The study consisted of responses from 220 WorldatWork members representing large North American companies who were polled in January 2004.
You Might Also Like:
PSNC 2017: Improving Your Plan Through the RFP Process
Sponsors Remain Cautious on Impact Investing and ESG
Experts ask whether plan sponsors will move towards impact investing in 2017.
ESG Factors Can Illuminate Due Diligence Processes
In addition to their own interest in boosting investment performance, investor demand is another top reason why investment managers are...