Close
Learning Methods
Classroom
A traditional classroom couples on-site learning with the added value of face-to-face interaction with instructors and peers. With courses and exams scheduled worldwide, you will be sure to find a class near you.
Interaction
Highly Interactive
On-going interaction with instructor throughout the entire classroom event
Interaction with peers/professionals via face-to-face
Components (May Include)
Onsite
On-site instructor-led delivery of course modules, discussions, exercises, case studies, and application opportunities
Supplemental learning elements such as: audio/video files, tools and templates, articles and/or white papers
E-course materials available two weeks prior to the course start date; printed course materials ship directly to the event location
Duration
One + Days
Varies by course ranging from one to multiple days
Technical Needs
Specific requirements are clearly noted on the course page
Virtual Classroom
Ideal for those who appreciate live education instruction, but looking to save on travel. A virtual classroom affords you many of the same learning benefits as traditional–all from the convenience of your office.
Interaction
Highly Interactive
On-going interaction with instructor throughout the entire virtual classroom event
Interaction with peers/professionals via online environment
Components (May Include)
Live online instructor-led delivery of course modules, discussions, exercises, case studies, and application opportunities
Supplemental learning elements such as: audio/video files, tools and templates, articles and/or white papers
E-course materials available up to one week prior to the course start date. Recorded playback and supplemental materials available up to seven days after the live event.
Duration
Varies by course ranging from one to multiple sessions
Technical Needs
Adobe Flash Player
Acrobat Reader
Computer with sound capability and high-speed internet access
Phone line access
E-Learning
A self-paced, online learning experience that allows you to study any time of day. Course material is pre-recorded by an instructor and you have the flexibility to view content modules as desired.
Interaction
Independent Learning
Components (May Include)
Pre-Recorded
Pre-recorded course modules
Supplemental learning elements such as: audio/video files, online quizzes
E-course materials start on the day of purchase
Optional purchased print material ships within 7 business days
Duration
120 Days - Anytime
120-day access starts on the day of purchase
Direct access to all components
Technical Needs
Adobe Flash Player
Acrobat Reader
Computer with sound capability and high-speed internet access
Close
Contact Sponsor
E-Reward
Online
Paul Thompson
Phone: 1 44 01614322584
Contact by Email | Website
Close
Sorry, you can't add this item to the cart.
You have reached the maximum allowed quantity for purchase in your cart or the item isn't available anymore.
Product successfully added to your cart!
Price
View your cart
Continue shopping
Please note our website will be down this Friday, November 5 from 9pm ET – 11pm ET for routine maintenance. We apologize for any inconvenience.
WORKSPAN
WORKSPAN DAILY |

Directors’ 2020 Compensation Higher Than Expected

Editor’s Note: Workspan Daily will be publishing a monthly executive compensation column from Willis Towers Watson for the benefit of our readers and to encourage further discourse on topics vital to compensation professionals. New to WorldatWork? Please feel free to join the discussion in our Online Community or send your thoughts to workspan@worldatwork.org.

Total expected compensation for outside corporate directors continued to rise in 2020, while boards navigated a near-term pandemic response and planned for the longer-term realities.

Image

Willis Towers Watson’s Global Executive Compensation Analysis Team completed its annual year-over-year comparison of S&P 500 director pay program results, contrasting 2020 proxy data against that of 2019. The analysis of nonemployee director compensation looks at an expected level of pay for a median outside director as of fiscal year-end 2019 and 2018, which includes forward-looking pay level adjustments disclosed for 2020 and 2019 but does not include any potential disclosed impact due to COVID-19.

The latest review shows an expected increase in total direct compensation in 2020 occurring despite minimal changes in median value for individual components of pay, suggesting that outliers and companies with variable fees are driving the increases in total pay levels. However, with COVID-19 still shifting the landscape and affecting certain industries more than others, some boards are having to adapt for the short term while still preparing for the long-term impact of the ongoing pandemic.

Pay program design: Pay mix for nonemployee board members held steady at 60% equity and 40% cash. The median value of individual cash components remained static while the median value of total annual cash compensation increased 2%. Annual stock compensation increased the same amount (2%), but total direct compensation went up just 1%.

  • The prevalence of board or committee per-meeting fees each declined by one percentage point while the prevalence of meeting fees paid after attending a predetermined number of meetings (threshold meeting fees) increased by one percentage point.
  • The number of companies granting common stock decreased one percentage point as the median value of common stock increased 7%, from $150,000 to $160,000; the median value now approximately matches that of other full-value stock.
  • The number of companies granting restricted stock increased one percentage point. Two-thirds (66%) of companies now deliver all or a portion of annual equity compensation through time-vested restricted stock grants, an increase of one percentage point over the prior year. About half (51%) of companies issue restricted stock units. The favored vesting schedule for restricted stock is one-year cliff (69%) followed by immediate vesting (13%).
  • One-time initial stock grant prevalence decreased one percentage point as value at the median dropped 11% from $175,000 to $156,000.
  • Cash proration (for partial-year service) is near universal (97%) while equity compensation proration has been recorded for two-thirds (66%) of the S&P 500.

Pay program changes: Excluding any adjustments made due to COVID-19, more than half (55%) of companies made changes to their pay programs. A little over a quarter of companies (26%) increased their annual cash retainer; nearly a third of companies (31%) increased the value of their annual equity grant, and 15% of companies adjusted their noncore pay elements.

COVID-19: As of Dec. 7, 2020, Willis Towers Watson research into 2020 proxies and Form 8-K current event filings revealed that just 16% of the S&P 500 have announced changes to their director compensation as a direct response to an uncertain environment created by the COVID-19 pandemic. Specifically, 14% of companies directly reduced compensation, with most changes made to cash compensation:

  • 86% reduced cash only, 10% reduced both cash and stock, 1% reduced stock only and 3% did not disclose.
  • The median value of the reductions is 50% while the median time frame is six months.
  • Industrials (34%), consumer discretionary (32%), energy (25%), communication services (18%) and health care (17%) all disclosed changes at a rate higher than the full index (16%).
  • No impact was noted among companies in the utilities sector (0%); limited changes were noted among financials (2%), materials (4%) and consumer staples (6%) sector companies.

Board roles and responsibilities during the COVID-19 global crisis are evolving as companies continue to adapt to current and future challenges. Most changes made were immediate reactions to an uncertain environment and are expected to be short-lived, with no examples of changes expected to last beyond 12 months. However, it remains to be seen to what extent these potential changes will impact overall trends to compensation actually paid in 2020, or if they will permanently alter the scope of director compensation in some meaningful way.

This article was originally published at Willis Towers Watson on Dec. 15, 2020.

About the Authors

Rebecca Burton is lead associate, executive compensation, Willis Towers Watson.

Peter Kim is associate, executive compensation, Willis Towers Watson. 


About WorldatWork

WorldatWork is a professional nonprofit association that sets the agenda and standard of excellence in the field of Total Rewards. Our membership, signature certifications, data, content, and conferences are designed to advance our members’ leadership, and to help them influence great outcomes for their own organizations.

About Membership

Membership provides access to practical resources, research, emerging trends, a professional network, and career-building education and certification. Learn more and join today.