Oil prices are not the only thing that have been surging in the U.S economy. Directors' pay is rising almost as fast as the price of fuel.
The U.S economy may be stuttering over the effects of oil prices and the aftermath of hurricanes Rita and Katrina, but when it comes to boardroom pay, the only way, it seems, is up.
According to consultancy Pearl Meyer & Partners, the average compensation package for a director of a major U.S company surged to more than $195,000 last year, the second year of double-digit growth.
Increased responsibilities and the challenge of finding, and keeping, the right people were fuelling this growth, the research suggested.
It also revealed a continued trend away from the use of stock options in favour of providing directors with restricted stock grants Ė or stock where there is a certain length of time that must pass or a goal be achieved before it can be sold.
Chairs of audit and compensation committees also saw significant increases in their reward packages.
"Members today are confronted by greatly increased time demands, a more rigorous regulatory landscape and a shrinking pool of willing candidates who meet new standards of expertise and independence," said David N. Swinford, senior managing director.
The figures showed that average total remuneration for the top 200 directors rose 11 per cent to $195,443, marked by a major shift in the use of equity incentives.
A record 86 per cent of the top 200 companies provided directors with grants of full-value shares, which rose an average one-third in value to $67,801.
Conversely, about half of the boards polled provided members with stock options, down from three-quarters in 2002.
Meanwhile, the remuneration of the Chairs of companies' audit and compensation committees also saw significant growth because of their critical responsibilities around two of the most controversial and rapidly-evolving areas of governance.
"Many of the board's toughest decisions are forged in the audit and compensation committees," said Swinford.
Retainers for audit committee chairs rose an average 19 per cent to $16,082 and 14 per cent to $11,312 for compensation chairs.
Among the 24 industries studied, directors of securities and healthcare companies were pay leaders by a wide margin, posting double-digit increases that brought average board compensation to nearly $350,000, the study added.