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More Pay For A Tougher Job
13 % Raise for Directors Reflects New Demands, Longer Hours; 47% Pay Boost for Audit Chairs

NEW YORK, August 12, 2004 - Board compensation grew 13% to nearly $176,000 in 2003, as leading corporations moved to adapt Director pay programs to a radically changed Boardroom environment. The increases follows two straight years in which Board pay at the Top 200 U.S. industrial and service companies was nearly flat, according to a new study by compensation consultants Pearl Meyer & Partners.

Compensation for committee service saw the biggest jump, swelling on average by approximately 35% to over $23,000, including a 47% rise in Audit Chair fees and retainers and a 24% pay increase for Compensation Committee heads. In a significant shift, the use of full value shares surpassed stock options for the first time since equity became an integral part of Director compensation programs a decade ago, according to Pearl Meyer's proxy-based report, which will be released this fall.

"Board pay is catching up with the new realities of Board service - more responsibility, more time and a lot more pressure," said Managing Director Edward C. Archer, who estimated that the average Top 200 Director spends one-third more time on the job now than two years earlier. "These leading Boards have moved from the rear guard into the front lines of corporate governance," said Mr. Archer.

Shift in Pay Patterns
The percentage of pay delivered in equity - full value shares and stock options - declined for the second straight year, from 60% to 57% of total Board remuneration. Average equity values increased 7% to over $99,000, while cash compensation rose 21% to $75,000, including a 17% increase in average cash retainers to $45,000.

Following a similar shift in the use of equity incentives for top executives, fewer companies granted stock options to Directors - 59% of the Top 200 companies compared to 70% one year earlier. The change in equity use reflects a consensus among governance activists that full value incentives better promote a long-term perspective on corporate performance. Stock option values were down over 5% to about $49,000, due in part to the market slump in the first half of 2003, while full value awards rose 23% to more than $50,000.

Close to half of the Top 200 Boards in 2003 provided premiums for service on specific committees - most commonly Audit and Compensation - based on the additional time and responsibility involved. As an example, Mr. Archer said Audit Committees met an average of nine times in 2003 - twice as often as five years earlier - due largely to new requirements.

Financial and Healthcare Firms Remain Pay Leaders
The Securities industry ranked first in Board pay at nearly $307,000 - roughly 75% more than the average Top 200 Director - and also reported the largest stock awards at over $234,000 and second highest committee fees at over $28,000. Diversified Financial companies ranked second in total pay, averaging $258,000, followed by Healthcare at $255,000. While those three industries also led in use of Board equity, Healthcare's cash retainer was the lowest among the 24 industries studied at $35,000, and the Securities sector provided the second lowest Board meeting fees at $2,500 annually. The Energy/Utilities, Food/Drug Store Chains and Transportation/Delivery sectors reported the lowest levels of Board compensation, averaging $124,000, $127,000 and $136,000 respectively and ranked at the bottom in equity use.

About Pearl Meyer & Partners
Founded in 1989, Pearl Meyer & Partners is recognized for its counsel to Board Compensation Committees and senior managements. The firm specializes in the evaluation, design, development and implementation of compensation programs for executives, employees and Boards, as well as issues related to corporate governance. Services also include customized marketplace surveys, organizational development and sales incentives, all supported by strong actuarial and benefits expertise. Headquartered in New York, Pearl Meyer & Partners maintains offices in Atlanta, Boston, Charlotte, Chicago, Houston and Los Angeles.

Pearl Meyer & Partners is a practice of Clark Consulting (NYSE: CLK), a leading publicly traded firm in its field, serving more than 3,800 U.S. companies nationwide with comprehensive advice on the design, financing and administration of compensation and benefit programs.

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