Compensation for outside corporate directors increased 'moderately' in 2015 – Fortune 500 study by Willis Towers Watson

Total pay for 'outside directors' in the USA's largest corporations increased by 3% in 2015, 'driven by increases in both cash and stock compensation', according to a new analysis by Willis Towers Watson. The study also found the annual cash retainer for board service reached $100,000 for the first time as companies continue to push toward a fixed approach to director pay.

Among the key findings:

• Median total direct compensation for directors climbed 3% last year, to $263,500 – an increase from nearly $255,000 in 2014.
• Total compensation, which includes cash pay, and annual or recurring stock awards, had increased 4% the previous year.
• The median value of cash compensation increased 6% in 2015, to more than $108,000.
• The value of stock compensation rose 3% at the median, to almost $150,000.
• The average mix of pay remained relatively constant at 57% in equity and 43% in cash.
• The annual cash retainer for board service increased 9% in 2015, rising to a record high of $100,000 at the median. About a fifth of the companies (19%) increased their board retainer.

Robert Mustich, leader of Willis Towers Watson’s Executive Compensation Consulting practice in the eastern United States, said:

'Companies continue to adjust their director pay programmes with an eye toward rewarding directors for their overall contributions rather than for how many meetings they attend. The fact that a third of the companies we analysed changed one or more core elements of their pay programme in the past year reflects an ongoing trend toward companies reviewing and adjusting their director pay packages on a regular basis to remain competitive.'

Willis Towers Watson analysed the compensation for outside directors at 250 publicly-owned Fortune 500 companies that filed their fiscal year 2015 proxy statements by 30 June 2016. Data for these companies were then compared against an analysis of the same 250 Fortune 500 companies for 2014. For more information, please visit: www.willistowerswatson.com/en/press/2016/0...