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Annual cash retainer for board service reaches $100,000 for first time
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Total pay for outside directors at the largest U.S. corporations increased by a modest 3 percent in 2015, driven by increases in both cash and stock compensation, according to
a new analysis by consultancy Willis Towers Watson.
Total compensation, which includes cash pay and annual or recurring stock awards, had increased 4 percent the previous year.
The study found the median annual cash retainer for board service reached $100,000 for the first time in 2015. The median value of stock compensation rose to almost $150,000. The average mix of pay remained relatively constant at 57 percent in equity and 43 percent in cash.
Rewarding Overall Contributions
The use of committee attendance fees fell from 22 percent of companies to 18 percent, while the use of flat, retainer-based pay for committee service increased from 25 percent to 27 percent. Additionally, the number of companies providing an annual board retainer as the sole form of cash compensation increased from 40 percent in 2014 to 42 percent last year.
"Companies continue to adjust their director pay programs with an eye toward rewarding directors for their overall contributions rather than for how many meetings they attend," said Robert Mustich, leader of Willis Towers Watson's executive compensation consulting practice in the eastern United States. "The fact that a third of the companies we analyzed changed one or more core elements of their pay program in the past year reflects an ongoing trend toward companies reviewing and adjusting their director pay packages on a regular basis to remain competitive."
Among other findings:
Willis Towers Watson analyzed the compensation for outside directors at 250 publicly owned
Fortune 500 companies that filed their fiscal year 2015 proxy statements by June 30, 2016.
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