NEW YORK (Reuters) - Pay to directors serving on corporate boards is expected to rise as they assume more responsibilities such as dealing with environmental, social and governance (ESG) risks and the coronavirus pandemic, according to non-profit group The Conference Board.
Companies may have to offer members of their boards of directors one-time sign-on equity bonuses to recruit younger and more diverse candidates, according to a report on Wednesday about director compensation practices completed by The Conference Board, consulting firm Semler Brossy and data provider ESGAUGE.
Boards may also have to provide more educational and networking opportunities to directors, particularly those who are joining boards for the first time, the study stated.
The reason for offering higher pay and more perks is to help meet the demands of institutional investors who want to see a new generation of directors at the helm of companies, according to the report.
“Companies have shied away from perks in general, including for their directors,” said Matteo Tonello, managing director for ESG research at The Conference Board. “But as they think about ways to educate, and provide offerings, governance programs at universities, attendance at a conference, those might be the easiest to justify.”
The report noted that directors may also receive higher fees for their work on board committees or as the chair of a committee.
Reuters reported late last year that U.S. company directors now earn more than ever, with average non-executive compensation topping $300,000 for the first time, and 43 percent higher than it was 10 years ago.
Reporting by Jessica DiNapoli; Editing by Cynthia Osterman