12 Sep 2013

Director fees steady but chair fees up

8:01 am on 12 September 2013

The annual survey of directors' fees found the median fee paid to non-executive directors has remained static compared with last year and the fees paid to non-executive chairmen has risen 2.4%.

The inflation rate between the June quarter last year and the June quarter this year was 0.7%.

The survey of more than 1500 directorships and 991 organisations throughout New Zealand was conducted by DSD Consulting for the Institute of Directors.

It found the median fee paid to a non-executive director in 2013 is $36,000 while the median fee paid to a non-executive chairman is $50,000.

The survey found that 59% of respondents were satisfied with the amount they were being paid.

Institute of Directors chief executive William Whittaker says it's important that directors are properly paid.

He says there is a danger of directors being under-remunerated over time if there is sufficient slippage and if remuneration does not keep pace with other forms of employee remuneration.

Dr Whittaker says that could impact on the attractiveness of directing as a profession, although that is not being seen at the moment.

He says risk/reward ratios need to be considered given the fact directorships are currently in the spotlight.

Dr Whittaker says it is important that directors' fees keep pace with other forms of remuneration.

He says the role of a director is quite complex and there is an exposure to risk as the regulatory framework has tightened.

Dr Whittaker says it is not a case of a board member just showing up to the meeting and collecting their fees. He says more work is done outside board meetings than in them.