Median director total compensation rose to an even $250,000 in 2014, a 4% increase from the previous year, said a Towers Watson report released Thursday that analyzed 470 publicly traded companies on the Fortune 500 list.
The “total compensation increase was driven primarily by higher stock values,” wrote Michael Bowie, author of the report and consultant in the executive compensation resources group at Towers Watson.
The median increase last year was 6% from the previous year.
The median value of the cash component of total compensation remained flat at $100,000, while the median compensation from annual and recurring stock awards rose 7% to $139,988.
In all, 56% of median director pay was from equity compensation and 44% from cash, the same makeup as the previous year. The difference from the $250,000 is because the median components of the cash and equity compensation are not additive, said Paul Conley, U.S. west division leader for executive compensation at Towers Watson.
The total compensation in 2014 ranges from $220,304 in the 25th percentile to $283,623 in the 75th percentile, the report said.
Only 19% of the companies pay a board meeting fee, down from 23% the previous year. The fee was a median $2,000 in 2014, unchanged from the previous year.
Some 30% of companies pay a cash retainer for a committee membership, up from 28% last year. The median cash retainer for a committee assignment was $10,000, the same as the previous year.
“Director compensation continues to increase moderately, largely backed by pay components based on fixed-dollar amounts that afford companies more control over compensation levels,” Mr. Bowie wrote in the report. “As demands and pressures on directors continue to rise, particularly through committee work, moderate annual increases in directors' pay may remain the norm in the coming years.”
Towers Watson's latest data were for companies that filed proxy statements by June 30 of this year. Its 2013 comparison analysis was made up of 474 publicly traded companies on the Fortune 500 list.
