Directors' Pay Shifts to Cash From Stock

A part-time job that pays well but doesn't keep you chained to a desk? It's hard to beat being a non-employee director of a Fortune 500 company.

While the workload may have increased over the past few years, so too has the pay. The median compensation for such directors was $173,640 last year, a healthy increase of 7.2 percent over 2006.

The information was compiled by Equilar, the executive and director compensation benchmarking company, which used data from 425 of the top companies. All but a tiny percentage of companies compensate their directors. About one-third use a combination of cash and stock.

Compensation included annual retainers and fees for attending meetings. Equilar, based in Redwood Shores, California, firm did not take into account other fees like additional payment for board leadership positions.

Even so, outside directors' pay rose from $162,000 in 2006. The highest increase came from cash retainers: the median cash payout increased by 20 percent, to $60,000 from $50,000.

And more companies paid in cash -- with the prevalence of companies providing rising to 95.1 percent in 2007 compared with 94.6 percent the year before.

Equity retainers also grew in value, although at a slower pace: 3.4 percent, to $103,389 from $100,000. Those retainers included fees paid in options, stock or stock units. Companies provided equity slightly more often -- up to 92.7 percent last year compared to 91.5 the year before.

The second biggest area of growth was meeting fees, which climbed 18.5 percent, to $16,000 last year from $13,500 the year before. However, companies choosing to provide such fees did so less often -- falling 5.4 percent to 52 percent last year.

by Elizabeth Olson