Rewards rising for non-executives

Dec 06 2004 by Brian Amble Print This Article

Non-executive director fees have risen by almost 40 per cent this year, according to executive pay consultants Watson Wyatt.

Fees for non-executive are usually reviewed every three to four years. A quarter of the companies in the survey had reviewed fees this year, with an the average increase of 38 per cent.

"This may be the start of a trend of significant pay increases for non-execs," said John Ball, head of executive reward consulting at Watson Wyatt.

"Not only is the workload of non-executive directors growing considerably but there is increasing personal risk from regulation and litigation, and perhaps most importantly, a growing risk to personal reputation."

Last February, an Ernst & Young report found that directors are increasingly reluctant about becoming Non-executives, believing that the job has become too risky, too high profile and too time consuming.

According to Watson Wyatt's 2004 Executive Reward Survey, the average fee for a FTSE 100 non-executive chairman is £198,500 for an average of 100 days work a year.

For other FTSE 100 non-executives the average fee is £36,500, based on an average commitment of 18 days a year. For those that have reviewed fees over the last year, this figure rose to an average of £ 40,000.

"While few non-executives undertake their roles purely for the money, we are likely to see upward pressure on fees better to reflect the increased pressures, responsibilities and required commitment" said John Ball.

"Whilst only 26% of companies in our survey increased NED fees over the last year, it is likely that many of the others will feel the need to catch up over the following year, especially for key roles such as the chairmen of the audit and remuneration committees."