According to a recent study by Mercer of compensation for board members of S&P 500 companies shows pay increased by 8% in 2011 driven by increased board retainers and equity awards. For baseline board service – duties and responsibilities common to directors regardless of service on committees or in other roles – annual cash retainers rose 15% to a median $75,000 and equity compensation increased 10% to a median $131,900. The largest companies in the S&P 500 paid slightly more: in 2011, a director of an S&P 100 company received a median retainer of $85,000 and equity grant of $150,100. Total direct compensation (retainer plus meeting fees plus equity grant) for board service in the same year rose 8% to $216,700. Mercer’s analysis is derived from 2009 – 2011 data-year proxy statement disclosures filed with the Securities Exchange Commission by each company in the S&P 500.
According to Ted Jarvis, Global Director of Rewards Data, Research and Publications at Mercer, the increase in retainers comes as more companies discontinue incremental payments for attending board meetings. For companies continuing this practice in 2011, the median per-meeting fee remained at the 2010 level of $2,000 (which also was the 75th percentile). However, the prevalence of meeting fees among all S&P 500 companies fell from 43% in 2010 to 36% in 2011. Of the 30 companies eliminating meeting fees in 2011, 24 increased board retainers to keep year-over-year cash compensation roughly equivalent. The combination of higher retainers and fewer meeting fees resulted in a 1% increase in median cash compensation.
While nearly all (97%) of the S&P 500 companies grant some type of equity award for board service, the prevalence of companies providing stock options or stock appreciation rights to directors dropped to 22% in 2011 from 26% in 2010. Options are granted typically as part of a portfolio. Among those companies granting options and full-value shares (just 18%), options accounted for about half of the award’s value. Full-value shares as the sole equity vehicle granted to board members is most common, used by more than two-thirds (77%) of S&P 500 companies.
Almost two-thirds (62%) of companies provide at least one equity vehicle on a “fixed value” basis in which the number of shares or options varies from year to year while the dollar value remains constant. This approach to sizing grants is most likely growing in popularity due to wide swings in stock market prices.
Despite shareholder watchdogs’ long-standing criticism, companies continue to provide a wide variety of benefits to directors and the prevalence of many of these perquisites rose in 2011. The most common benefit, a matching gift policy, was provided by 32% of the S&P 500 companies in 2011 compared to 29% the year before. Life insurance and spousal travel reimbursement were offered by 15% of companies in 2011 (up from 14% and 13%, respectively in 2010). While only 15% of the S&P 500 companies disclosed reimbursing expenses for director education in 2011 (up from 11% in 2010), the actual prevalence of this benefit may be underreported.
Read: www.Mercer.com
Read: https://www.corpgov.deloitte.com/site/us/menuitem.0af0f38726a2a265730459246cdf8a0c/
Chief Executive Group exists to improve the performance of U.S. CEOs, senior executives and public-company directors, helping you grow your companies, build your communities and strengthen society. Learn more at chiefexecutivegroup.com.
0
1:00 - 5:00 pm
Over 70% of Executives Surveyed Agree: Many Strategic Planning Efforts Lack Systematic Approach Tips for Enhancing Your Strategic Planning Process
Executives expressed frustration with their current strategic planning process. Issues include:
Steve Rutan and Denise Harrison have put together an afternoon workshop that will provide the tools you need to address these concerns. They have worked with hundreds of executives to develop a systematic approach that will enable your team to make better decisions during strategic planning. Steve and Denise will walk you through exercises for prioritizing your lists and steps that will reset and reinvigorate your process. This will be a hands-on workshop that will enable you to think about your business as you use the tools that are being presented. If you are ready for a Strategic Planning tune-up, select this workshop in your registration form. The additional fee of $695 will be added to your total.
2:00 - 5:00 pm
Female leaders face the same issues all leaders do, but they often face additional challenges too. In this peer session, we will facilitate a discussion of best practices and how to overcome common barriers to help women leaders be more effective within and outside their organizations.
Limited space available.
10:30 - 5:00 pm
General’s Retreat at Hermitage Golf Course
Sponsored by UBS
General’s Retreat, built in 1986 with architect Gary Roger Baird, has been voted the “Best Golf Course in Nashville” and is a “must play” when visiting the Nashville, Tennessee area. With the beautiful setting along the Cumberland River, golfers of all capabilities will thoroughly enjoy the golf, scenery and hospitality.
The golf outing fee includes transportation to and from the hotel, greens/cart fees, use of practice facilities, and boxed lunch. The bus will leave the hotel at 10:30 am for a noon shotgun start and return to the hotel after the cocktail reception following the completion of the round.
