Not yet a Member?
Extroverts and introverts each bring their own contributions to the workforce.
Is your employee handbook ready for the New Year? With SHRM’s Employee Handbook Builder get peace of mind that your handbook is up-to-date.
Get the HR education you need without travel expenses or time out of the office.
Join us in Chicago for the latest trends and technology in talent management, and what to expect in the future.
Cash retainer portion of total pay package jumped for first time in two years
Fueled by an increase in cash compensation, total pay for outside directors at the largest U.S. corporations rose modestly in 2012, according to an annual analysis released in September 2013 by HR consultancy Towers Watson. Companies increased the value of annual retainers and continued to shift away from variable forms of pay, which elevated the cash element of directors’ total compensation package.
The annual analysis of director compensation at Fortune 500 companies revealed that total direct compensation (which includes cash pay and annual or recurring stock awards) increased by 3 percent at the median last year, from $220,000 in 2011 to $227,000. That figure is slightly lower than the 5 percent increase in director total compensation in 2011.
Meanwhile, the median value of cash compensation jumped 8 percent last year, to $100,000, driven primarily by the first increase in the median cash retainer in two years. The annual cash board retainer rose by 7 percent at the median in 2012, reaching an all-time high of $80,000.
Compensation from annual and recurring stock awards remained virtually unchanged last year at $125,000, the analysis found.
“Cash retainers are playing a larger role in the compensation mix for outside directors, as the majority of companies have now eliminated meeting fees, reflecting the evolution of director roles to 24/7 commitments,” Doug Friske, global head of executive compensation consulting at Towers Watson, said in a media statement. “While director-pay increases in the early years of this decade were primarily driven by rising equity values, last year’s increase was fueled by growth in cash compensation.”
The analysis also revealed that:
“The demand for experienced, talented directors to serve on boards remains strong and will likely grow as companies address the retirement of long-standing members and pursue greater member diversity,” Friske predicted. “As a result, we expect companies will continue to evaluate their overall director-compensation programs and policies to ensure they are able to attract the best directors to their boards.”
Stephen Miller, CEBS, is an online editor/manager for SHRM.
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Become a SHRM Member
SHRM’s HR Vendor Directory contains over 3,200 companies