Board compensation is always a hot topic for directors, with outside director compensation, lead director compensation, equity grants, the actual value of outside director pay and instances where companies have been sued for excessive outside director pay all front-burner topics.

In the video above, Corporate Board Member recently sat down with Bob Romanchek, partner with Meridian Compensation Partners to talk about board compensation. Three key takeaways from the discussion:
  1. Vesting trends in board compensation. About 70 percent of companies have moved to one-year vesting, though a small but emerging trend is to have no vesting whatsoever, giving shares outright with holding requirements.
  2. The Investors Bancorp board compensation case in Delaware. Adding a shareholder-ratified overall annual pay limit for outside directors will become standard practice in the near future.
  3. Compensation guidance from proxy advisory firms. Many large organizations have interchanged the lead director duties with those of an independent outside director. It’s a matter of degree with duties and responsibilities and, therefore, with pay.