Trends in U.S. Director Compensation

Sullivan & Cromwell LLP - July 28, 2020

Over the last 10 years, average U.S. public company director compensation has increased steadily, in part due to changes in board composition and governance that have increased the number and significance of board leadership positions held by non-executive directors. Over the same period, the average number of hours of work performed by directors has also increased, while the average number of board meetings and size of boards have remained stable. Future director compensation may be influenced by many variables, including the effects of the COVID-19 pandemic and dynamic regulatory change in certain industries. So when setting director pay, companies should remain flexible. While peer company benchmarking can be informative, no single approach to director compensation works for every company.