updated 16 January 2023
Women on Boards is often asked whether you can you make a living out of directorship. As with most things about directorship, the answer is not simple. So what remuneration can you expect as a director?
Typically, director remuneration paid to a board is the same for each board member plus additional fees for committee work done. The Chair usually receives a higher fee.
Unlike executive remuneration, which can vary widely between roles, all directors on a board receive the same base fee and the same fee for their committee roles.
How is renumeration set?
Director remuneration is usually set at the AGM and remains unchanged for a number of years as boards are reluctant to ask shareholders for a pay rise too often. Shareholders can be resistant to director remuneration increases. The remuneration agreed at the AGM is usually a total amount, which gives some flexibility to accommodate new appointments or additional committee roles.
What are directors remunerated?
- Listed companies
- Director rem is available in the annual report at the remuneration report section.
- Remuneration is usually based on company size, as measured by the market capitalization of a company. This means a top 50 director will receive more than the next 50 companies etc.
- Private companies
- Information about private companies and their director remuneration is not readily available but generally they follow the listed model; with rem based on company size.
- Government entities
- The information is available, but some jurisdictions require determination to find and interpret it. NB – WOB covers this in the Govt Marketplaces workshop
- The easiest to navigate is federal government boards -see https://bit.ly/3F6VaJy
- Not for profit paid or unpaid
- Information is not readily publicly available.
- Ask WOB if you need some guidance
- Startups
- Not readily available but there are standard approaches.
- These is no remuneration, shares only, a mix of cash and shares, issue of options
Director remuneration is taxable, so consider your tax position if you are issued shares.
Director Remuneration Guide
|
Entity |
Market cap |
Rembase level |
| Listed – large |
ASX1: Comm Bank |
$166B |
$242,000 avg |
| |
ASX186: Bapcor |
$2.3Bb |
$135,000 (avg for Chair + 5 NEDs. Excludes Superannuation) |
| |
ASX288: Appen |
$1.17B |
$105,000 |
| Listed - small |
Bluechiip BCP |
$30m |
$40,000 |
| |
Hexima HXL |
$50m |
Small rem plus options |
| Government |
Australia Post |
|
$97,000 |
| |
Australian Sports Commission |
|
$47,000 |
| |
Climate Change Authority |
|
$30,000 |
| Private companies |
Various |
|
See equivalent sized listed company; with a small discount |
| NFP Paid |
Seen in 2021 |
|
$10,000 - $50,000 |
What does it take to make a living out of directorship?
An interesting way to view director remuneration is look at it as a daily rate and compare this to the consulting rate.
A board portfolio of 3-4 paid roles, including a voluntary role plus other activities could well fill your dance card. When putting your ideal board portfolio together, consider if, say, three mid ranking roles at $50,000 pa make it viable for you.
Perhaps you have a start-up / early-stage entity in your portfolio. This is like a long odds lottery ticket – very low odds of a large reward; but we can dream. To enable dreaming, below are references to the articles about ‘interesting companies’ written over the last couple of years. None have yet made a fortune.
Find out more
Listen to Ruth’s SNAP Vacancy recording, ‘Noah’s Ark’
here , where she discusses a wide range of vacancies offered on the WOB jobs board, ranging from well-paid ASX roles to unpaid startups and not for profits.
References
Gender Diversity on Boards at
https://www.womenonboards.net/resources/boardroom-diversity-index
Market Index
https://www.marketindex.com.au/asx-listed-companies