SOURCE: The Corporate Library

March 18, 2008 09:37 ET

Board Compensation Averages Over $1 Million per Company

PORTLAND, ME--(Marketwire - March 18, 2008) - U.S. public corporations spent an average of just over $1 million on board compensation last year, according to a study of more than 3,000 U.S. companies by The Corporate Library. These payments included the total of director cash payments, equity awards, and changes in value of pensions and non-qualified deferred compensation amounts.

Nearly one-third (32%) of the companies in the study paid less than $500,000 in compensation to the full board last year. At the other extreme, nine companies paid over $2 million in cash director fees in 2006, including American International Group, Honeywell International, and Northrop Grumman. One company -- Valero Energy -- spent over $30 million on its board of directors, with most of that pay going to a single director, William E. Greehey. The amount of total board compensation varied based on market capitalization.

"The findings show that, with the exception of a few outliers, most companies are not spending an unreasonable amount on their boards," said the report's author, Senior Research Associate Annalisa Barrett.

The study also found that, while the practice is very unusual, six companies offered their full board a cash bonus based on company performance. On the other hand, the practice of establishing stock ownership guidelines for directors is on the rise. For the S&P 1500, the prevalence of ownership guidelines has increased from 29% in 2005 to 46% in 2007. The study provides a detailed analysis of the stock ownership guidelines in place at S&P 500 companies.

Also included in the report is an analysis of each component of full board compensation by:

--  S&P index;
--  Fortune rank;
--  market capitalization; and
--  industry.
    

The report is available for $495 from The Corporate Library's online store at www.thecorporatelibrary.com.

About The Corporate Library

The Corporate Library is an independent research firm focused on the U.S. and Canadian public market which offers corporate governance information products, research services and data products. It produces the definitive ratings of U.S. corporate boards of directors, allowing businesses that subscribe to the service to evaluate governance as an element of investment and other risk. Additional information can be found at www.thecorporatelibrary.com.

Contact Information

  • Contact:
    Cheri Grimmett
    Media Relations, The Corporate Library
    Email Contact
    207 553-5604