Board directors go from glitz to grind

Board directors go from glitz to grind
Mon Mar 9, 2009 3:41pm EDT
By Toni Clarke - Analysis

Excerpts:

"My first question when advising potential directors is, 'Are you sure you want the job?'" said Nixon Peabody's Stein. "Board service is no longer fun."

BOSTON (Reuters) - Once seen as a sinecure, the reward for a lifetime of achievement, the job of a board director has become decidedly less appealing.

Based on proxy data as of May 31, 2008, the average annual cash retainer for directors of Standard & Poor's 500 companies was $75,000, according to executive recruitment firm Spencer Stuart. Stock grants and options brought the average package to more than $217,000.

But for the most part, directors are not being reimbursed for the hundreds of extra hours they are working throughout the current crisis, said Todd Leone, president of Amalfi Consulting LLC, which specializes in designing compensation packages for financial institutions.

A job that might once have consumed one or two hours a week now consumes many more, experts say.

"A year or two ago, boards might look at reports on a quarterly basis," said Ralph Ward, publisher of Boardroom Insider, an online governance newsletter. "Now they want to see data on a weekly or bi-weekly basis, especially basic survival data such as cash flow, cash on hand and reports on defaults from customers and suppliers."

"The liability exposure is not worth the money," said Richard Stein, a lawyer with Nixon Peabody LLP. "Insurance may protect you against financial damage, but it can't protect your time or reputation."




Read Full Article: http://www.reuters.com/article/newsOne/idUSTRE5285YP20090309
***********************************************************************
This posting was made my Jim Jacobs, President & CEO of Jacobs Executive Advisors. Jim also serves as Leader of Jacobs Advisors' Insurance Practice.