U.S boardroom pay rises 20%

Jan 11 2006 by Nic Paton Print This Article

Boardroom pay in America went up by an average of 19.6 per cent last year, while individual company directors pocketed an extra 16.5 per cent, a U.S study has calculated.

The research by research body Board Analyst also reported that the average total board compensation was $801,500 (£455,460).

The study, covering more than 2,000 U.S corporations, was gleaned from an analysis of company returns, as well as data on committee membership, chairmanship appointments, number of meetings held, tenure and director status, and how many directors were on each board in the fiscal years being studied.

"Although there are some highly-compensated directors and highly-compensated boards, what surprised us the most was that, in general, director compensation was so moderate, particularly as directors are the one group of workers who are mandated to set their own pay," said Paul Hodgson, senior research associate with board analyst.

"That could even be one of the reasons why director pay is so restrained," he added.

He continued: "The pay setting process surrounding their own compensation shows a degree of restraint that might be thought unusual given the controversy that rages about some of their decisions regarding the pay of their executive counterparts."

By comparison, a study in September by consultancy Pearl Meyer & Partners estimated the average compensation package for a director of a major U.S company was more than $195,000 last year (£111,000), the second year of double-digit growth.