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Corporate Board Members Still Getting Nice Pay Raises

You and your colleagues might be told you're lucky to get a two percent raise--or to have a job at all--but chances are the folks on your board of directors are being treated quite a bit better.

Directors at large companies got raises "in the mid single digits" in 2010, according to the annual survey of director compensation conducted by Pearl Meyer & Partners and published by the National Association of Corporate Directors. The study looks at compensation at 1,400 companies in 24 industries.

At companies with less than $500 million in revenues, directors got hefty raises. On average, their compensation went up about 20 percent. That's mostly because smaller companies are most likely to use stock options for a portion of director compensation, and their shares did relatively well over the past year.

Pretty good for a part-time job
Here's what directors at different-size companies got paid, and how much of their compensation was in cash. Keep in mind that many directors sit on multiple boards. Keep in mind: although there's a lot of responsibility that comes with being a director, these are not anywhere near full-time jobs.

  • At micro companies-those with $50 million to $500 million in revenues--directors received an average of $90,775 each for a one-year term. Some $36,825 of that was in cash.
  • At small companies--those with $500 million to $1 billion in revenues--directors got an average of $119, 408 each. Some $45,750 of that was in cash.
  • At medium-sized companies--those with $1 to $2.5 billion in sales--directors got an average of $148,476, with about $54,000 of that coming in cash.
  • At large companies--those with more than $2.5 billion in sales--directors got an average of $175,750, with about $64,000 of that in cash.
  • At the 200 largest companies in the S&P500, as determined by revenues, directors received an average of $228,058, with $90,000 of that in cash.
The cash portion of these awards is increasingly coming as a retainer, rather than as compensation for attending a meeting. Between conference calls and email, it was getting harder for boards to decide what officially constituted a 'meeting' and what was just a bunch of board members on a conference call. So per-meeting fees are being phased out, replaced by slightly higher retainers.

The stock portion of board compensation is shifting, too. At big companies, it's more likely for board members to get a fixed amount of equity, while at smaller companies, board members are more likely to receive a fixed number of shares. Big companies tend to award full-value shares, while smaller ones still often use options instead.

Who's on Your Board?

  • The median age of a board member is 62.
  • On average, directors serve for just under 7 ½ years.
  • Most board members are men. Larger companies more likely to have female directors. Some 29 percent of largest companies have more at least three female directors, compared to just 2 percent of the smallest.
  • At the largest 200 companies, it's still common for the CEO to be the Chairman of the Board. Some 70% of the biggest companies still have a single person serving both functions. At micro companies, only 40% of CEOs are also board chairs.
Do board members' experience and contributions entitle them to this level of pay? Or do they need to come down to earth a bit?


Image courtesy of flickr user Andrew Feinberg
Kimberly Weisul is a freelance writer, editor and consultant. Follow her on twitter at
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