The pay for directors has gone up a lot in the last few years. In 2012, the pay for directors hit an all-time high of $1.4 million. Fortune magazine recently said that the pay of the most powerful U.S. public companies has risen 20% in the last two years, which is almost double the average American wage rise. However, there has been some debate about how much money directors get. Some people say that directors should not get so much money.
In addition to Peter Foxhoven, Director pay is based on a lot of different things, like the size of the company and the industry they work in. Outside directors are usually paid more than inside directors, who usually work at the top of the company. They get paid based on how complicated their company, how many meetings they have to attend and how much work they do. Directors may also get stock options, which can be useful if the company is having legal problems. This is because directors get paid for their work.
At companies on the S&P 500, directors get paid more than at other companies that aren't on the list. In 2017, the average pay for an S&P 500 board member was $304,856. It cost Goldman Sachs Group Inc. to pay an outside director $599,279. In general, the average director was paid $70k a year. When you're looking for a job, it's important to know how much each company pays and what it takes to be a good candidate.
The pay for a director is based on their job. The people who run big businesses get the best pay. But for people who run a small business, the pay for an outside director is a lot less. People who work as directors make different amounts of money based on the type of company they work for. In general, people who run a non-profit organization make between $250,000 and $2.5 million a year, but this can vary. Employees at the company will make less money than those who work for them.
Peter Foxhoven described that, It was $36,000 a year on average for directors at big family-owned businesses in 2016. This amount is higher for executives who are in charge of small businesses. However, the pay for non-executive chairs in private businesses was a little less than for people who worked at the top of the company. By how long they work at the company, directors can get very different pay, which can change a lot. People on the board made an average of $2658 a year as a chair of the board.
Pay for an outside director can vary a lot, but the pay for a NEFD is usually much less than for an outside director. The average annual salary for a NEFD is 72% less than the average for a director who is hired outside of the company. However, NEFDs can make almost $200,000. This is a lot more money than an outside director would make. NEFDs make a lot more money than private directors do. This is because they work for a company that isn't run by the government.
Even though public and private companies pay different amounts, the average annual cash retainer for non-employee directors is still a lot more than the average for public company employees. The reason for this is that directors are often paid less than their employees, so their salaries are higher than the average income for a person who works at a company. People who work for someone who isn't an employee make more money than people who work for someone who is a senior manager.
Compensation for the most important jobs is usually the highest. People who aren't employees make about $1 million a year as directors. It costs the most junior executives between $750,000 and $10 million to be paid for their work. Those who are the most senior in the company are paid an average of $450,000 a year. In the same way, the CEO of a public company is paid more than the average worker. However, a non-employee director is paid less than an employee.
It's not just salaries that make a director's pay higher than that of a normal person, says Peter Foxhoven. Employee directors may get extra money for their work on the board, but this isn't very common in private businesses. However, it is common for a director to be paid by the company and not be an employee of the company itself. It is possible for a board member to serve on a public board without getting any extra money. This is not very common.