Non-Executive Remuneration: What could you earn on a board?

Wondering how much you could earn as a non-executive director ? We look at the latest reports in our blog

11-11-2019

Non-Executive

Non-executive directors have one of the most important jobs in business today. The role is a synchronised effort of coaching and mediating. He or she must act as a guide, mentor and wise counsellor to the company’s executives and bring with them a wealth of knowledge from their own executive career.

  • The key responsibilities of a non-executive director include:
  • Providing independent advice and an objective perspective
  • Scrutinising board papers and challenging fellow members
  • Using knowledge and experience to provide advice and guidance
  • Asking questions to around governance, finance, safety etc.
  • Taking a longer term strategic view for the organisation
  • Assisting in the development of organisational strategy
  • Considering strategic and corporate risks
  • Ensuring corporate governance is followed
  • Questioning intelligently and offering constructive debate

With such an important role to play within a business, either in the public or private sector, it is little wonder that the role is usually compensated. Some of the most experienced and knowledgeable non-executive directors have even accrued a salary of over £1 million. Former AOL CEOJonathan Miller took home more than £1 million in 2015 for sitting on eight corporate boards, hile according to the Boston Globe former Merck & Co. CEO P. Roy Vagelos earned more than £20 million by sitting on just one board in 2014.

Recent Reports

According to the 2019 AIM Directors’ remuneration report, the median total remuneration for a non-executive director was £35k, a nominal increase of 6% on the previous year. The median figure for the upper quartile of non-executive directors was £49k, whereas the lower quartile was £23k. There were exceptions for some non-executive directors where individuals were earning well over £100k, particularly in the areas of technology and media.

In September 2019, advisory firm Willis Towers Watson looked at the average remuneration of non-executive directors and chairmen in the FTSE 100. In the lower quartile, the typical salary for a non-executive director was £61k, the median salary was £70k and in the upper quartile the average salary was £80k. For a non-executive chairman in the FTSE 100, in the lower quartile they could expect to earn approximately £320k and in the higher quartile £610k.

The BT Group released a report summarising the remuneration of its non-executive directors earlier this year and there was a wide range of figures across the organisation The lowest earning board member had a take home of £3k per year whilst the highest earning took home £170k. The average salary of a member on their board was approximately £108k.

Looking to learn more about how much you could earn as a non-executive director? We’ve recently published a highly informative infographic which you can download here

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