Board Director Pay Hits Record $251,000 for 250 Hours
Pay for directors at Standard & Poor’s 500 Index (SPX) companies rose to a record average…
Georgia (May 30, 2013) — “You have to really justify why one director is getting a high multiple of other directors, in particular,” said Paul Lapides, director of the Corporate Governance Center at Georgia’s Kennesaw State University. “It’s great when you look in the mirror, but it’s not great in the boardroom. Everybody only gets one vote.”
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Pay for directors at Standard & Poor’s 500 Index (SPX) companies rose to a record average of $251,000 last year, the sixth straight year of increased compensation since federal rules began requiring disclosure.
Boards have boosted pay for their members a total of 15 percent since 2007, data compiled by Bloomberg show. Fidelity National Information Services Inc. (FIS) topped the list after handing out a $9.5 million retention bonus. News Corp. (NWSA) and Costco Wholesale Corp. (COST), which awarded some directors more than $1 million in consulting fees, came in second and third…
Randy Belote, a spokesman for Northrop Grumman, had no comment beyond the proxy. Eric Kinneberg, a Freeport spokesman, declined to comment. Kim Snider, vice president of marketing at Fidelity National, didn’t return e-mails or phone calls seeking comment; neither did the office of Costco’s chief financial officer.
At New York-based News Corp., Joel Klein received $4.5 million in cash and stock for his duties as an executive vice president and as CEO of the education unit. Arthur Siskind was awarded $5.2 million, including cash and stock awards, for his job as a senior adviser to CEO and Chairman Rupert Murdoch. Neither Klein nor Siskind got any additional pay for being a director. Nathaniel Brown, a spokesman, said the company had no comment beyond its proxy statement on the pay.
Even when the pay is for activities outside the boardroom, the concern is that the compensation will influence votes around the table, said Lapides, who is on the board of Sun Communities Inc. (SUI), where he was paid $143,601 last year. Directors with ties to the company can skew decisions in favor of the management, who is already represented on the board by the chief executive, he said.
“When you have more than two conflicted people, it’s amazing how the discussion of those three can bias the discussion of everyone else,” Lapides said.
At boards such as Salesforce.com Inc. (CRM), with average compensation of $690,053, Oracle Corp. (ORCL), with $615,866, and Occidental Petroleum Corp., with $540,047, most directors were well-paid compared to peers, according to the proxy data…..
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A leader in innovative teaching and learning, Kennesaw State University offers undergraduate, graduate and doctoral degrees to its nearly 43,000 students. With 11 colleges on two metro Atlanta campuses, Kennesaw State is a member of the University System of Georgia. The university’s vibrant campus culture, diverse population, strong global ties and entrepreneurial spirit draw students from throughout the country and the world. Kennesaw State is a Carnegie-designated doctoral research institution (R2), placing it among an elite group of only 6 percent of U.S. colleges and universities with an R1 or R2 status. For more information, visit kennesaw.edu.