How Should Companies Compensate Board Members?

Amid today's heightened competition for directors, it's essential to create a comprehensive plan for paying them.

Every organization must consider how and when to compensate board members. For almost all public companies, the question is not whether to compensate board members, but how much to compensate them. For private companies, both questions might apply. As the conversation over board members’ role and expectations intensifies, public and private companies — and even nonprofits — face new board compensation challenges. Here are some factors to consider in making compensation decisions.

The role of independent board members has expanded and intensified over the last 20 years. Organizations have experienced unanticipated hardships, corporate/executive malfeasance, industry disruption, hostile takeovers, pressure from activist investors, increased regulatory compliance demands and, in some cases, outright financial failure and dissolution. Board members are in the crosshairs of targeted attacks. 

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About the Author(s)

Jena Abernathy

Jena E. Abernathy is senior client partner, CEO & executive search, and healthcare board services sector leader for Korn Ferry. 


Don Lowman

Don Lowman is a senior client partner and global leader of Korn Ferry’s total rewards business.


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