[print version]
How much are privately held companies paying their outside directors in fees? How frequently are these updated or revised?
Anonymous
Response:
I recently attended an NACD director certification course where 2006 median total director compensation was discussed. The information below is disaggregated by company size and compensation type.
Revenues Total Comp (fee, meetings, chair, options) Option %
$50-$500 million $74,332 26
$500 million-$1 billion $110,500 26
$1billion-$2.5 billion $132,760 29
$2.5 billion-$10 billion $157,165 21
>$10 billion $204,975 16
Gail F. Lieberman (liebermang@earthlink.net )
Response:
We have three outside directors on our board. They meet quarterly for about two hours, with one hour of preparation for the meeting.
We pay each outside director $750 for that service. My sense is that we are on the low side.
Jerry Plappert (jp@fkinc.com )
Response:
We have been advised that the appropriate rate should be determined by calculating the hourly rate of your CEO and paying the directors that rate for the estimated number of hours of the board meetings.
Jay Cei (CEI@ULBRICH.com )
Response:
I would be happy to share what we pay our directors, but it may not be comparable to that of the person posing the question, due to differences in size and complexity.
Bob Wilson (wilsonrjw@prodigy.net
Response:
We have targeted 0.5% of company stock in the form of options to our directors.
We grant our directors options annually to get them to this level over a four-year period.
We also make special grants for efforts over and above their basic responsibilities, such as recruiting or serving as interim management.
Bob McCarthy (bmccarthy@tripwire.com
Response:
We pay the outside members of our advisory board $1,500 per meeting. We have no formal policy on how frequently to review their compensation.
None of our outsiders are official board members, so they do not have the same level of risk that official board members have. They give advice, but do not have a formal vote.
Jim Morgan (jim.morgan@tsiholding.com
Response:
Fees will vary, based upon the size and stage of a privately held company.
As a Silicon Valley start-up that is in the pre-product stage, we just finished gathering the data and making a successful offer to a new outside board member. Generally, there is no monthly stipend, but we grant stock options ranging from .25% to .50% of the fully diluted shares, and we pay travel expenses to the meetings. I hope this is helpful.
Howie Brodsky (howie@achronix.com
Response:
We pay our outside directors an annual retainer of $5,000. Also, we pay $2,500 per semi-annual meeting, and we pay $300 for each additional conference call.
Anonymous
Response:
Our $35-million in revenues food manufacturer was just sold.
We paid our outside directors $1,000 per meeting attended (by phone or in person) and $500 per committee meeting. They also received $15,000 per year as a retainer, and the chairman received an additional $10,000.
Although this was somewhat excessive, in my opinion, all members of the board were significant investors, and no dividends were paid to shareholders (you can infer the issues here).
Anonymous
[print version]