The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Fri, 11 Jun 2021 14:18:26 +0000 en-US hourly 1 https://wordpress.org/?v=5.7.2 The Search for Meaningful Director Compensation Limits https://corpgov.law.harvard.edu/2018/09/13/the-search-for-meaningful-director-compensation-limits/ https://corpgov.law.harvard.edu/2018/09/13/the-search-for-meaningful-director-compensation-limits/#respond Thu, 13 Sep 2018 13:32:22 +0000 https://corpgov.law.harvard.edu/?p=110904?d=20180913093222EDT Posted by Rebecca Burton and Michael Bowie, Willis Towers Watson, on Thursday, September 13, 2018
Editor's Note: Rebecca Burton is a lead associate and Michael Bowie is a senior associate at Willis Towers Watson. This post is based on a Willis Towers Watson memorandum by Ms. Burton and Mr. Bowie. Related research from the Program on Corporate Governance includes The Growth of Executive Pay by Lucian Bebchuk and Yaniv Grinstein and Paying for Long-Term Performance by Lucian Bebchuk and Jesse Fried (discussed on the Forum here).

Total pay for non-employee directors continues to grow at a modest but steady rate, driven by increases to the annual cash retainer and the value of annual equity grants. Not all aspects of director compensation and corporate governance remain predictable, however. Annual compensation for directors continues to be a hot topic for shareholders and boards alike, precipitated by the ongoing attention to shareholder lawsuits that allege “excessive” pay for board members. This mutual interest has prompted boards to look for ways to mitigate exposure to lawsuits involving director pay programs; the most visible result is the swift action taken in adopting annual compensation limits specific to directors.

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