Willis Towers Watson's analysis of director compensation for S&P 500 companies based on their fiscal 2019 data reveals these and other notable benchmarking statistics and year-over-year trends:
Board Leadership
- Virtually all companies with a non-executive board chair (41% of the S&P 500) provide additional compensation for that role. The median incremental compensation is $200K (170% of typical director pay).
- 92% of companies with lead directors (66% of the S&P 500) pay an additional fee for that role, with the median incremental compensation (most commonly cash) at $50K (117% of typical director pay).
Compensation Limits
- 68% of companies have established annual compensation limits. Of those, 31% include a combined fixed value cash & equity limit - not just equity, as was the case historically.
Share Ownership & Retention
- 96% of companies have director stock ownership guidelines and/or retention requirements. 84% of guidelines are based on a multiple (most commonly 5x) of the annual retainer.
- 43% of companies have a stock retention requirement, with 26% imposing a holding period until the stock ownership guidelines are met.
Also noteworthy: 9% of companies have a threshold board or committee meeting fee policy wherein meeting fees are paid after a pre-established number of meetings attended per year.
Access additional resources on our Director Compensation page. This post first appeared in the weekly Society Alert!