How Much Do Board Of Directors Make?

How Much Do Board Of Directors Make?


The median pay for a corporate board member was $253,512 in 2017, according to the most recent compensation data from executive research firm Equilar. That's a haul most Americans can only dream of, BUT it's worth noting that not all boards are created equal.


For example, membership on a board of a small, private company may not be as lucrative as a seat on the board of a major public company. In fact, many small companies don't pay their board members anything at all. So how much do board of directors make? It really depends on the size and status of the company.


The median pay for a corporate board member was $253,512 in 2017, according to the most recent compensation data from executive research firm Equilar. That's a haul most Americans can only dream of, BUT it's worth noting that not all boards are created equal.


For example, membership on a board of a small, private company may not be as lucrative as a seat on the board of a major public company. In fact, many small companies don't pay their board members anything at all. So how much do board of directors make? It really depends on the size and status of the company.

This is a common question asked by those looking to join a board of directors. And it's a difficult question to answer because there is no set salary for directors. They typically earn an annual retainer fee and sometimes receive additional payments for attending meetings and fulfilling other duties. But the size of these fees can vary widely based on the company's budget and the responsibilities of the board.


So how much do board of directors make? It depends on the company and the position, but they can often earn several thousand dollars per year in fees. Some companies may also provide stock options or other benefits, which can add to the director's compensation package.

Most board of directors make a small salary for their service on the board, but they also receive other forms of compensation, such as stock options and bonuses. The amount of money a board of directors make is determined by the size of the company and the industry it is in.


The median base salary for a board member was $110,000 in 2016, according to a survey by compensation data firm Equilar. However, total direct compensation was much higher when factoring in annual bonuses, long-term incentive payouts, and other benefits. The median total direct compensation was $ 215,525.


Not all companies disclose how much they compensate their board members, but Equilar’s data provides a good indication of what large publicly traded companies pay their directors. For instance, Apple Inc. (AAPL) disclosed in its most recent proxy statement that it paid each of its eight directors an annual cash retainer of $50,000. In addition, each director received $250,000 worth of Apple stock and $16,667 in meeting fees for attending board and committee meetings.

The median compensation for board members at large companies was $247,515 in 2017, according to Equilar, an executive data firm. That was a 7.6% increase from 2016. At small-cap companies, it was $58,375, a 5.5% jump.


The trend is likely to continue this year: Directors at S&P 500 companies are on track to receive an 8% raise in 2018, bringing the median pay to $266,44, Equilar projects.


If you're a shareholder - and therefore a co-owner of the company - you might reasonably ask: Why are they being paid so much more?


Boards have come under increased scrutiny in recent years as shareholder activists have pushed for changes at many big companies. Some investors have also balked at high CEO pay packages. But until now, there hasn't been as much focus on what boards themselves are being paid.


How are boards compensated?


Directors typically earn two types of compensation: a retainer for attending meetings and serving on committees, and stock awards that vest over time.


The median retainer among S&P 500 companies was $36,000 last year, up 4% from 2016, Equilar found. The median annual equity grant was $70,438 - up nearly 9% from the prior year.


How do they compare to last year and the year before?


Pay for directors has been climbing steadily for several years. Between 2014 and 2017, median total compensation increased nearly 28% at large companies and nearly 24% at small caps.


Do they make more than the CEO?


No. The median CEO pay package was $11.7 million last year - about 47 times what a typical director makes.


What's driving the increases?


"Shareholders are more focused than ever on governance and want to make sure that their interests are being represented at the board level," said Aaron Boyd, head of governance research at Equilar.

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