Median total compensation of outside corporate directors surpassed the $200,000 threshold for the first time, rising to $200,698 in 2009, according to a Towers Watson analysis released Monday on director compensation at 469 major U.S. companies.
However, that’s a 0.4% increase from the 2008 level — far below the 3% rise from the previous year and the average of nearly 10% annually in the years of the past decade before the economic crisis, wrote Theresa Tovar, consultant, and Robert Newbury, senior consultant, who co-authored the study, “Has Director Pay Found Its Floor?”
Of the 17 companies identified in the Towers Watson 2008 analysis that cut pay for directors during the economic downturn, 13 of them reinstated pay in 2009 to levels before the economic collapse, the study said.
Forty percent of companies paid board-meeting fees in 2009, down from 44% in 2008. Some 45% of companies paid committee-meeting fees last year, down from 48% in 2008.
Of the 21 companies that eliminated board-meeting fees in 2009, 15 of them provided a corresponding increase to their annual board cash retainer. And 12 of the 16 companies that eliminated committee-meeting fees in 2009 provided an increase in the retainer provided for the committee service.
Median cash compensation for external directors increased 1% to $85,000 in 2009 compared to 2008, while the median value of equity awards also increased 1%, to $104,939.
Based on median compensation levels, the mix of pay for directors included 48% cash and 52% equity in 2009, compared to 46% cash and 54% equity in 2008, the study said.
Towers Watson based its latest analysis of outside director compensation on proxy statements filed as of last June 30 for 469 major publicly traded companies. The previous year’s study analyzed 461 companies.