Hewitt Associates recently released an analysis of compensation programs for outside directors at 708 public companies (average sales volume $12.5 billion, median $3.4 billion), the data drawn from public documents between January 1 and December 31, 2009.
Based on the information collected, Hewitt reports the average outside director compensation package to be comprised of the following components in the proportions shown:
- 99% of companies provide an annual retainer.
- 79% are distributed solely in cash, 2% solely in equity and 18% of retainers include a mix of cash and equity.
- The average annual retainer is $67,262 and the median is $50,000.
Board meetings and fees
- 56% of companies pay board meeting fees.
- The average fee is $1,094 and the median is $1,000 per meeting.
- The boards studied met on average 8 times during the study period.
Committees and fees
- 97% of companies pay additionally for committee service.
- Median meeting fees (for Audit, Compensation and Nominating and Governance Committees) is $1,500 per meeting.
- 93% of companies pay the chairman of the Audit Committee a retainer fee (median $15,000).
- 90% of companies pay the chairman of the Compensation Committee a retainer fee (median $10,000).
- 86% of companies pay the chairman of the Nominating and Governance Committee a retainer fee (median ($10,000).
- 83% of companies provide some form of nonretainer equity compensation.
- The median and average economic values (fair market on 3/31/09) of nonretainer equity grants are $59,172 and $68,767, respectively.
Hewitt's analysis is rich with further information and details (including subanalyses by industry and company size), very worth checking out if you are seeking intelligence on outside director compensation.
Image from Hewitt 2010 Analysis of Outside Board of Director Compensation.