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Tuesday, January 11, 2005
U.S. Boardrooms Add More Women, Independence in 2004
NEW YORK (Reuters) - Corporate boards grew more independent from management last year, while the number of women in boardrooms grew to one-quarter of all new outside directors, up from about 16 percent in 2003.
Executive search firm Spencer Stuart's "Board Index" also found corporate boards earned more cash in 2004.
The index found 24 percent of the 443 new outside directors named last year at companies that make up the Standard & Poor's 500 index were women. That was the largest increase in female independent directors ever in S&P 500 companies in one year, the firm said.
Women now account for 16 percent of total board membership in the S&P 500, an increase from 13 percent in 2003. In 1999 the figure was 12 percent.
But female chief executives declined to seven from nine in 2003, according to the report.
As for all new outside directors, the 443 new independents represent a 13 percent increase from 2003, not surprising given new rules mandated by the New York Stock Exchange, Nasdaq Stock Market and the Sarbanes-Oxley law requiring greater director independence and expertise.
The index found the number of companies with a presiding, or lead, director, grew to 84 percent of S&P 500 companies, up from 36 percent in 2003. The lead director is typically independent and conducts meetings of the other independent directors apart from company executives on the board and other insiders.
The Spencer Stuart report, published annually for the past 19 years, found that for the first time the average number of outside boards that chief executives sit on dropped below 1 to 0.9. In 2003, chief executives on average sat on 1 other board, and five years ago the figure was 1.6 boards.
DIRECTOR PAY UP
The average annual retainer earned by S&P 500 directors rose 14 percent to $50,000 from $43,700 in 2003 and $33,500 in 1999. The retainer excluded committee meeting fees and equity-based pay.
In a separate survey, Aon Consulting said on Tuesday total cash pay for S&P 500 directors grew by 21.6 percent to a median $67,556. Total equity awards rose nearly 35 percent to $69,616.
Peter Lupo, New York compensation leader with Aon Consulting, said in a statement that boardroom pay is headed higher still.
"We already know that the time commitments for many corporate directors will continue to increase. Next year, for example, it is highly likely that compensation committees will need to spend a substantial amount of time discussing, reviewing and revising long-term incentive compensation programs because of the likelihood that stock options will be expensed in 2005."
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