Introduction

The role of board members at privately held and family-owned companies in governance and oversight has expanded in recent years. As private companies formalize and expand the scope of their boards, they face difficulty in determining the appropriate amount to pay directors due to a lack of available market data on private company board pay. To address this data deficiency, Compensation Advisory Partners (CAP) and Private Company Director and Family Business magazines are proud to present the results of our 7th annual survey of private company board compensation and governance practices.

The 2026 survey includes a large dataset of 579 respondents and provides an up-to-date analysis of director pay levels and practices. New questions were added to the survey over the past two years. In 2025, we asked about the prevalence and practices of family and owners’ councils to capture additional governance forums specific to family businesses. In 2026, we asked respondents for more detail on long-term incentive awards and how often director compensation is typically reviewed. Year-over-year comparisons are made in this report with respect to 2025 survey results.

For purposes of analyzing the compensation data elements, only companies that provide the compensation element were included in the pay levels analysis. Some companies that do not offer a particular compensation element provided “zero” as the answer for that pay element. Zeros were omitted in the analysis of pay levels. However, companies not offering a particular compensation element are reflected in the prevalence data. The data is effective as of April 2026.

Summary Report

The full report for the 2026 Private Company Board Compensation and Governance Survey with detailed results by revenue size, industry, and company type is provided to survey participants only. This executive summary report covers high-level findings. Please contact CAP to participate in the 2027 edition of the survey, which will launch in April 2027, or if you are interested in a board compensation assessment based on the survey data.

About the Survey Participants

The survey respondents represent companies in diverse industries and span a variety of sizes as measured by revenue, which is shown in the chart below. The average revenue across the entire survey sample is $100 million. The top three industries represented in the survey are manufacturing (27% prevalence), professional, scientific and technical services (12%) and finance and insurance (10%).

Of the participating companies, 59% are wholly or majority family-owned or controlled. The survey also drew participation from companies that are closely held, private equity-owned, and owned by employees through employee stock ownership plans (ESOPs). The business structures represented include S corporations, C corporations, limited liability companies (LLCs), partnerships, and other structures. (See graphs below.)

*Other includes Sole Proprietors, Mutual Companies, Not-For-Profit, Cooperatives, and Subsidiaries

Most participants are based in the United States, but the survey drew responses from all over the world. Of the respondents, 73 percent have fiduciary boards, while the remainder have advisory boards. Compensation for directors on advisory boards is typically 65% to 85% of the compensation for directors on fiduciary boards. The gap in compensation has narrowed given increased prevalence of advisory boards that, in practice, function similarly to fiduciary boards with the same contributions expected from board members.

Compensation Findings

Cash Compensation Levels and Practices

Of the survey respondents, 90% provide compensation to directors. The most common forms of compensation and the associated prevalence among survey respondents are:

• Annual cash retainers (76%)
• Meeting fees (42%)
• Incremental compensation for board leadership (42%)
• Incremental compensation for committee leadership (42%)
• Incremental compensation for committee membership (29%)

Approximately half of companies (51%) use annual retainers as their only form of cash compensation. One-quarter of companies provide both retainers and meeting fees, and 17% provide only meeting fees. Meeting fees have been nearly eliminated by public companies in favor of retainers, which are simpler and reflect that much work occurs outside of meetings through ad hoc conversations and ongoing interactions with management. Private companies are following this trend and are reducing their reliance on meeting fees, either by eliminating the use of meeting fees entirely or combining them with other pay elements.

Annual cash retainers increased 3% in 2026 to $40,000 at median for the total survey sample, while per meeting fees remained flat at $2,500 for the fifth year in a row.

As is the case with executive compensation, board retainers are highly correlated with company size, as shown in the chart below.

Long-Term Incentives

Thirty percent of privately held companies provide long-term incentives (LTI) to directors. The prevalence has fluctuated between 28% and 37% over the past three years of the survey. LTI is used by private companies to compete with public companies for director talent (over 90% of public companies grant equity to their directors) and to provide an opportunity for directors to share in the company’s growth and success. Long-term incentives have historically been most common at venture- and private equity-backed companies (74% prevalence), as these companies are incentivizing for a value-realizing event.

Of the companies that provide long-term incentives to directors, full-value shares — either phantom or real equity — are the favored vehicle.

Note: prevalence is greater than 100% as some companies use multiple vehicles.

Typical practices for private company long-term incentive awards are to grant the awards on an ongoing basis (63% of companies grant either annually, every few years, or ad hoc) or when the director is appointed to the board (32%), and to have awards subject to vesting. Given the multiple time frames that awards cover, LTI values vary significantly. The total sample median award value is $30,000, which is the annualized value of LTI awards granted on an ongoing basis.

Committee Compensation

Committees are prevalent at privately held companies, with 72% of survey respondents reporting that they have formal committees. The three main committees are Compensation (85% of respondents), Audit (79%) and Nominating/Governance (64%), the same committees most common at public companies. Typically, each director serves as a member of one or two committees as a requirement of board service.

Over 40% of private companies provide additional compensation for committee chairs with an incremental retainer of $7,650 at median. Close to one-third of companies pay an annual retainer to committee members of $5,700 at median. Committee compensation for both members and chairs increased significantly this year, indicating the increased importance of a board committee structure and the associated workload. Committee retainers differentiate pay between directors by role and compensate for additional work.

Compensation to Family Members

Of the participants, 49% provide compensation to family members who serve on the board. The decision to compensate family members is a philosophical one; some companies do not believe in paying family directors because they already are compensated by the company through shareholder distributions or employment. Other companies believe in the importance of recognizing contributions, skills and time for all directors, regardless of family or shareholder status. For these companies that compensate shareholders and family members, 71% compensate them on the same basis as independent directors.

Total Director Compensation Cost

To understand a key piece of the total cost of having a board, the survey asked participants to calculate the average annual total compensation paid to one director and to all directors on the board. Total compensation sums all elements of pay, including the annual cash retainer, board meeting fees, short-term and long-term incentives, committee service retainers and meeting fees, and leadership retainers.

The median annual compensation for a single director across the entire survey sample is $50,000, while the median annual cost for total director compensation is $206,000. Total director compensation remained flat from 2025 to 2026. However, director compensation does not typically change every year. Survey participants most commonly report adjusting director compensation every two to three years.

Total board cost is correlated with company size, as shown in the chart below. This relationship is driven by differences in the amount of compensation given to individual directors, as well as differences in the size of the board. As a company’s revenue increases, the complexity of operations and the responsibilities of the board also increase. To deal with this greater responsibility, larger companies often have a higher number of board members and separate committees. Higher compensation is needed to attract qualified talent and reward them for a more considerable time commitment.

Unique Compensation Elements

Over the full data set, we see private company board compensation practices converging with public company practices. However, a small and growing sample of private companies report unique director compensation elements, including:

• Performance bonuses, which are not used by public companies as they are viewed poorly by institutional shareholder advisory firms.
• Director compensation after retirement from the board.
• Additional non-dividend payments to shareholder board members.
• Payments for special projects, such as one-on-one executive mentorship.
• Deferred compensation where the value is tied to company returns.
• Director participation in the company’s stock purchase program.

These private companies are using creative approaches for board compensation that are tailored to the culture, strategy, and ownership structure of the company.

Governance Findings

Board Size and Composition

Typical private company board size ranges from five to eight directors, with a median of seven directors. The median size is unchanged from the 2025 survey.

Board composition for 2026 continues to be half inside directors and half independent/ outside directors. Most private company boards have Baby Boomer (88%) and Generation X (84%) directors. Millennials are on 38% of private company boards, followed by the Traditional Generation representing those age 81 and older (13%) and Generation Z (5%).

For 2026, private company boards report holding an average of four in-person meetings and two virtual meetings, which is unchanged from 2025. The typical practice is a cadence of quarterly in-person meetings.

The reported annual time commitment to perform the basic Board duties remained the same for 2026. One-third of respondents spend 51 to 100 hours on board work each year, with another 21% spending more than 100 hours on board work. Committee work typically adds an additional 10 to 20 hours to annual board work.

Board Chair

Many companies separate the board chair and chief executive officer (CEO) roles. Of the private company survey respondents, 27% have a board chair who is an outside director, and 25% have a lead independent director, compared with 55% and 34% respectively for micro-cap public companies. Corporate governance best practices call for increased use of independent board leadership.

Term and Age Limits

A minority of private companies (24%) report term limits for directors, and an even smaller number (11%) report a mandatory retirement age. For private companies with term limits, the most common responses are one- to three-years and seven-to ten-years. The most common mandatory retirement age range is 71 to 75 years old (52% of respondents).

Term limits can be useful for private companies. They promote board refreshment, especially as companies may need different skills and contributions from the board at different times in the company’s life cycle. Term limits also help companies avoid difficult conversations with directors who are not performing or clashing with others. Many companies elect to renew terms, but the presence of a stated term limit at least supports periodic evaluation of board composition.

Board Effectiveness

Privately held companies create boards to provide a structure of accountability and sound governance, and because boards provide benefits and competitive advantages. Directors bring specialized skills and expertise to the company, serve as sounding boards and advisors to owners and management, provide unique perspectives and ideas, and leverage their professional networks on behalf of the company. At times, directors also assist with transactions and special situations.

The survey asked respondents about the effectiveness of their boards. The findings have been consistent each year: boards are overwhelmingly viewed as effective, with 87% rating them as effective to extremely effective (the same as in 2025).

The survey asked about ways to improve board effectiveness and the board’s biggest impacts on the company. The top two ways to enhance board effectiveness are to add board members with specific expertise (e.g., industry, operations, finance, etc.) and to increase interactions between management and the board. The biggest impacts private company boards have on the company are serving as a sounding board for management, especially on developing business strategy, interacting with customers and providing enhanced corporate governance.

Family and Owners Councils

For the second year, the survey gathered data about family and owners councils to better capture the scope of governance forums at family companies. Family (or owners) councils are comprised of select members who represent the family (or owners) in matters of importance. Generally, the council is the primary forum for communication and education of the family for the purpose of sustaining engagement in the business. For example, the council may develop education programs on the family’s business, the meaning of share ownership and proper governance. The family council may also review business financial statements and future investments, the company’s dividend policy, succession planning, family member employment practices, family apprenticeship programs and more.

Among family business respondents to the survey, 56% report having a formal structure for family governance. Of companies with a family council, 30% pay the leader a median amount of $12,000 per year and 20% pay members a median amount of $10,000. Of the respondents with family councils, 44% have an established budget, which is $100,000 per year at median.

Looking Ahead

In recent years, private companies have made significant changes in their director compensation programs and governance structures, borrowing from public company practices. The survey has reported higher prevalence of annual retainers, long-term incentives and compensation programs that combine multiple elements of compensation. Private companies have increased certain compensation elements and enhanced formal governance systems for both fiduciary and advisory boards and have higher expectations for time commitment and contributions from board members.

Given how favorably private companies view their boards, strong demand exists for private company directors. As private companies compete for high-quality directors, the focus on providing competitive compensation to directors will continue, and we may see more usage of unique compensation elements. Board compensation is typically not adjusted every year, so we expect to see gradual pay increases each year going forward.

Survey Contacts

The full survey results are free but limited to participants. Please contact either CAP or the survey director at MLR Media if you are interested in participating in the 2027 survey. Please contact CAP if you are interested in a board compensation assessment for your company,

Survey Director

David Shaw
President, MLR Media
[email protected]

Survey Authors from Compensation Advisory Partners:

Susan Schroeder, Senior Partner, [email protected]
Bonnie Schindler, Partner, [email protected]
Louisa Heywood, Senior Associate, [email protected]
Joshua Hovden, Senior Associate, [email protected]