For further information: Charles Peck
(212) 339-0404
The Conference Board
For Immediate Release Release #4532A
OUTSIDE DIRECTORS OF CORPORATE BOARDS ARE RECEIVING MORE STOCK COMPENSATION
CEO COMPENSATION CONTINUES TO RISE IN MOST INDUSTRIES
January 12, 2000 -- Stock compensation is becoming a significant addition to outside director pay, according to The Conference Board's report issued today on outside director compensation in 1999.
"The use of stock compensation for outside directors is becoming increasingly prevalent," says Charles Peck, Conference Board compensation specialist. "Eighty-seven percent of the surveyed companies offer some form of stock compensation to directors, causing total compensation to increase significantly."
Median basic annual compensation for 1999 (not including stock components) was $35,000 in manufacturing; $32,000 in nonfinancial services; and $31,400 in financial companies. When stock is added, median annual total compensation in manufacturing increases to $46,600. The corresponding figure among financial firms is $36,600. In the nonfinancial service sector, 1999 total compensation was $45,000. The forms of stock payment include: all or part of basic pay in stock; annual grants of stock; restricted stock or stock options; one-time grants of stock; or other periodic grants.
Nineteen percent of the 718 companies surveyed now have stock ownership guidelines for directors.
CEO COMPENSATION CONTINUES TO RISE IN MOST INDUSTRIES
Total compensation for CEOs was higher in all industries in 1998 than in 1997, except energy, The
Conference Board also reported today in its annual executive compensation report.
The report covers 1,932 companies in 14 major industries. The study reports total compensation (salary, annual bonus and the value of long-term incentives, total current compensation (salary plus bonus), and salary for companies' top five executives.
Total compensation and salary for CEOs is highest in the insurance industry at $1,317,000 and $652,000 respectively. The three other industries breaking $1million in total CEO compensation were telecommunications ($1,179,000), commercial banking ($1,175,000), and communications ($1,150,000).
"Executive compensation programs are increasingly emphasizing long-term incentives, particularly those involving stock," says Peck. "Since company performance as measured by stock price is generally good, stock ownership plans are contributing significantly to the current level of executive compensation."
For the other 10 industries, median CEO total compensation was: utilities ($972,000), manufacturing ($917,000), financial services ($908,000), computer services ($854,000), energy ($851,000), construction ($832,000), diversified service ($811,000), retail trade ($782,000), transportation ($757,000), wholesale trade ($657,000).
CEO bonuses are greatest in construction and telecommunications. Top executives in both industries receive on average 100% of their salary.
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Sources: Top Executive Compensation in 1998, Report #1258-99-RR, The Conference Board
Directors' Compensation and Board Practices in 1999, Report #1259-99-RR,
The Conference Board
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