Board members and non-executive directors' pay varies substantially. A lot depends on the sector, the board member's weight and expertise, the country in which the board sits, and the organization's earnings - the larger the business, the higher the pay for directors.
According to Spencer Stuart, non-executive director fees in the UK range from an average of £43,200 in an FTSE Small Cap to almost £83,000 at the top end of the FTSE 100. According to the recruitment business Board Appointments, the average fee for a non-executive director in the UK is £70,000.
In the United Kingdom, a part-time chairperson might earn £400,000 in 2019. Chairman of FTSE 100 businesses can earn up to £425,000 per year.
Members of the board are getting younger
The typical image of a boardroom is a stuffy old space full of men who are pallid and stale. This is no longer true. Boards are eager to bring on younger, more diverse members who will represent society.
According to KPMG's benchmark report, the average age of a firm board director in Ireland is 57. A male director's average age was 59, and a female director's average age was 51, and the average salary of firm directors in 2020 was €40,000 to €60,000. Chairpersons were paid an average of €166,563.
Board member compensation in the United States can be high
According to a global survey conducted by Lodestone Global, the median salary for members of private firm boards of directors in the United States in 2020 was $42,750.
Yet, the United States is a country of heavy hitters, and big boards pay extremely well. According to executive compensation company Veritas, board member salaries can easily range from $300,000 to $500,000 per year.
What kind of people end up on boards?
The greater your abilities and capabilities, the better. Many firms have recently begun to seek more racial and gender diversity on their boards.
An effective board member possesses the following characteristics:
Familiarity with high-level government positions
Roles as a manager and leader in specific industries
Starting and running a profitable business
Participating on other boards
Digital transformation skills are in high demand, as are cybersecurity expertise and experience.
A high-paying board of directors
You only need to look at the world of megacorps to understand how far director pay may go. Apple's non-executive directors, for example, each receive around $250,000 in restricted stock units per year. Non-executive directors are also paid a $100,000 annual cash retainer.
Apple's board chair earns an extra $200,000; the audit committee chair earns an extra $35,000; the compensation committee chair earns an extra $30,000; and the nominating committee chair earns an extra $25,000.
Non-executive directors also receive every new Apple product for free on request and receive a discount on additional purchases. If you can acquire it, great work.
The pay of board members varies substantially
Many factors influence how much board members are paid. If you want to join a board, you should complete the following:
Get certification: Certification ensures that you understand how a boardroom operates as well as the roles and obligations of a business director.
Network: You will not find board jobs unless you look for them and let people know you are interested.
Find a board job that interests you: I don't think serving on a board is a simple way to get some money. It is a tough position, so make sure you are passionate about the industries you want to work in.
Our Directors’ Institute- World council of Directors can help you accelerate your board journey by training you on your roles and responsibilities to be carried out in an efficient manner helping you to make a significant contribution to the board and raise corporate governance standards within the organization.
Our ESG Expert certification will help you to amplify your understanding of corporate governance in a detailed manner paving a way for you to become a globally recognized ESG leader.