What Directors Think: Are You Paid Enough?

by Corporate Board Member, November 5th, 2010.

Are you paid enough as a director? If not, how much of a raise do you think you deserve?

“The general public perception is that businesspeople are crooks. It’s okay for LeBron to get paid whatever he’s going to get paid, but not Dave Hoover. So a lot of light has been shone on compensation. Most of the folks I know who serve on boards aren’t there because of the money. That said, I wouldn’t do it if I weren’t paid. I’m personally paid enough. ”
R. David Hoover, 65
Chairman and CEO, Ball Corp., Broomfield, Colorado
Eli Lilly, Energizer Holdings, Qwest Communications

“I don’t think I could put an actual number on it, but I think, relatively speaking, today’s director should be compensated more than before because of the increased amount of time spent and knowledge level required to do the job. There’s also more responsibility and accountability today, and that means more risk. And I think that all should be considered when determining pay. ”
Jennie S. Hwang, 61
CEO, H Technologies Group, Cleveland
Ferro Corp.

“You’re never paid enough as a director, mainly because it’s not the work, it’s the implied risk. And with the federal government getting into it, that risk is taking on a different dimension. It’s one thing to take on a risk where you’ve exercised your business judgment correctly and you’ve gone about everything in what you think is the right way, based on Delaware law and your ethics. But you can do all of the above and if the federal government takes over, you could be at risk because what was okay yesterday changes and you become a political target. And nobody wins. All you have to do is be accused and you’re destroyed. That is a grave, grave danger. So as the federal government gets more into this instead of leaving it to the SEC and to states like Delaware, which have been very good at it, I’m not sure pay is going to rise sufficiently. Clearly we’re underpaid. We’re underpaid on my board because Mr. Icahn is making a point. The point, as I understand it, is that he’s going to pay less than market—he feels he pays enough—as he has been criticizing others for overpaying. In addition, he’s a tough negotiator and demands high standards. We may feel a bit underpaid, but he clearly does not agree.
William A. Leidesdorf, 65
President, W.A. Leidesdorf Interests Inc., New York City
Icahn Enterprises LP

(continue reading… )

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