Directors Roster: in affiliation with Spencer Stuart -- a quarterly record of new director appointments.

• Author: Porter, Martin D.
• Position: Spencer Stuart/Directors & Boards Directors Rosters

AN UPSHOT of Sarbanes-Oxley is the prospect that directors will need to receive bigger paychecks. After all, almost no one can argue with the assertion that their jobs have become much more demanding and time-consuming. In addition, there is worry that the pool of qualified board candidates will shrink. In such a difficult environment, good directors -- and prospective board members -- are becoming more highly valued.

In its 2002 analysis of S&P 500 company proxies, recruiting firm Spencer Stuart reports on the trend toward rising board compensation. One finding: In 1992 only 6% of boards paid retainers in excess of $50,000, whereas 26% of boards currently do.

How do executives joining boards during this reporting period of the Directors Roster feel? Surprisingly, not all agree that companies will have to raise director pay. But, at the very least, three of our respondents recognize that some of their board colleagues, in particular those who brave the task of being audit committee chair, deserve more pay.

Joining the board of Cooper Tire & Rubber Co. is John J. Holland, chairman and CEO of Butler Manufacturing Co. Holland says he has read numerous reports published by compensation experts that advocate increasing director pay by 20% to 40%. "You can make the economic argument, 'We're in tough times right now, so why are we raising director pay?"' he says, but concedes, "It's not a matter of if, but when." He agrees the case can be made for increasing fees for the audit committee chair, and will likely do so at Butler.

"When we first assessed compensation for the various chairs, we thought there should be no differentiation," he says. "But now that I look at the additional burdens they face in carrying out their responsibilities, you have to give a nod to them and their committee members."

Margaret Foran, vice president of corporate governance and corporate secretary at Pfizer Inc., joins the board of MONY Group. "I've always been one of those pay-for-performance people," she says. "Directors who are not working shouldn't be getting paid."

With MONY Group being her first corporate directorship, Foran admits to being not that familiar with the board compensation terrain outside of Pfizer (where board compensation last year included an annual cash retainer of $26,000, and a board meeting fee of $1,500). She has heard from other companies...