An annual governance practices study of 100 leading Canadian companies by executive recruiting firm Spencer Stuart Canada shows that a typical independent director with five years of tenure holds $650,567 worth of equity in companies they govern.

This significantly exceeds the usual minimum shareholding requirements established by boards of the 100 companies that comprise the Canadian Spencer Stuart Board Index.

“This is the first time we’ve analyzed the dollar value of equity holdings of Canadian directors,” says Andrew MacDougall, who leads Spencer Stuart’s board services practice in Canada. “What’s quite clear is that board members are thinking like shareholders and putting their own compensation into play.”

The analysis also found that, when given the choice, over 70% of directors opted to receive equity in lieu of cash remuneration, with the majority choosing to take all of their compensation (e.g. applicable retainers and meeting fees) in equity.

The 12th annual Canadian Spencer Stuart Board Index (CSSBI) studies director compensation, governance practices and trends for 100 of the largest publicly traded Canadian companies (and includes comparisons with comparable U.S. firms.

The study finds a seady increase in director total compensation. Median total compensation for a non-executive director of a CSSBI 100 board is $91,612, a 7% increase over 2006 (median total director compensation increased 10% between 2005 and 2006). Median total compensation at the larger CSSBI companies (revenue exceeding $5billion) is $125,463, or almost three-quarters more than that of the smaller CSSBI (revenues between $1-5billion).

The study also fines flat fees for directors are making inroads in Canada: Seventeen CSSBI 100 boards (nearly one in five) give a flat, all-inclusive fee to their directors, up from 12 in 2006, whereas nearly half of the comparable U.S. firms do so. Including equity, the median flat fee is $120,000, or 36% higher than the non-flat fee group.