A question we get as board advisors is: do non-executive Board Chairs and Lead Directors typically serve on board committees, and if they do serve on a board committee, or committees, is it typically as a member or as the Chair of the Committee? We analyzed practices among the 100 largest U.S. public companies, by revenue, to address this and related questions, with a focus on the three standard board committees: Audit, Compensation and Nominating/Governance.

Do non-executive Board Chairs and/or Lead Directors serve on board committees?

Among our sample, a majority of both non-executive Board Chairs and Lead Directors serve on board committees. 69% of non-executive Board Chairs serve on at least one board committee, compared to 83% of Lead Directors. Most commonly, both roles serve on one or two of the standard board committees, and on average non-executive Board Chairs serve on 1.1 board committees compared to 1.4 committees for Lead Directors. In our experience, directors serving in either of these leadership roles at times will attend committee meetings even if they are not a formal/voting member of a given board committee.

# of Committees

Non-Executive Chair Prevalence

Lead Director Prevalence

0 Committees



1 Committee



2 Committees



3 Committees






Which board committees do non-executive Board Chairs and Lead Directors serve on?

Among the non-executive Board Chairs that serve on at least one committee, they most often serve on the Nominating/Governance Committee (59%), followed by the Compensation Committee (33%), with more limited prevalence of serving on the Audit Committee (13%).

At a high level, prevalence is directionally consistent for Lead Directors, Nominating/Governance Committee has the highest prevalence (57%), Compensation Committee has the second highest prevalence (48%), and Audit Committee has the lowest prevalence (32%) among Lead Directors that serve on at least one board committee. While directionally similar in terms of prevalence, Lead Directors are more than twice as likely (32%) to serve on an Audit Committee as a non-executive Board Chair (13%). This is likely driven by the independence standards that exist for Audit Committee members on public company boards.

Board Role

Prevalence Serving on a Committee




Non-Executive Chair




Lead Director




When non-executive Board Chairs or Lead Directors serve on a board committee, how often do they Chair that board committee?

Among non-executive Board Chairs that serve on at least one committee, when they are on an Audit Committee they serve in the Chair role 20% of the time, when they are on a Compensation Committee they serve in the Chair role 31% of the time, and when they are on a Nominating/Governance Committee they serve in the Chair role 35% of the time.

In contrast, among Lead Directors that serve on at least one committee, none in our sample served as the Chair of the Audit Committee. Serving as the Chair of the Compensation Committee is also less common for Lead Directors compared to non-executive Chairs, with the Lead Directors in our sample serving in the Chair role only 17% of the time. The Nominating/Governance Committee has the inverse relationship, where Lead Directors serve as the Chair in the majority of instances (56%) which is significantly higher than their non-executive Chair counterparts.

Board Role

Prevalence Serving as Committee Chair




Non-Executive Chair




Lead Director





This information has compensation-related implications. For example, a question that periodically comes up during director compensation reviews, is for instances where the Lead Director also serves as the Chair of the Nominating/Governance Committee, is if the Lead Director should receive additional compensation for both roles, or just for the Lead Director role? Answering such questions in a data-based manner, in terms of both pay data and other relevant market/prevalence data, is best practice. Detailed information on pay levels and trends can be found in CAP’s annual CAPintel on non-employee director compensation here:


CAP shares findings from proprietary board of director compensation survey for private companies.

In this video, Bertha Masuda and Sue Schroeder provide a step-by-step guide on how to design a board pay program for privately held companies. Unlike their publicly traded peers, privately held companies do not have liquid stock. However, privately held companies need to have an attractive and competitive pay program in order to recruit and retain experienced board members. Bertha and Sue discuss the different board pay models and how to overcome private company challenges.

Compensation Advisory Partners (CAP) has analyzed non-employee director compensation programs among the 100 largest companies each year for 10 years. Over the past decade, the methods of compensating non-employee directors have changed in tandem with the time requirements, responsibilities, and reputational risk required of directors. The catalyst for change over this time period includes a variety of regulatory requirements, such as Dodd Frank, enhanced proxy disclosure rules, and increases in shareholder activism. This document reflects a summary of selected pay levels and pay practice trends over the last decade.

Key Takeaways

  • Total board compensation has increased 32.0%, or 2.8% per year on an annualized basis, over the past 10 years
  • Lead Director compensation has nearly doubled over the past 10 years
  • Committee Chair compensation for each major board committee has approximately doubled over the past 10 years
  • Fortune 100 companies continue to differentiate pay for Audit Chairs from Compensation and Nominating/Governance Chairs
  • 41% of companies paid committee-specific members fees in 2019, down from 58% in 2009

Bonnie Schindler and Susan Schroeder discussing the Executive Chairman role and its use in Succession Planning for private companies.

Each year CAP analyzes non-employee director compensation programs among the 100 largest companies. These companies can provide early insights into trends for compensation practices. This report reflects a summary of pay levels and pay practice trends based on 2020 proxy disclosure.

Key Takeaways

  • Lowest year-over-year increase in total board compensation in the last 10 years
  • Median retainer for Lead Director is now $45K, up from $35K in prior year

CAP Findings

Board Compensation

 pay levels remained generally flat again 

  • Total Fees. Board compensation continues to be in a steady state with low single-digit annual increases. Median is now $310K, up from $305K last year. This is the lowest year-over-year increase during the 10 years that CAP has been conducting this study. Despite a significant increase in time requirements for board members during 2020 due to implications of the COVID-19 pandemic, we do not expect to see increases to annual director pay programs during 2020. That said, pay will be up during 2020 at the limited number of large companies that have retained meeting fees as an element of their non-employee director compensation program.
  • COVID-19. 11 percent of companies announced pandemic-related temporary compensation reductions for directors, with most decreases only impacting cash compensation. In each of these cases, the company also announced a CEO salary reduction. 73 percent of these reductions were set to expire at the end of 2020, or sooner, while others did not specify a timeframe or stated “for the duration of the crisis.”
  • Pay Structure. Companies rely mainly on annual retainers (cash and equity) to compensate directors. Pay programs for large companies are simple and tend to not use meeting fees. We support this approach as it simplifies administration and the need to define what counts as a meeting, though it may not be appropriate in all situations. While workload varies from year-to-year, this “advisory fee” approach takes a long-term view of director compensation and time requirements.
  • Meeting Fees. Consistent with prior years, only 11 percent of companies studied provide meeting fees. Companies could consider having a mechanism for paying meeting fees if the number of meetings in a single year far exceeds the norm (“hybrid approach”). 5 percent of companies studied used this “hybrid” approach to meeting fees.
  • Equity. 95 percent of companies used full-value awards (shares/units) and only 5 percent used stock options (3 of the 5 companies granting stock options used both equity award vehicles). Almost all companies denominated equity awards using a fixed value, versus a fixed number of shares. Using fixed value is generally considered best practice as it manages the “target” value awarded each year. The timing of director equity awards is typically linked to the annual meeting of stockholders. As a result of this and the standard fixed value approach to equity award determination, the number of shares directors received this year, at many companies, was significantly greater than prior years given typically short-term pandemic-driven stock price declines.
  • Pay Mix. On average, total pay is comprised of 61% equity and 39% cash, which is consistent with findings over recent years.
  • Process: 19 percent of companies disclosed increases to board cash and/or equity retainers in their 2020 proxy. This represents a significant decline from the one-third of companies that disclosed increases last year.

Committee Member1 Compensation

 prevalence continues to slowly decline 

  • Overall Prevalence. 41 percent of companies paid committee-specific member fees for Audit Committee service, while only about a quarter of companies pay fees for other committee membership. Companies rely more on board-level compensation to recognize committee member (non-Chair) service, with the general expectation that all independent directors contribute to committee service needs.
  • Total Fees. Of the companies that paid committee member compensation, the median was $18K in total.

Committee Chair1 Compensation

 little/no change again 

  • Overall Prevalence. More than 90 percent of companies provided additional compensation to Chairs to recognize additional time requirements, responsibilities, and reputational risk.
  • Fees. Median additional compensation increased to $28K from $25K for Audit Committee Chairs and remained $20K for Compensation Committee and Nominating/Governance Committee Chairs.

Independent Board Leader Compensation

 pay levels continue to increase 

  • Non-Exec Chair. Additional compensation is provided by nearly all companies with this role. Median additional compensation was $235K. As a multiple of Total Board Compensation, total Chair pay was 1.75x a standard Board member, at median.
  • Lead Director. Median additional compensation was $45K, up significantly from $35K last year. Additional compensation is provided by nearly all companies with this role2. The differential in pay versus non-executive Chairs is in line with typical differences in responsibilities.

Pay Limits

 prevalence continues to increase 

  • 67 percent of companies have a shareholder approved limit in place for director compensation, up from 62 percent in the prior year.
  • 54 percent of limits apply to just equity-based compensation, compared to 60 percent last year. We anticipate that the prevalence of limits that apply to both cash and equity-based compensation (i.e., total pay) will continue to increase.
  • Director pay limits are in place largely due to advancement of litigation where the issue has been that directors approve their own annual compensation and are therefore deemed to be inherently conflicted.
  • Similar to last year, limits range from $245K to $3.76M, with a median limit of $750K. The limited group of companies that denominate the limit in shares tend to have a higher dollar-equivalent limit, with a median of $1.18M.
  • The limits are generally much higher than annual equity grants. Nearly one-third of limits are equivalent to more than 5x the annual equity grant.
  • Limit


    <= 3X annual equity


    3.01X – 5X annual equity


    5.01X – 7X annual equity


    > 7X annual equity


  • Some companies exclude initial at-election equity awards, committee Chair pay, and/or additional pay for Board leadership roles from the limit.
  • The higher limits above likely are intended to address the possibility of having to pay higher amounts to a non-executive Chair.

Some Changes CAP Suggests Companies Consider (Looking Ahead)

  • Recruiting New Directors. As boards look to refresh and diversify their membership, this may be the time to re-visit initial at-election equity awards for new directors. There has been a considerable “move to the middle” with director pay programs, and at-elections grants can be a way to differentiate your company’s pay program in the recruiting process without a broader, more costly, increase to standard director pay levels.
  • Board Leadership Roles. Taking on the role of non-executive Chair, Lead Director or Chair of a major committee can come with considerable time requirements, responsibilities, and reputational risk, yet additional compensation provided for most of these roles only reflects a modest premium on the standard director pay program. Providing greater additional compensation for the role of Lead Director of Chair of a major committee should be considered, in recognition of the typical time requirements, responsibilities and reputational risk individuals in these roles take on.
  • Stock Ownership Requirements. Many boards, especially among the largest companies, require equity-based compensation be deferred until retirement (i.e., termination of board service). While we support alignment of director and shareholder interests through equity compensation, a standard stock ownership guideline (e.g., multiple of annual cash retainer) may be a competitive advantage when recruiting new directors who may be more focused on current compensation.

Appendix: Historical 3-Year Look

Range between 25th and 75th percentilesMedian Value

Total Board Compensation ($000s)3

$280 $285 $293 $300 $305$310$328 $334 $334 $250$300$350201720182019

Additional Compensation for Independent Board Leaders ($000s)

$30 $30 $35 $35$35$45$50 $50 $50 $20$30$40$50201720182019$200 $188 $200 $233$225$235$275 $288 $258 $125$175$225$275$325201720182019Lead/Presiding DirectorsNon-Executive Chairs

1 Audit, Compensation and/or Nominating and Governance committees.

2 Excludes controlled companies. Also excludes instances where Lead Director role is assumed by Chair of Nominating and Governance Committee, who receives compensation for the role.

3 Total Board Compensation reflects all cash and equity compensation for Board and committee service, excluding compensation for leadership roles such as committee Chair, Lead/Presiding Director, or non-executive Board Chair.

Compensation Advisory Partners (CAP) assessed human capital actions taken by companies in the Consumer Staples sector in response to the COVID-19 pandemic. Key findings include:

  • The Consumer Staples sector was moderately impacted by the COVID-19 pandemic, with 36% of companies in the S&P 1500 taking human capital actions.
  • Food and Staples Retailing companies reported the most actions – many of which were positive for employees: expanded paid time off and health care benefits, one-time bonuses and additional pay for on-site workers, and workforce expansions
  • The five most prevalent human capital actions by the Consumer Staples sector are additional payments for on-site employees (non-executives), expanded benefits programs, one-time bonuses for non-executives, furloughs of employees, and workforce expansions.
  • Only a handful of companies in the sector reported executive salary reductions:
    • Median salary reductions were 28% for CEOs and 25% for other executives.
    • For boards of directors, pay was cut by a median of 50%.

The PDF of the report provides additional data for the Consumer Staples sector.
The human capital actions that CAP is tracking include pay cuts; changes to annual and long-term incentives; furloughs; workforce reductions; suspended 401K matches; enhanced health and welfare benefits; additional pay for frontline workers; pay continuity; and workforce expansions. CAP will continue to monitor corporate public announcements of COVID-19 actions.

Upcoming Events See All

Jun 25, 2024

2024 Proxy Season Review

New York, NY

A comprehensive review of the 2024 proxy season, exploring emerging trends, notable shareholder proposals, and regulatory developments. With a focus on corporate governance, executive…
  • Shaun Bisman
  • Chris Callegari

Jul 16, 2024

What Private Companies Need to Know to Design Effective Incentive Plans

Boston, MA

In this session, we cover the strategies effective private companies employ to ensure incentive plans support the company’s strategic objectives and culture, are competitive…
  • Shaun Bisman
  • Susan Schroeder