Directors' fees freeze for many

Directors' fees have kept apace of inflation during each of the past three years, but two-thirds of organisations surveyed are considering a fee freeze during the coming year.

The 20th annual survey by StrategicPay, gleaned from 299 public and private sector boards and 1270 individuals, found directors' fees had increased an average 4.3% for each of the past three years, StrategicPay managing director John McGill said.

Forty-five organisations had indicated the average rate of increase to be applied at the next fee review would be 2.4%.

"However, of those who responded, two-thirds indicated they would be freezing fees for the coming 12 months," Mr McGill said in a statement yesterday.

During the past year, the issue of fees "went quiet" as organisations "wisely" decided it was not the time for a review, he said.

"The recession, combined with the negative publicity around companies such as Contact Energy, although that was in 2008, ensured many companies remained cautious regardless of their views as to current fee levels," Mr McGill said.

For the majority of organisations, their review factors were based mainly on company profit and market trends while 29% used the inflation level, or consumer price index, as a guide.

The highest fees were paid to non-executive chairmen in the manufacturing sector, triple those of the lowest paid, which were the fees paid to directors in local government.

In the large organisation data, those with turnover between $21 million and $500 million, non-executive chairman median remuneration was $64,650 and non-executive directors received $34,300; their respective increases during the past decade representing a 65% and 58% increase.