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Board of Director Compensation


Compensation for Board members has evolved over the years; however, the last few years have seen some of the most dramatic changes in how companies compensate their Boards.  The most significant changes have come about as the focus has shifted to excesses in Executive Compensation and the Board’s responsibility for controlling officer’s compensation when it is not justified by superior performance. 

Over the last decade, we have seen enactment of legislation such as Sarbanes Oxley (SOX), Dodd Frank Act, and various increases in SEC regulations, all of which have increased scrutiny and accountability on Boards; this in turn has made the recruitment and retention of Board members much more difficult.  With the advent of “Say on Pay”, the shareholders now have an open line by which to communicate to Boards, and are demanding much greater transparency in the decision-making process and justification of the Executive Compensation programs they approve. 

The recent legislation and emphasis on Board accountability has resulted in pressure on Board members, and correspondingly has resulted in significant changes to Board compensation.  Some of the more prevalent trends are increases in retainers, special retainers for Lead Directors, and Committee Chairs, elimination of separate meeting fees, equity grants tied to specific values, stock ownership requirements, and elimination of benefits.  Board Governance including annual performance audits, limitation on numbers of Boards, Board member nomination guidance, etc.

Compensation Resources, Inc. (CRI) works with the Boards of publicly traded organizations, privately-held businesses, and not-for-profit entities, on a variety of Executive and Board compensation issues.  We provide thoughtful, independent counsel to ensure that today’s solutions do not become tomorrow’s problems.  Among the Board services we offer, as the following:

  • Compensation Committee consulting
    • Committee Charter development
    • Strategic Compensation Philosophy development
    • Independent Review of Management Compensation Proposals
    • Board of Director Compensation Plan review and design 
    • Pay Advisory services
    • Education and training services
  • Overall Executive Compensation Plan Audits
  • Executive Officer Pay (Base Pay, Bonus, Perks, Equity) Assessment
  • Stock Option & Equity Strategies
  • Executive Stock Ownership and Retention Strategies
  • Total Reward Strategies
  • Market Pricing and Competitive Salary Benchmarking
  • Short-Term and Long-Term Incentive design
  • Change of Control, Severance and Executive Contracts
  • Executive Performance Review policies and processes
  • For our Not-for-Profit clients: Intermediate Sanctions - Competitive Market Analysis

Please do not hesitate to contact Paul Dorf at (877) 934-0505 x 111 or Harry Schum at (877) 934-0505 x 170 to discuss your company's issues, and how CRI can assist.




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This information is not intended for use without professional advice.

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