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RPT-SPECIAL REPORT-Director's Cut: Best-paid US corporate boards

(Repeating to update graphic)

* Little said about boards in executive pay debate

* Nabors directors paid more than most S&P 500 peers

* Board pay also high at Intuitive Surgical, Apple

By Steve Eder

NEW YORK, Dec 16 (Reuters) - Four times last year, Nabors Industries' NBR.N corporate board descended on the luxurious Fairmont Hamilton Princess Hotel in Bermuda for three days of round-the-clock meetings.

Nabors, a global oil and drilling company, paid its six non-executive directors well for their trouble.

They received an average of $420,000 for all of last year, according to a proxy filing with the U.S. Securities and Exchange Commission, which works out to more than $100,000 for the three-day stay in Bermuda.

That’s more than what nearly any other Standard & Poor’s 500 Company pays its board members.

In the debate over executive compensation that has taken center stage following the financial crisis, little has been said about corporate boards.

But a Reuters analysis of the 2009 Spencer Stuart Board Index, an annual report on boards by the executive search firm, shows that at some companies, being a corporate director is pretty good work if you can get it.

For a graphic showing the best-paid corporate boards please click on: here

Nabors doesn't even take first prize. According to the Spencer Stuart report, the best-paid directors are at Intuitive Surgical Ltd ISRG.O, a robotic health care equipment maker.

It paid its seven non-employee directors an average of $697,000 last year. That’s about $139,000 per director for each of the Sunnyvale, California-based company’s five meetings in 2008.

Not far behind Intuitive Surgical is Apple Inc AAPL.O, whose non-employee directors received $633,000, or $127,000 per meeting last year. The computer giant's board met five times in 2008.

Shares of both Intuitive Surgical and Apple have more than doubled in 2009. Both companies pay directors largely with stock options, which have become especially valuable in light of their recent performance.

“We are certainly comfortable with that, and shareholders are typically happy if returns are high,” said Ben Gong, a spokesman for Intuitive Surgical.

A spokeswoman for Apple declined to comment.


What sets Nabors apart is that it had a bad year. Based in Hamilton, Bermuda, the company owns and operates more than 500 land drilling rigs worldwide. The precipitous drop in oil prices last year battered the firm, whose share price has plummeted 60 percent since June 2008, to $20.94 from $49.77.

“Let’s face facts,” said Michelle Leder, the editor of, a corporate watchdog web site. “If you had a part-time job that was paying you $300,000, $400,000, $500,000 a year, and you didn’t have a lot of work to do, would you rock that boat? That’s just human nature.”

Leder, who spends her days examining regulatory filings, called Nabors one of the biggest offenders when it comes to executive compensation.

“They are perpetually bad,” she said.

(Watch Reuters Insider's interview with Leder at

Nabors doesn’t see a problem. Dennis Smith, a spokesman for the firm, defends the pay as well as the board’s decision to meet at the Fairmont, a resort that bills itself as an elegant tribute to Bermuda’s old world splendor.

“It’s not some leisurely boondoggle, that’s for damn sure,” he said.


“Up until probably a couple years ago director pay was probably not on the radar,” said Paul Hodgson, a compensation expert at independent research firm The Corporate Library.

“The thought was, ‘I’d rather have a well-compensated engaged director than... than one who didn’t want to put in the time for the company.”

Indeed, in 2008, many companies found their directors working overtime as the financial crisis unfolded.

Take Goldman Sachs Group Inc GS.N, which has faced withering criticism for setting aside more than $16 billion in 2009 for year-end bonuses.

Its board has not been assailed over its pay. Goldman directors received $298,000, on average, in 2008, but they participated in 16 meetings during an unusually busy year, for an average of $18,000 per meeting.

Morgan Stanley's MS.N board met even more -- 28 times, with directors paid an average of $312,000 for the year, or just $11,000 a meeting.

The average number of board meetings continues to increase, from 7.3 in 1999, to eight in 2004, and nine last year, according to the Spencer Stuart index. The report also found a small increase in board retainer fees, bumping the average to $76,000. At the same time, fewer boards are paying fees for each meeting.

The most highly paid directors tend to be in the energy and healthcare industries. Energy directors made on average $301,000 in 2008, while healthcare directors were paid $306,000. Overall, the average director of an S&P 500 company across all industries was $213,000.

Directors in the west and southwest of the United States were the highest paid, making 31 percent more than their counterparts in the southeast, the lowest compensated, according to the index.