Corporate boards of directors face a more acute set of challenges in setting their compensation than they have in recent years. Until recently, a primary focus was the risk of shareholder litigation challenging allegedly excessive director compensation. That concern has receded as many companies have taken steps to mitigate the risk of lawsuits.
But now boards need to navigate two conflicting pressures. On the one hand, most boards may find it inappropriate to increase their compensation during the pandemic. On the other, there is pressure to think differently about (and in some cases increase) director compensation. Directors’ responsibilities and workload have substantially increased, and boards seek to attract a new breed of candidates with specialized skills and diverse backgrounds.
This new report, from The Conference Board, Semler Brossy and ESGAUGE, reviews trends and developments in board compensation at U.S. public companies in the S&P 500 and Russell 3000.