Compensation Advisory Partners Publishes Research Report on Private Company Board Compensation and Governance

NEW YORK--()--Nearly nine in ten private companies (87%) provide some form of compensation to eligible directors and nearly half (45%) compensate “inside” directors (board members who are shareholders, family members, or executives). These are among the survey findings published today by Compensation Advisory Partners (CAP), a premier independent executive compensation consulting firm, to shed light on how firms can compensate private company directors when little to no comparable market pay data exists.

A collaboration between CAP and MLR Media (publisher of Private Company Director and Family Business magazines), the 2019 Private Company Board Compensation and Governance Survey was designed to address the lack of competitive market data for private companies. The firms surveyed private companies about their director pay programs, with more than 600 companies submitting data in May 2019.

“Private companies face unique challenges relative to their publicly traded peers, particularly when it comes to making compensation arrangements for directors,” said Bonnie Schindler, Principal, Compensation Advisory Partners. “Private companies not only lack publicly traded stock, which is a key component of pay packages at public companies, but also lack competitive data, often resorting to using board pay levels at public peers, if any are available.”

“The biggest question I hear from private companies is, ‘What should we pay our directors?’” said David Shaw, Editor and Publishing Director, Private Company Director Magazine. “We decided to do this survey to help our readers answer that question.”

Types of Compensation

According to the survey, private company board compensation programs have two common cash components: an annual retainer and per-meeting fees. An annual retainer, which is an amount paid to each eligible director on an annual or quarterly basis for board service, is offered by 72 percent of private companies surveyed. Per-meeting fees are smaller amounts paid to eligible directors for attendance at each board meeting, and are offered by 54 percent of the companies surveyed.

The median annual retainer is $30,000, and the median per-meeting fee is $2,000. Annual retainers and meeting fees increase with company size. Some companies also pay eligible directors a lesser amount for participation in telephonic meetings, with the median payment being $1,000.

Public vs. Private

“While board retainers and meeting fees are common at private companies, there are aspects of compensation that differ at privately held companies,” said Bertha Masuda, Partner, Compensation Advisory Partners. “Private companies have more flexibility to tailor board compensation programs to their specific needs compared to their publicly traded counterparts.”

Private company board pay programs have been based on a combination of the cash portion of public company director pay and the best judgment of decision-makers at the private companies. In public companies, those eligible for compensation are typically outside directors, or those who have no ties to the company through employment. In contrast, 45 percent of private companies compensate “inside” directors, board members who are shareholders, family members, or executives. Another 7.5 percent of respondents have “other” compensation arrangements for inside directors, likely a hybrid approach that involves some level of compensation for such inside directors, but not to the same degree as outside, independent directors.

“Private companies that wish to evaluate the design of their director pay programs should first determine the primary objectives of the program,” said Schindler. “Companies that are trying to compete for talent or attract special skills should strive to provide a competitive board compensation program, although director pay does not need to be as high as at a public company since private company boards have a lower level of risk, disclosure, and regulation than their publicly traded counterparts.”

To obtain a copy of the 2019 Private Company Board Compensation and Governance Survey please click here.

About Compensation Advisory Partners

Compensation Advisory Partners (CAP) is an independent executive compensation consulting firm with a national practice specializing in executive and director compensation and related corporate governance matters. CAP’s consultants serve as independent advisers in the areas of compensation strategy, program design and in promoting sound corporate governance principles, working with boards of directors and management teams to develop innovative and practical solutions that advance company objectives. The firm’s clients range from some of the largest Fortune 100 multi-nationals to smaller start-ups and nonprofits. CAP clients benefit from the collective intelligence and practical experience of the firm’s experienced compensation consultants who provide superior market insights, value and advisory support to leadership teams. For more information, please visit

About MLR Media

MLR Media builds, serves and engages powerful communities of multi-generational family businesses and public and private company board members through its Directors & Boards, Family Business and Private Company Director brands. MLR Media also produces the Private Company Governance Summit the Transitions Conferences (Spring and Fall), Family Business Generational Wealth and the upcoming Character of the Corporation forum. For more information, please visit


Media: Brian Ruby, ICR, 203-682-8268,

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Media: Brian Ruby, ICR, 203-682-8268,