What does a board seat really cost shareholders?

The cost of governance

Most large public companies maintain boards of 7 to 13 independent directors. Each director receives annual compensation, typically a mix of cash retainers and equity awards. The total bill for the full board can reach into the millions.

Note: The figures on this page come from the director compensation table in each company's proxy filing. This table covers non-employee directors — executives who also sit on the board (like the CEO) are reported separately in the executive compensation tables and are not included here.

At first glance, board pay looks modest compared to CEO compensation. The entire board often costs less than a single CEO's annual package. But the comparison that matters for most Americans is different: how does the total cost of a company's board compare to what its typical worker earns?

Board pay vs. the median worker

Federal law requires public companies to disclose their CEO-to-worker pay ratio. We use the same median worker compensation figure to calculate a board-to-worker ratio: how many years of median worker pay does the entire board cost?

What you get for the money

Directors typically attend 7 or more formal board meetings per year, plus committee meetings, strategy sessions, and ad hoc calls. They bear legal liability, reputational risk, and fiduciary duty to all shareholders.

Whether the price is right depends on what the board actually does. A board that rubber-stamps executive pay packages is expensive at any price. A board that challenges management, demands accountability, and protects minority shareholders can be worth every dollar.

The rankings below let you compare board costs across companies and judge for yourself.