It’s a good gig, if you can get it.
Among the companies in the S&P500, the average non-executive directors’ pay topped $300,000 for the first time last year, making it 43% higher than it was a mere 10 years ago. If your paycheck isn’t almost 50% higher than it was in 2009, maybe you should be applying for these positions. And they come with other perks.
As a member of the board, you only meet a few times a year, and typically get together at nice locations, with all expenses paid. And then there are stock options, which can significantly goose your income.
Directors at biotechnology company Regeneron Pharmaceuticals Inc received, on average, $1.2 million in compensation last year, which doesn’t include the $6 million taken home by the chairman.
Those lucky enough to land a seat on the board of Goldman Sachs made $599,279 in 2018. It sounds great, but they took a pay cut from the $604,837 they made in 2017. This hard-working group had to attend 13 meetings last year.
On average the boards of the companies in the S&P 500 met just 7.9 times last year, down from 9 times a decade ago.
It’s not a surprise that board compensation continues to climb because they set their own pay. Although, some are now putting their board compensation to a shareholder vote as word of their largesse gets around and shareholders get noisy.
Paul Hodgson, a compensation expert and senior adviser at ESGuage, said:
“There’s a certain amount of nervousness within companies about what they’re paying directors. More attention is being paid to outliers than in the past.”
Some try to make the case that board members do a lot of work. The National Association of Corporate Directors estimates board members commit at least 250 hours a year to their responsibilities. For anyone doing the math, that works out to just over six weeks of work per year at 40 hours per week, or just over $1,200 per hour.
That doesn’t make the board members exactly sympathetic.
Directors at software developer Roper Technologies Inc, who on average received nearly $910,000 in 2018, participate in at least 15 days of board meetings a year, according to the company’s proxy filing. That works out at over $60,000 per day.
Some companies flaunt how cheap they are, like Berkshire Hathaway paying Bill Gates just $3,300 to be on its board last year. But having billionaires act like they’re saving money doesn’t quite pull the sympathy strings, either.
All-in-all, it’s great work if you can get it, but it’s hard to get in the door. Typically, you have to be a CEO somewhere else, first. It’s almost like a club, where few are asked to join.