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- Median Annual Retainer Flat, Long-Term Incentives Creep Up --
- Premiums for 'Big 3' Committee Chairs and Lead Directors Remain Flat -
- Director Median Total Compensation Ranging Between $275,000 and $295,000 -
LOS ANGELES, June 5, 2017 — The Korn Ferry division of Korn Ferry (NYSE:KFY) has released findings of its seventh annual director compensation study. The study, which includes data from the 300 largest companies with revenues greater than $9 billion that filed their proxy statements between May 1, 2016 and April 30, 2017, finds that overall director total direct compensation continues to rise.
In 2016, the median total director compensation for directors in the analyzed companies ranged between $275,000 to $295,000, up from the 2015 range of $265,000 to $280,000.
“It’s not surprising that we're seeing director compensation increases,” said Irv Becker, Senior Client Partner and North American leader for Korn Ferry’s Executive Pay & Governance practice. “This rise reflects increased board responsibilities and time commitments, and the greater pressures members face from investors and governance watchdogs.”
More companies are continuing to eliminate fees for simply attending board meetings, with board meeting fees now paid by only 11 percent of companies in the study, down from 16 percent last year. Instead, companies are focusing on packages that include an annual retainer, committee chair retainers, and long-term incentives.
'Director pay needs to move higher faster, especially for lead directors,' says Dennis Carey, Co-Leader of Korn Ferry's Board Services Practice. 'Even though the vast majority of directors take on the role without focusing on compensation, boards should recognize the value directors bring and not be shy about aggressively rewarding them for their time and fiduciary responsibilities.'
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