Company directors’ pay, hours worked on rise
Directors were celebrating pay rises in excess of inflation in the past year, yet the Institute of Directors (IoD) believes the pay rises should have been higher.
The IoD-EY survey of directors’ working lives indicated a sharp rise in the number of hours directors were working had decreased their hourly pay rates.
Despite this, the majority of directors said they felt they were adequately paid for their work.
Only in the health, arts and government sectors did more than half of directors feel they were underpaid.
The survey, published in the IoD-EY Directors’ Fees Report, covered 2158 directorships, across 1546 organisations ranging from huge companies listed on the New Zealand stock exchange to much smaller non-profit trusts and charities, the vast majority being New Zealand-owned.
IoD chief executive Kirsten Patterson said: ‘‘Time spent by directors on board matters has increased from 106 hours a year in 2017 to 127 hours in 2018. This is up from 88 hours in 2014.’’
A growing body of health, safety, and other regulatory requirements was driving the rise in hours worked, she said, as were risks such as cyber security.
Median directors’ fees rose 2.3 per cent, from $44,000 to $45,000 in the past year, the IoD found, compared with a 1.5 per cent rise in inflation as measured by the consumer price index.
Some classes of director got far higher pay rises. Executive chairs of boards, for example, saw the median directors’ fee rise by 6.7 per cent ($37,955 to $40,500), though executive directors would also be receiving pay for their executive positions within their organisations as well.
Non-executive chairs of boards, who get higher directors’ fees than executive directors, saw their pay increase by 2.7 per cent ($55,000 to $56,500).
Many directors are also paid extras on top of their usual fees for chairing committees on their organisations.
Not all directors got rises, however. The average fee paid to directors of non-profit organisations had not moved.
The directors who got the biggest fee rise were those in the real estate sector.
There was no pay gap between men and women holding the same position on the same board, the IoD said.
In addition, ‘‘the number of women non-executive directors on boards increased by 4 per cent[age points] – up from 30 per cent in 2017 to 34 per cent in 2018,’’ EY partner Una Diver said.
There was one significant difference in male and female directors’ working lives: The women are working longer hours.
The median hours worked by non-executive women directors was 136 hours. Their male colleagues worked a median of 122 hours.