UK non-executive director pay fails to keep pace with workload
September 14, 2022
FT comment supports our Life in the Boardroom survey results that NEDs’ pay is losing pace with their increasingly demanding roles. NEDs are seeking lucrative roles in private and PE-backed companies away from the public gaze.
Last Thursday, Agenda, an FT Specialist publication that focuses on corporate boards, published an article “UK non-executive director pay fails to keep pace with workload” by Jessica Tasman-Jones. In her article, Jessica explores the evidence in support of the increasing demands on NEDs and whether or not their pay is keeping up with their increasing workload.
According to our latest survey of board chairs and NEDs, Life in the Boardroom, 60% of NEDs reported that demands on them had increased over the past year. Some respondents expressed concern that their pay had not risen in line with the demands of their role. 43% of respondents reported their fees are low or too low in light of current demands.
The feeling among NEDs that their pay is not keeping pace with their evolving roles is echoed by search firm, Heidrick & Struggles, who commented that NEDs’ pay has fallen out of touch with the amount of time they dedicate to the role as well as the responsibilities they take on.
In addition, the director of policy and corporate governance at the Institute of Directors noted a concern that NEDs’ responsibilities are likely to increase even more with the creation of a new regulator – the Auditing, Reporting and Governance Authority (expecting to start operating in 2023).
It has been noted, too, that increasing numbers of NEDs choose appointments at private, including private-equity backed, companies, where they are away from the public gaze.
The above is only an extract of interesting findings. The full article can be accessed here.
Further information and data on the pay of NEDs and Chairs in firms of all industries and sizes, how they use their time, their opinions, their pandemic experiences, and more can be found in our 70+ page report on 885 boardroom positions, click here for a free preview.