You can keep your stock options, corporate board members are saying. We'll take cash, please.

That's the conclusion of the latest Towers Watson report on corporate director compensation. The study took a look at nearly 500 proxies filed by public companies in 2011 and in 2012, and noticed that overall director compensation grew less in 2012 (3 percent) than in 2011 (5 percent).

The study also found that stock-based compensation was static year-to-year, while cash compensation increased by 8 percent in 2012 over 2011.

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The Towers Watson study also reported:

  • Total direct compensation for directors increased from $220,000 in 2011 to $227,000, a 3 percent bump.
  • The median value of cash compensation jumped to $100,000.
  • Compensation from annual and recurring stock awards remained virtually unchanged last year at $125,000.
  • The annual cash board retainer increased by 7 percent from the median in 2012, rising to an all-time high of $80,000.
  • Per-meeting fees for board meetings dropped from 32 percent to 28 percent.
  • The median committee member cash retainer rose from $7,500 to $8,000.
  • The average pay mix for Fortune 500 directors remains 45 percent cash, and 55 percent equity.

"Cash retainers are playing a larger role in the compensation mix for outside directors as the majority of companies have now eliminated meeting fees, reflecting the evolution of director roles to 24/7 commitments," said Doug Friske, global head of executive compensation consulting at Towers Watson. "While director pay increases in the early years of this decade were primarily driven by rising equity values, last year's increase was fueled by growth in cash compensation."

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Dan Cook

Dan Cook is a journalist and communications consultant based in Portland, OR. During his journalism career he has been a reporter and editor for a variety of media companies, including American Lawyer Media, BusinessWeek, Newhouse Newspapers, Knight-Ridder, Time Inc., and Reuters. He specializes in health care and insurance related coverage for BenefitsPRO.