NEW YORK, July 31, 2012 /PRNewswire/ -- Among the top 200 U.S. companies, the median total remuneration paid to non-employee directors was $250,000 in 2011, an increase of +4% over 2010 levels. Results are based on a study of the top 200 public U.S. companies, ranked by revenue, recently completed by executive compensation consultancy Steven Hall & Partners.
In August 2012, Steven Hall & Partners will release its full report on 2011 non-employee director compensation. The study will include an analysis of overall compensation levels (in the aggregate and by pay element) as well as an in-depth examination of trends in director compensation and related governance matters over the last five years.
"Over the past two years, companies have taken a conservative approach with respect to director compensation in light of the ongoing economic uncertainty and continued public scrutiny of officer and director pay levels," said Joseph Sorrentino, Managing Director of Steven Hall & Partners. "These changes in director pay mirror the modest increases observed for executive salaries but come at a time of ever increasing workloads for directors, particularly in light of their heightened responsibilities with respect to successful passage of Say on Pay ballot initiatives."
The pay mix for the average director has remained relatively unchanged since 2006, with non-employee directors continuing to receive just over half of their total compensation in the form of equity (53% in 2011).
This equity compensation is delivered predominantly in full value shares, as options continue their march towards obsolescence in director compensation packages. The prevalence of full value awards increased to 94% (up from 90% in 2010) while the prevalence of options sank to 16%, the lowest level observed since the inception of the Steven Hall & Partners study. In 2006, nearly 35% of companies in the top 200 utilized stock options as part of their equity compensation program for directors.
Compensation for Committee Service
While median retainers paid to Audit and Nominating/Governance Committee chairs remained flat in 2011 at $20,000 and $10,000 respectively, compensation for Compensation Committee chairs increased +5% to $15,000. "This change juxtaposes the desire to limit increases to director pay on the one hand with the reality of dramatically increased workloads for Compensation Committee chairs on the other," commented Nora McCord of Steven Hall & Partners. "Annual Say on Pay votes have prompted even greater focus on alignment of pay for performance, enhanced CD&A disclosure and shareholder outreach efforts, all of which are spearheaded by the Chair of the Compensation Committee." In 2011, retainers paid to Compensation Committee chairs are now equal to those paid to their Audit Committee colleagues for 34% of companies studied.
About the Study
The study analyzed non-employee director compensation data as disclosed in the most recent proxy statements filed for the 200 largest U.S. public companies, ranked by revenues. Unless otherwise noted, all statistics reflect year over year changes in median compensation levels. Analysis of total remuneration is based on pay for an average director, defined as a director who chairs one committee and serves as a member of another; in each case, committee fees reflect the average for the Audit, Compensation and Nominating/Governance committees. For additional details regarding the study please contact Steven Hall Jr. at 212-488-5400 or firstname.lastname@example.org.
About Steven Hall & Partners
Steven Hall & Partners is an independent executive compensation consulting firm serving as outside counsel to Boards, Compensation Committees and management. The firm focuses solely on executive compensation, Director remuneration and related corporate governance matters. For more information, please visit www.shallpartners.com and follow us on Twitter @SHallPartners.
Steven Hall Jr.
Steven Hall & Partners
SOURCE Steven Hall & Partners