Has Director Pay Reached a Tipping Point?

Pearl Meyer and NACD provide a preview of the most recently available board pay data for more than 1400 public companies, based on our annual Director Compensation Report and proxy data from Main Data Group. Report authors Jan Koors and Joe Tripolitakis discuss how proxy advisors are likely to evaluate board compensation this year. They also provide insight into the growing conflict between the board’s rapidly increasing responsibility and time commitments, and the external environment and scrutiny of director pay, including:

• Boards are operating in a time of intense media and stakeholder scrutiny;
• The depth and breadth of director oversight and time commitment is growing and there is demand for increased expertise/experience in areas like technology, cyber security, HR, innovation, etc.;
• Annual increases in director pay continue to be modest;
• ISS is analyzing director compensation to identify companies that “consistently” (defined as two or more years in a row) compensate directors at the top 2-3% of the market; and
• There is a call to better align director pay to shareholder interests.