They don’t get nearly as much attention as CEOs, but board directors are often crucial to the functioning of a company — and, whether they’re essential leaders or unproductive chair-fillers, directors also receive hefty paychecks for the hours they spend guiding companies.
The median retainer for a director at an S&P 500 company reached $240,000 last year, up 4.3 percent from 2014, according to a recent report from Equilar. Non-executive board chairs and lead directors earned even more — $396,500 and $275,000, respectively — but the year-over-year gains were smaller.
Annual retainers include cash, options, stock awards and restricted stock units that vest over time, according to Equilar’s analysis. Executive search firm Spencer Stuart says that S&P 500 companies have an average of 10.8 board members. Those directors spend between 250 and 300 hours a year on their duties, according to estimates by executive search firm Korn/Ferry International. The board’s compensation committee—as required by the New York Stock Exchange—determines the compensation for board members.
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The technology, basic materials and health care sectors offered the largest median annual retainers for directors. The utilities sector offered the lowest median, but that figure, now $205,000, has increased by a third since 2011, the most of eight sectors Equilar tracked.
Nearly all companies include cash as part of their board members’ compensation packages, while three in five offer restricted stock units, which have become more common in the last five years as companies focus on long-term recruitment and retention of board members. A little over a third of S&P 500 companies provide stock and 13 percent give options to their directors.
Compensation for non-employee directors on the highest-paid boards totaled more than $5 million in 2015, with the top board at Regeneron Pharmaceuticals Inc. paying nearly $18.6 million in total to its board members. In some cases, one individual director received a huge sum, while the median total pay remained low.
For example, the highest-paid director at an S&P 500 company last year was Donald James, who received more than $8 million to serve as non-executive chairman of the board of Vulcan Materials Co. His pay represented about two-thirds of the total compensation to the board. The median pay for the rest of the board was $274,601 per director.
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James served only one year as a non-employee chairman. Before that, he was both chairman and CEO of the company since 1997. James retired at the end of last year.
Here are the highest-paid boards in the S&P 500.
20. Wells Fargo & Co.
No. 14 in the S&P 500 by market capitalization (as of Oct. 14)
Total board compensation: $5,111,575
Median director pay: $346,027
19. Comcast Corp.
No. 22 in the S&P 500 by market capitalization
Total board compensation: $5,119,969
Median director pay: $446,479
18. Celgene Corp.
No. 52 in the S&P 500 by market capitalization
Board compensation: $5,317,230
Median director pay: $575,794
17. Salesforce.com
No. 94 in the S&P 500 by market capitalization
Total board compensation: $5,405,437
Median director pay: $599,493
16. Boston Properties Inc.
No. 229 in the S&P 500 by market capitalization
Total board compensation: $5,552,490
Median director pay: $207,000
15. Reynolds American Inc.
No. 114 in the S&P 500 by market capitalization
Total board compensation: $5,636,392
Median director pay: 447,843
14. General Electric Co.
No. 8 in the S&P 500 by market capitalization
Total board compensation: $5,722,804
Median director pay: $299,561
13. Freeport-McMoRan Inc.
No. 323 in the S&P 500 by market capitalization
Total board compensation: $5,758,734
Median director pay: $414,209
12. Philip Morris International Inc.
No. 27 in the S&P 500 by market capitalization
Total board compensation: $5,823,492
Median director pay: $350,000
11. Oracle Corp.
No. 35 in the S&P 500 by market capitalization
Total board compensation: $6,240,529
Median director pay: 588,486
10. Goldman Sachs Group Inc.
No. 65 in the S&P 500 by market capitalization
Total board compensation: $6,275,470
Median director pay: 595,104
9. PVH Corp.
No. 403 in the S&P 500 by market capitalization
Total board compensation: $6,624,750
Median director pay: $225,036
8. Roper Technologies Inc.
No. 250 in the S&P 500 by market capitalization
Total board compensation: $6,767,760
Median director pay: $757,640
7. News Corp.
No. 479 in the S&P 500 by market capitalization
Total board compensation: $6,839,468
Median director pay: $237,250
6. Medtronic PLC
No. 34 in the S&P 500 by market capitalization
Total board compensation: $7,095,429
Median director pay: $617,488
5. Allergan PLC
No. 45 in the S&P 500 by market capitalization
Total board compensation: $7,983,781
Median director pay: $554,718
4. Twenty-First Century Fox Inc.
No. 165 in the S&P 500 by market capitalization
Total board compensation: $10,123,538
Median director pay: $312,000
3. Vulcan Materials Co.
No. 290 in the S&P 500 by market capitalization
Total board compensation: $11,054,881
Median director pay: 274,601
2. Vertex Pharmaceuticals Inc.
No. 227 in the S&P 500 by market capitalization
Total board compensation: $11,914,994
Median director pay: $1,231,416
1. Regeneron Pharmaceuticals Inc.
No. 159 in the S&P 500 by market capitalization
Total board compensation: $18,561,936
Median director pay: $2,061,604
