2022–2023 Director Compensation Report

In brief: The National Association of Corporate Directors is proud to present its 24^th annual Director Compensation Report in partnership with leading compensation consultancy, Pearl Meyer. This report is designed to help corporate directors by

• benchmarking director compensation levels and practices across a range of industries and company sizes for ease of comparison,

• identifying compensation trends and innovations, and

• offering in-depth analysis of selected trends or areas of focus.

The appropriate compensation of nonexecutive directors is an important element in the overall governance of all corporations. Effective director pay programs align the interests of directors with those of shareholders, rewarding their contributions to the effective direction and control of the corporation. This year's report shows a moderate increase in total compensation and a continuing decline in the use of meeting fees.

A related publication, 2022–2023 Director Compensation Report: Summary Statistics, is available from Pearl Meyer and provides additional data on director compensation by industry and company size. For further information or compensation consultation, please contact Pearl Meyer by emailing nacddirectorpay@pearlmeyer.com.

Most relevant audiences: NACD member corporate directors, compensation committee members and chairs, compensation analysts, proxy advisors, academics, and corporate governance and compensation advisors

The focus on the board’s compensation committee has never been sharper. The components of compensation plans and the link between compensation and company performance are under intense scrutiny from shareholders, employees, policymakers, the media, and other stakeholders. The Report of the NACD Blue Ribbon Commission on the Compensation Committee revisits NACD’s 2003 Report of the NACD Blue Ribbon Commission on Executive Compensation to highlight the new environment in which compensation committees—and, more broadly, boards—are now operating. It recommends that the compensation committee and board work together to establish an executive compensation philosophy that supports the company in creating long-term, sustainable value.

The report includes ten specific recommendations for compensation committees to consider when evaluating their compensation philosophies. It also provides practical tools, such as sample compensation committee charters, a compensation committee assessment, and guidance on executive employment contracts.