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By Matthew Quinn
Corporate board pay levels are flat or down in 2010 compared to last year, according to The National Association of Corporate Directors' annual director compensation survey. Additionally, the survey found that compensation is increasingly being made up of cash.
Four of the five categories examined by the survey, which was created in partnership with consulting firm Pearl Meyer & Partners, showed declines.
For public companies with revenues of $50 million to $500 million, the median total direct compensation for a board member decreased 3 percent to $75,490. Director pay at companies with revenues of $500 million to $1 billion fell 6 percent to $108,836. At companies with revenues between $1 billion and $2.5 billion, the median compensation was $131,054 last year, down 2 percent, while directors of companies with revenues of $2.5 billion to $10 billion saw their compensation fall 1 percent to $164,455. Only directors of companies with revenues over $10 billion experienced an increase in median compensation, rising 1 percent to $216,186.
Cash compensation, consisting of annual retainers and fees for board and committee service, represented a greater proportion of total compensation in 2010 than in 2009. The percentage of director pay in the form of equity declined significantly, largely as a result of lower share prices. While stock compensation was generally below the 50 percent benchmark, there was also a significant shift away from the use of stock options in favor of full-value share grants.
"We expect to see further movement from stock options to full value shares as directors show an appreciation of the current state of play and their commitment to following leading practices," said Ken Daly, CEO and president of NACD.
By industry, pharmaceutical and medical products companies, diversified financial and brokerage companies, oil companies, and computer products and services companies paid their directors the most. The lowest compensated were found in the transportation and distribution, motor vehicles and parts, and banks/savings and loans industries.
Directors sitting on a company's audit committee were paid the most, followed by compensation committee members.
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