Middle Market Companies See Board Pay Rise; More Women Directors

Madeline O’Connor
Bliss Integrated Communication
(646) 576-4113
[email protected]


Chicago, IL — Pay for board directors at middle market companies increased 3% between 2017 and 2018, according to The BDO 600: 2019 Study of Board Compensation Practices of Mid-Market Public Companies. The increase reflects an uptick in board retainers and fees (up 4%) and a continuing trend toward the award of full-value stock awards (up 4%), countered by the declining use of stock options and committee retainers and fees (down 12% and 6%, respectively).

“Companies are responding to pressures about board pay from investors and other stakeholders,” said Tom Ziemba, a managing director in the Compensation Consulting practice at BDO. “We’re starting to see a shift away from committee retainers and fees to help simplify board pay. Criticism of stock options have pushed more companies toward using performance-based pay; but it too has recently come under fire.”

Fiscal Year

Board Retainers & Fees

Committee Retainers & Fees

Total Equity Pay

Total Compensation











% Change





Gender Diversity on Boards
In addition to compensation practices, the analysis by BDO USA, LLP, also examined key board trends including term limits, board structure, stock ownership guidelines, and representation of women on boards. The report shows signs of progress in board diversification between 2017 and 2018, with more women on boards:

  • More companies report having at least one woman on their board in 2018 (89%) than in 2017 (82%). This shift was especially noteworthy among smaller companies, where 80% had at least one female board member, compared with 70% in 2017.

  • In particular, energy companies made notable progress during this period. While they still have the lowest levels of female representation on boards, 73% reported have at least one female board member in 2018, compared with 63% the year prior.

Still, women remain sorely underrepresented; among the 600 companies that BDO analyzed, women comprise only 19% of the total board population. Very few companies (only 7%) have boards where women make up at least one-third of its members.

“Board member gender diversity has become a high priority as pressure escalates from shareholder activists, legislators, and regulators. While progress is coming slowly, I do expect we’ll see the picture shift even more dramatically in next year’s analysis.” said Amy Rojik, National Assurance Partner and director of BDO’s Center for Corporate Governance and Financial Reporting.

Healthcare Board Members are the Most Highly Compensated
For the first time in the history of this survey, healthcare companies took the lead in issuing the highest pay for board members – with average total compensation at $233,331, rising 6% year-over-year. Technology board members followed closely behind at $230,621, staying level with the prior year. Board directors at financial services – banking companies continue to have the lowest pay average, receiving roughly one-fifth that of healthcare board members. On the plus side, banking directors saw the biggest year-over-year increase in pay, jumping 9%.

Equity-based pay follows a similar pattern, comprising the largest percentage of pay for healthcare and technology board members, and the lowest percentage for banking board members. The biggest annual increase in equity-based pay was in healthcare.

Fiscal Year




Real Estate



FS - Nonbanking

FS - Banking



















% Change









Company Size Influences Pay
Unsurprisingly, board members of the largest companies in our analysis were paid the most – and saw the largest increases (up 3%). This positive correlation between company size and compensation levels has been consistent throughout the history of the study. Pay remained flat for the smallest companies. Across all groups, the pay mix was fairly consistent, with stock awards the preferred method of equity-based pay.

Other Key Findings

  • The median total board fee paid among all companies in the study was $1.3 million.

  • A board chairperson is typically paid approximately 30% more than a regular director. On average, a lead director is paid about 10% more than a regular director.

  • More than half (53%) of the companies have a non-employee chairperson.

  • Term-limit data was disclosed by 59% of companies; among those providing disclosures, only 3% reported having term limits. The average term limit was 13.5 years.

  • Almost two-thirds of companies have director stock ownership guidelines.

Read a more in-depth data and insights from The BDO 600: 2019 Study of Board Compensation Practices of Mid-Market Public Companies.

*Material discussed is meant to provide general information and should not be acted on without professional advice tailored to your firm’s individual needs.

About the BDO 600: 2019 Study of Board Compensation Practices of Mid-Market Public Companies
The BDO 600: 2019 Study of Board Compensation Practices of 600 Mid-Market Public Companies examined the compensation practices of publicly traded companies in the energy, financial services – banking, financial services – nonbanking, healthcare, manufacturing, real estate, retail, and technology industries. Companies in the six non-financial service industries in our study have annual revenues between $100 million and $3 billion. Companies in the two financial services industries in our study have assets between $100 million and $6 billion. Data sources include data provided by Salary.com and public company data collected from proxies and other sources.

About BDO’s Global Employer Services Practice
BDO’s Global Employer Services practice consists of an experienced and dedicated team of professionals who are committed to assisting leadership and boards with developing strategies and compensation programs designed to attract, retain, and reward the executive team.  Our services include designing and benchmarking executive compensation programs including cash- and equity-based programs, board remuneration, board and executive talent reviews, compensation committee development, non-qualified and deferred compensation plans, advising on tax and accounting issues, and other related services.

Our services are tailored and scalable, designed to accommodate the unique needs of public, private, and nonprofit clients of all sizes and across all industries including multinational Fortune 500 companies.

BDO is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, and advisory services to a wide range of publicly traded and privately held companies. For more than 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The firm serves clients through more than 60 offices and over 700 independent alliance firm locations nationwide. As an independent Member Firm of BDO International Limited, BDO serves multi-national clients through a global network of more than 80,000 people working out of 1,600 offices across 162 countries.
BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. For more information please visit: www.bdo.com.