While executive compensation is widely reported on, director compensation often flies under the radar. Compensation is one of several issues investors watch closely at publicly traded companies, including gender diversity on boards of directors and worker pay.
While board members don’t have day-to-day obligations at the companies they serve, they do have a big workload, and it’s growing. There are more frequent meetings than in the past and directors have to spend more time on their own understanding issues and challenges at their companies and in their industries, according to Jan Koors, a senior managing director and president of the Western region at executive compensation consultancy Pearl Meyer.
Still, relatively few companies provide an explanation of the factors they consider when determining director pay. Institutional Shareholder Services, a proxy advisory firm, has indicated it is going to increase its scrutiny of director compensation, Koors said.