Minnesota's Largest Companies Added 32 Directors in Past Year; Percentage of Women Increases, Pay Rises
MINNEAPOLIS, Nov. 17 /PRNewswire/ -- Minnesota's top 30 companies appointed 32 new directors in the past year, or 52 percent more than in 2003, according to Spencer Stuart, the foremost privately held, global executive search firm, in its 2004 Minnesota Board Index. Not only are there more new directors, but director compensation has also risen as board member workloads have increased under Sarbanes-Oxley. "As board members have more responsibilities and heavier workloads, directors are serving on fewer boards and are being paid more," said Susan Boren, manager of Spencer Stuart's Minneapolis/St. Paul office and member of the firm's Board Services Practice. Minnesota's largest 30 companies added 32 directors in the past year, according to proxy filings, compared to 21 in 2003. Of those new directors: -- Eighty-seven percent (26) were men and 13 percent (six) were women. Because only two of the retiring 23 directors were women, women now represent 17 percent of board members versus 14.5 percent in 2003. -- Four of the new directors are ethnic minorities. Minority representation remains unchanged at 10 percent. -- There still is great demand for chairmen/CEOs and presidents. Forty-four percent of the new board members were in this category. However, 16 percent of new board members were chief financial officers or were in financial management, reflecting the increased emphasis on financial expertise as a result of Sarbanes-Oxley. As a result of the increased focus on strong governing boards, more attention is being paid to the ongoing education of directors. At least two companies are now paying educational stipends as part of director compensation, and others are considering it. The 2004 Minnesota Board Index found that 30 percent of the companies increased their board compensation and did so by an average of $17,000. The average retainer for all companies in the index increased to $39,887, or almost a 20 percent increase over 2003. (The figures do not reflect additional stock compensation.) Despite the restrictions of Sarbanes-Oxley, there still appears to be a range of variables in Minnesota boards. The number of directors per board ranges from seven to 23, the number of meetings per year from four to 14 and the percentage of independent directors from 57 percent to 93 percent. Overall, however, the averages for Minnesota boards are consistent with those of the S&P 500. "In looking to the future, several predictions are relatively safe to make. First, the turnover on boards will continue as more directors reach mandatory retirement age," according to Boren. "Second, we will see a lower percentage of new directors coming from the CEO ranks. The CEO historically has been the most sought-after director profile; however, with the increased time commitment of a post Sarbanes-Oxley world, many CEOs are finding they need to decline new boards." About Spencer Stuart Spencer Stuart is the foremost privately held, global executive search firm, spanning over 50 offices in 25 countries. Since 1956, Spencer Stuart has been providing select clients with a range of human capital solutions, including senior-level executive search, board director appointments and strategic leadership services. The firm conducts nearly 4,000 assignments each year, partnering effectively with clients ranging from the Fortune 500, to mid-cap, to emerging growth companies across a broad range of industries and sectors.
SOURCE Spencer Stuart
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