Average increases dropped from 17.8 percent to 6.1 percent in 2005, study says.
Pay to corporate directors grew last year at a slower rate than in 2004 as boards absorbed rules changes brought about by accounting scandals, a new study by Mercer Human Resource Consulting shows.
The study, released on Monday, said corporate directors received an average 6.1 percent increase in compensation in 2005, versus a 17.8 percent rise in 2004. That compares with a 5 percent boost for chief executives and an average 5.5 percent rise for workers at private companies across the nation last year.
“Back in 2002, when Sarbanes-Oxley came into being, there was a tremendous amount of pressure to do a lot more work, especially the audit committees,” Mercer Senior Compensation Consultant Peter Oppermann said. “They were actually putting time in on corporate governance issues. That’s really what drove the major increases.”
Pay growth has slowed since then, Oppermann said, falling sharply as duties stabilized. “What directors have been doing has changed dramatically,” he said. “I think that change has slowed quite a bit.”
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