14. Director Compensation

The prevailing views concerning board compensation have been
changing since the mid-1990s and continue to change today. This has
led to a corresponding change in how these programs have been
structured. This chapter identifies and discusses these change areas,
including a decline in the use of many benefit and perquisite
programs, and a surge in the amount and use of stock and stock
options in board compensation packages.

The authors begin by providing a road map for analyzing and
designing director compensation plans. Inside (employee) directors
typically do not receive additional compensation for their board
duties, and so the programs covered here generally apply only to the
company’s outside (non-employee) directors. The role of a director
differs from that of an executive and, therefore, while the compensation
elements might be similar, the mix and structure of a director
compensation program will most likely differ noticeably from the
company’s executive compensation program.
After setting the internal and external context for the board and
reviewing a board’s key duties and responsibilities, the most common
elements of the board compensation package are identified and
discussed.

The authors then focus their discussion on several interesting
special topics related to director compensation including how to
compensate a director who conducts a special assignment for the
company, how to compensate a non-CEO board chair and/or lead
director, and how to handle board compensation at a pre-IPO
company. Lastly, the authors make a series of forecasts for where
director compensation is likely to head in the years ahead, and
provide a number of useful practice aids for the reader’s use. —Editors



In stock and shipping next business day. U.S. residents can order the
542 page casebound book, including templates and sample documents on CD,
direct from the Publisher for $99.95. The book can also be ordered through any
retail store by the title Executive Compensation: The Professional's Guide to Current
Issues & Practices or by its ISBN number: 1-893190-25-0.