Setting appropriate remuneration for a director or a chairman
of a company is complex, Institute of Directors chief William
It involves the consideration of many factors including
turnover, asset value, complexity and risk.
Dr Whittaker this week released a Directors Fees Report.
The median fee for a non-executive director remained static
during 2012 at $36,000, while the median fee for a
non-executive chairman increased by 2.4% to $50,000.
''This survey highlights a sense of cautiousness in the
market in regards to remuneration. Organisations are
conscious of the need for transparency and accountability in
the current environment and are taking a very conservative
approach to fee increases.''
There was a clear relationship between the type of
organisation and the remuneration of directors, he said.
The average salary for a private company director was two and
a-half times that of a not-for-profit director, Dr Whittaker
That had implications for the average remuneration for women
Women were highly represented on not-for-profit boards (42%)
and underrepresented on private company boards (13%). That
directly contributed to the difference between the median
remuneration for women and men - $25,000 versus $38,000.
The survey revealed a relatively conservative approach to
both non-executive chairman and director fee remuneration.
Una Diver, a consulting director with dsd Consulting, said
the conservative approach mirrored what she was seeing in
remuneration for employees.
There was a trend towards relatively small budgets, in the
order of 3% a year, and a move to managing budgets through
focusing on rewarding high-performing employees.
''Our observation of trends in the New Zealand and Australian
markets suggests boards are sharply focused on the management
of risk within their organisation.''
Within remuneration practices, that was playing out in areas
as diverse as changes to performance management systems, the
inclusion of risk-related measures in variable pay design and
the inclusion of risk management-related roles within the
executive teams, Ms Diver said.
The survey covered 1550 directorships and 991 organisations
throughout New Zealand.