The annual compensation paid to board directors is generally composed of an annual cash retainer, board meeting fees, and stock options or stock grants. These stock options are generally equivalent in value to 20-25% of a director’s annual retainer. A standard compensation package might consist of a $93K cash retainer, $1.5K fee per board meeting and a stock grant of $22.5K. Averaging eight total board meetings per year this totals to $124.5K in annual compensation. This annual package and an average board tenure of 8.6 years would total to approximately $1 million annuity over the course of that tenure.
Board members may also receive further compensation for serving on multiple committees, serving as a committee chair, or participation in special projects. Typically, expenses and travel fees are also reimbursed separately from annual compensation.
These numbers will continue to grow as annual director renumeration has been steadily rising in recent years due to the complexity of board governance and regulation.