Director Compensation

Compensation for U.S. Boards of Directors continues to rise steadily in response to the position's growing time demands, pressures and responsibilities. Pearl Meyer & Partners' annual Director Compensation Report provides a comprehensive review of pay practices among the Top 200 U.S. industrial and service companies. The 2007 report introduces a new methodology that captures additional details of non-employee Board and committee pay available under expanded proxy disclosure rules, allowing for a more precise value of actual pay per Director. Also captured is information related to use of stock-based incentives; equity ownership; Board leadership arrangements; and industry practices.

Among the trends revealed in 2007 public filings:

• A 10% increase in the median total value of equity delivered to Directors
• A fifth straight decline in the average value of option grants to Directors
• A 19% increase in the median value of full-value stock awards
• A 50% decrease in the median value of annual Board meeting fees, provided by about half of the Top 200 companies
• A decline in median compensation for members of the Audit, Compensation and Governance/Nominating Committees
• A general leveling off of compensation for Committee Chairs, with somewhat more significant growth for Governance/Nominating Committee Chairs
  

Pearl Meyer & Partners' reputation and longtime expertise in advising Boards on pay and governance issues is reflected in its Alliance Partnership with the National Association of Corporate Directors (NACD) and involvement in the NACD's research, training and educational programs. In addition to the Top 200 report, PM&P conducts the NACD's own annual Director Compensation Survey, which analyzes pay practices among a broader-based group of 1,200 public U.S. companies.