The recession was a difficult period for many Canadians, but not so much for company directors.
A survey by the Conference Board of Canada suggests remuneration for directors on boards of publicly traded companies rose significantly between 2008 and 2010, when the general economy was struggling and unemployment was mostly on the rise.
The findings of the semi-annual survey show the average total compensation companies paid to outside directors soared to $112,651, a 33% jump from the $84,452 average in 2008.
The survey found that large companies with more than $2 billion in annual revenue paid directors an average of $128,171, while medium-sized firms — with revenues between $150 million and $2 billion — paid an average of $124,851.
The survey found compensation ranged from a low of $12,000 to a high of $663,800 for a director at a medium-sized mining company.
Smaller firms with revenues of under $150 million paid directors substantially less, an average of $70,648.
The Conference Board’s Karla Thorpe, who was in charge of the survey, said compensation for directors has risen at a faster rate than for the individual companies’ employees or even executives.
“The key factor is that directors are expanding the scope of their responsibilities, doing additional due diligence and they are taking on more responsibility,” she said. In addition, directors are being held more personally responsible for company performance.
The results also show that boards of directors remain primarily white and male.
Only 10% of directors were women, a slight two-point increase from 2008. Meanwhile, 18% of corporate boards have at least one member of a visible minority as director, a more significant increase from 13% in 2008.
The Conference Board release did not give a reason for the increase in compensation to directors, other than to say that directors are becoming more actively engaged in company business and spend an average of 128 hours a year on board business.