How much does an independent director get paid on average?

How much independent directors are compensated can probably be gleaned from a close look at their organisation’s accounts, but it is not something that is widely discussed or easily found in the public domain.

Recognising that this is of tremendous interest to both board members eager to check that they are offering market rates and candidates, Nurole surveyed over 600 board members across all sectors and sizes of organisation to find out exactly how much independent directors are being compensated.

The Nurole 2019 Independent Director Compensation Survey also reveals how many days a year most independent directors work for their organisations, the average number of board positions they hold, which organisations are more likely to compensate with a mix of stock and cash and which most often require directors to take an equity stake.

Bigger business pays more

As to be expected, the Nurole 2019 Independent Director Compensation Survey found that total compensation tends to increase broadly in line with the size of the organisation and its turnover. The average annual remuneration for an independent director varies from £24,379, when the organisation has a turnover of less than £5 million, up to £100,370, for organisations with a turnover of over £5,000 million. Most independent directors hold at least 2.5 roles, so the remuneration quickly adds up further. At the same time it’s still a small fraction of what the executive team are paid, although independent directors have the same liabilities.

Non-profits take the biggest time commitment

Although non-profits independent directors have the average lowest number of days they are contracted to work per year, at 17, the non-profit sector is most likely to require extra time of its independent directors, with 23 days actually being spent with them, a 28% increase above contractual. Government positions have the highest amount of contracted days, averaging 37.

Giving and taking stock

Private equity and venture capital-backed firms are those most likely to offer both cash and stock compensation, and there are a small proportion of venture capital-backed firms who remunerate with stock only. While private equity-backed companies are the most likely to require their independent directors to make a personal investment in their business.

To read the full break down of how annual remuneration, day rates, stock options, time spent on roles, investment and percentage ownership requirement differs across sectors and sizes of organisation, download the full copy of the Nurole 2019 Independent Director Compensation Survey here.

If you are looking for non-executive director roles, Nurole's innovative recruitment platform can help.