Committee Chair Retainers On the Rise

Committee chair retainers jumped another 14% in 2023, following a 17% increase in 2022, according to a new WTW study. Many companies left director pay alone during the pandemic years, but are now back on track with benchmarking competitive pay practices – and committee chairs are busier than ever.

By the numbers. 62% of companies disclosed a change to their director pay program in 2023 (up from 55% last year). Overall director pay increased by 2% to a median of $305,000, with a split of 60/40 equity to cash. 42% increased equity grant values while 28% increased the cash retainer.

• Committee Chair Retainers. While the median cash retainer remained flat at $100,000, the extra retainer for committee chairs rose 14% from $17,500 to $20,000. This drove overall cash compensation to increase by 5%.
  
  
  • Median compensation committee chair retainer is now $25,000 while the audit chair is $30,000.
    
    
• Equity awards. The median value of equity grants increased 3% to $185,000 from $180,000.
  
  
  • 67% of companies use restricted stock or RSUs and nearly 70% offer cliff vesting after a one-year period. Stock option usage remains low at 8%.
    
    
• Board structure. 58% now separate the roles of CEO and Chairman of the board (the Chair is usually, but not always, a non-executive) while 63% have a lead director.
  
  
  • 65% of companies have a mandatory retirement age (median of 75) while 9% now have term limits (up slightly from previous years).

The full report is worth a look for its detail on director stock ownership guidelines and miscellaneous perks.