Minnesota's Largest Companies Added 32 Directors in Past Year; Percentage of Women Increases, Pay Rises

Nov 17, 2004, 00:00 ET from Spencer Stuart

    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