Meridian Compensation Partners, LLC Observes Modest Increase in Compensation for Outside Directors Over Recent Years

Historical Median Total Compensation (Graphic: Business Wire)

LAKE FOREST, Ill.--()--Meridian Compensation Partners, LLC, a leading executive compensation and corporate governance consulting firm, has found that median total compensation paid to outside directors in the Fortune 250 increased just under 3% in the past year. Equity grants continue to comprise over one-half (58%) of total compensation with median equity grant values increasing at a higher rate than total cash.

Equity is most commonly granted in the form of time-based restricted stock/units and serves as a useful vehicle to align director compensation with interests of shareholders. Companies have increasingly required equity deferral until retirement or after director service ends, as opposed to a specified vesting schedule. When applied, time-based vesting schedules most commonly end after one year to align with annual director elections. In addition, a large majority of Fortune 250 companies target an annual grant value instead of a fixed number of shares or units, to deliver market-competitive pay.

Meridian’s findings were based on proxy statements filed in 2014. For the study, total outside director compensation included board cash retainer, board and committee meeting fees (includes additional chair and member retainers), and equity awards. Meridian found the median total compensation for companies in the Fortune 100 and Fortune 250 to be $267,614 and $256,136, respectively.

2013 Median Total Compensation

Fortune

Segment

  Revenues
(FY13 $M)
 

Market

Value

(FY13 $M)

 

Board

Cash

Retainer

 

Avg. Board

Mtg. Fees

 

Avg.

Comm.

Fees

 

Total

Cash

 

Equity

Grant

Value

 

Total

Compensation

Fortune 100   $55,547   $57,277   $95,000   $16,250   $11,111   $111,389   $158,288   $267,614
Fortune 250   $23,114   $31,135   $90,000   $16,000   $11,364   $111,000   $150,000   $256,136

Note: Summary statistics are not additive

About Meridian Compensation Partners, LLC

With over 50 associates in 8 offices in the United States and Canada, Meridian’s executive compensation consultants provide independent, trusted counsel to Boards and management at hundreds of large companies in North America. We consult on executive compensation and its design, amounts and corporate governance issues. Visit us at www.meridiancp.com

Contacts

Meridian Compensation Partners, LLC
Abby Brunks, Consultant
847-235-3600
abrunks@meridiancp.com
www.meridiancp.com

Release Summary

Meridian Compensation Partners releases its 2014 study of compensation of outside corporate directors.

Contacts

Meridian Compensation Partners, LLC
Abby Brunks, Consultant
847-235-3600
abrunks@meridiancp.com
www.meridiancp.com