Extra comp for the nonexecutive chair and lead director.

PositionBOARD PAY

Ed. Note: Compensating consultant Frederic W. Cook & Co. released its 2012 Director Compensation Report in October. The firm sampled 240 companies, selected to include those in the financial services, industrial, retail, and technology sectors, and encompassing large caps, mid caps and small caps. The data is drawn from the companies' SEC filings for the one-year period ending May 31, 2012. The following slice of data from the report focuses on compensation for nonexecutive chairmen and lead directors.

Company proxy statements are required to include a discussion of why a company chooses to have one executive serve as both the board chairman and CEO, or to have the board chairman and CEO as separate roles. The most prevalent practice is to have the CEO also serve as board chair, but this practice still does not represent the majority (44% of all companies in research sample). Thirty-one percent of companies have a nonexecutive chairman who has never served as CEO of the company; this is followed by 17% of companies who have an employee chairman in place. The least prevalent chairman structure is electing the former CEO of a company as a nonexecutive chair (8% of total companies).

There are 138 lead directors reported in our sample (58% of total companies). The majority of companies have a lead independent director when there is an executive chairman. If the nonexecutive chairman has never served as CEO of the company, there is typically no lead director. One exception is where the chairman is a majority shareholder and therefore not considered to be an independent director of the company.

Chairman of the board retainer

Compensation for the chairman of the board, paid in addition to regular board member service, can be in the form of cash or equity. Interestingly, companies in the retail sector provide the highest additional retainer for board chair service, followed by industrial, technology, and financial services companies. When segmented by size, mid and large-cap companies provide...

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