Criticise executive salaries all you like: company directors are enjoying higher pay because they face ever-increasing levels of accountability, says one consultancy.
The latest survey of directors’ fees undertaken by remuneration and performance consultants, Strategic Pay Ltd, shows the fees paid to directors have increased by 4.9 percent between 2009 and 2011.
Managing director John McGill said in the latest June year the median remuneration for a non-executive chairman was $62,606 and for a non-executive director, $35,000
Despite slow economic growth, directors were shouldering more responsibility and this was being reflected in their
remuneration, he said.
“But it’s definitely not a one-way street, as two-thirds of the 270 government and non-government organisations we surveyed indicated they would be freezing fees for the coming 12 months.
“Clearly many organisations are not in a position to be providing their directors with the fee increases they may feel they deserve.”
Excluding companies that gave no fee increases, the average increase awarded was 4.6 percent, with the median at 3.5 percent.
The survey, which has been running for the past 21 years, covers 270 public and private sector organisations with data on 1,233 individual directorships.
While there was often comment concerning either the grossness or inadequacy of fee levels, McGill said statistics showed steady increases over the past 10 years.
With high-profile accountability cases before the courts and
shareholders generally more vocal in their criticisms of business
performance, governance issues were a major concern for companies, he
“In this environment directors are understandably looking closely at the risks they face in addition to the demands being placed on them by a more demanding business climate.”
To earn their fees, directors attended an average of 9.2 meetings a year.
The majority of respondents used company profit and market trends to monitor fees with only a third of organisations using CPI movements.
While the database showed an upward trend in the number of women in chairperson roles and directorships, the numbers remain relatively small. Just one in 10 chairperson seats are held by women and less than 20 percent of directors were female.