Trends in Compensation: Committee Chairs & Lead Directors

Episode Summary

Compensation trends for lead directors and committee chairs have been interesting to follow in the years after Sarbanes-Oxley. Audit committee chairs were the first to be rewarded with higher pay; compensation committee chairs quickly followed suit as issues like Say on Pay came to the forefront. Yet, we still see a significant gap in pay for lead directors and Nom/Gov committee chairs.

In this episode, Meridian Compensation PartnersBob Romanchek returns to discuss director compensation and pinpoint why certain board and committee chair retainers have advanced so quickly while others have not.

“It’s my strong opinion that many lead directors are undercompensated,” explained Romanchek, citing as much as a $170,000 difference between lead directors and non-executive or independent chairs. “I think that’s now beginning to be understood.”

…folks are figuring out that [the lead director] is a valuable position that can really do some very good independent things with the board. So that’s what’s happened: duties and responsibilities are piling on for the lead director and, with that, they’re acting like an independent chair.
— Bob Romanchek, Partner, Meridian Compensation Partners

Nom/gov committee chairs have seen a similar lag in pay compared to their audit and compensation committee counterparts. Romanchek reviews recent pay data for each board leadership position. He also wages his predictions on how these pay trends will continue to evolve over the next few years.