Most directors would agree that serving on a board is a very rewarding experience with personal, financial and professional advantages.
“Though the most obvious rewards for board service may seem to be professional or financial, many directors find the personal rewards the most gratifying”
Directors are usually monetarily rewarded with a combination of cash and stock. Cash payments include an annual retainer and a set payment per meeting, as well as reimbursement for any expenses incurred. Stock payments are usually given with an initial grant of stock or options, as well as additional stock for each year served on the board. It is also possible that directors may gain stock option grants from the sale or merger of the company. Approximately 75% of all companies pay directors a per-meeting fee. These payments may range anywhere from $500 to $5000 per meeting. Retainer fees depend on the company. Small and midcap companies award very generous retainer packages, though Fortune 1000 companies often pay considerably larger annual retainer fees, as well as additional committee chairmanship fees. According to the executive compensation consulting firm FW Cook, the average annual compensation, including the retainer, stock options, and meeting fees, for directors of small and midcap companies is $175,834.
If the company, that you are serving, has a strong management team, board membership will benefit your reputation in the business world. It is a compliment that a company is paying for your input and service.
Boards are generally comprised of individuals from very diverse and accomplished backgrounds who may provide insight for the company’s future. You will have the opportunity to learn from the exposure to others’ expertise in their respective fields and industries.
