The global pandemic has disrupted and amplified the role of boards of directors across industries. The traditional roles of strategic planning and general risk management have already evolved, and the disruption of COVID-19 has amplified the role of boards of directors and the hours they have invested.  

While director pay levels have increased over time, the trend toward fixed-fee retainers and away from per-meeting fees has limited the ability of organizations to reimburse board members for the countless hours they have invested to support the organization in response to this crisis. While the number of meetings and directors’ workloads have increased, scrutiny is intensifying around compensation practices for boards and the executives whose pay they monitor. A deeper understanding of board compensation trends has never been more critical to attract, retain and appropriately compensate talented board members who provide the oversight necessary for companies to succeed in an increasingly dynamic and complex marketplace.

The BDO 600 Study examines board compensation practices of 600 middle market public companies and tracks trends in director compensation within eight industry segments: energy, financial services–banking, financial services–nonbanking, healthcare, manufacturing, real estate, retail and technology.  

Graphic of YOY pay increases

The BDO 600 is a two-part study examining Board of Director compensation and CEO and CFO compensation.

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Board Compensation in A COVID-19 Climate

2020 has been a time of exceptional challenges and changes. Our report focuses on pay levels as reported in the 2020 proxies, which reflect a pre-COVID-19 world. While pay increased just over 3% in 2019, director compensation has not avoided the impact of the pandemic. Research of the BDO 600 companies' 8K SEC filings between March and June 2020 found that 14% of organizations reduced board member pay levels by 50% for an average of six months. The table below summarizes the pay reduction actions for Board members.



One might argue that there should have been more and deeper cuts. However, boards face an ever-changing array of complex challenges:
  • Changing regulations, new technology, supply chain disruptions, risk impacts and globalization—all require directors with experience and foresight.
  • Institutional investors are flexing their muscles to influence boards. Recent studies suggest that institutional investors held close to 70% of the ownership of public companies with a voting participation rate of 91%.
  • Activists continue to use the boardroom as a way to influence the direction of companies.
As such, corporate boards of directors have been under heightened pressure, even before the pandemic. While pay has increased, it is not clear that the increase has kept pace with the additional challenges required for boards of directors to address.

Board members’ retainers and fees increased by an annualized rate of 3.3% since 2015, and total compensation has increased by 3.4% on an annualized basis.

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Thought Leadership: Insights from Acting Board Members

To accompany the data in the BDO 600 Study, below are thought leadership articles and insights directly from the boardroom.

Insights From a Board Director:
LoriAnn Lowery-Biggers, who has deep expertise serving on various corporate boards of directors and chairing board committees, reflects on events that may shape future director pay and practices and discusses compensation, transparency, board structure, diversity of skills, directors’ time requirements and risks.

Being Board Ready:
Betsy Atkins, a deeply experienced corporate executive and highly accomplished board member, shares her thoughts, experiences and advice for being a proactive director during the global pandemic and this challenging time.

BDO in the Boardroom:
Explore our podcast series for boards of directors and those charged with companies’ governance. Each episode features a topical discussion with board peers and subject-matter experts on a variety of trending and timeless boardroom issues.

BDO Board Pulse Survey – Fall 2020:
Released in September, the survey examines 280 corporate directors’ responses to questions from how they are addressing the impact of the global pandemic to the importance of diversity and how their strategies have changed for the way forward.

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Board Compensation Practices for Mid-Market Companies

Join us on December 7th from 11:00 am to 12:00 pm ET for a CPE webinar to discuss board of director compensation topics and trends.

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Questions? Get in touch.