How Much Should I Pay My Directors In 2020?

When was the last time you analyzed how much you should pay your board members? How do you know if you are paying too much or not enough? In this article we examine the results of our most recent research that highlights how much board members should receive in compensation.


Business size, industry, structure, complexity, the number of yearly meetings are just a number of variables you have to consider when setting your board remuneration programs. Private companies tend to struggle with board compensation because it is difficult to find accurate benchmarks for director pay.


Lodestone Global recently published their 9th Annual 2020 Private Company Board Compensation Survey. The survey included 375 companies across 33 different industries and 38 countries to analyze current board practices and compensation around the world.

  • Median total compensation was $43,500, ~4.8% higher than the $41,500 reported last year. The 4.8% increase (+4.5% in 2018) is the result of a 5.5% increase domestically and a 3.6% increase internationally. Technology firms saw the most growth this year, paying their directors +10% more than in 2018.

  • Median revenue of the survey was $100m and the median number of employees was 250.

  • Boards continue to have a strong impact on company performance. 94% of companies reported increased revenues and 92% reported increased EBITDA. Since the respondent joined the board, companies reported an average revenue increase of ~50%. 53% of the participants categorized their boards as “Indispensable” or “Very Effective” at driving corporate strategy. These results support the notion that a board, particularly with the right directors, can be essential to achieving corporate goals and improving profitability.

  • Similar to last year, 21% (22% in 2018) of respondents reported using equity as part of their compensation schemes. These schemes tended to target a specific value of the company or shares outstanding. For the fourth year in a row, total compensation for these schemes were paid roughly half cash and half equity.

Historical Compensation Data

*Note: all figures are in USD, the data represents median values and assumes 4 in-person and 2 teleconference meetings.

2020 Private Company Board Compensation Survey

As you can see from the chart, directors earned a $31k retainer, $2,750 per meeting and $750 per formal teleconference. We have seen a steady increase in director pay since 2013. For the second year in a row, the growth in total compensation was primarily driven by U.S. companies, particularly $50-$500m. Domestic compensation grew another 6% year on year, after growing 10% last year. The U.S./International compensation spread has widened to $10,600 (US directors now earn 29% more than their international counterparts). This may reflect the strength of the U.S. markets, both in terms of employment and equity market valuations.


Comparing to the 2019 BDO 600 survey, private companies seem to be increasing their remuneration programs faster than their public company counterparts, albeit by a small margin (+5% vs. +3% ). Despite the increase, private company director retainers of similar size companies remain only ~44% of their public company director peers ($31,000 vs. ~$71,000). Similarly, given the large equity component, total compensation for public company directors ($170,000) dwarfs private company director pay of ~$43,500.


Year on Year Growth In Total Compensation By Industry

*Note: Survey respondents self-selected their industries, which we bucketed for comparison purposes to prior surveys. Includes Median retainer, per meeting, and excludes telecon. Total compensation assumes 4 in-person meetings.

2020 Private Company Board Compensation Survey

After a strong 2018, Financial Services and Utilities/Energy/Industrials firms slowed their growth in 2019. Technology firms rebounded to the top spot driving compensation growth after a weaker 2018. We saw broad based strength across many industries/sub-industries likely commensurate with where we are in the current economic cycle. The decline in manufacturing and retail also seems correlated to the economic weakness in those segments.

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