By Tim McLaughlin
BOSTON (Reuters) – It's good work if you can get it done.
Average annual compensation for non-executive directors of S&P 500 companies rose 2 percent to $ 304,856 last year, topping $ 300,000 for the first time and 43 percent higher than 10 years ago, according to a new report released by executive headhunters Spencer Stuart.
But thanks to the stock grants, someone earned a lot more than that.
Directors of biotechnology company Regeneron Pharmaceuticals Inc received an average of $ 1.2 million in damages last year. This figure includes no more than $ 6 million received by Regeneron's independent chairman, the company's disclosures show.
And the non-executive directors of Wall Street Power Plant Goldman Sachs Group Inc earned an average of $ 599,279 in 2018, the highest for a financial company in S&P. However, this was down from $ 604,837 in 2017. The Investment Bank, which had 13 board meetings last year, declined to comment beyond disclosures in the proxy statement.
The S&P 500 boards met on average only 7.9 times, in person or over the phone, during 2018. It's down from 9 a decade ago, according to Spencer Stuart.
The larger payments are made at a sensitive time for Corporate America. A top contender for the 2020 Democratic presidential nominee, Elizabeth Warren, has the board room on her mind as she seeks to tackle inequality in American society. In addition to proposals such as wealth tax aimed at billionaires, Warren has suggested that workers in US companies elect at least 40% of board members.
Warren's campaign declined to comment.
Investors also have an increasingly feisty view of board members' compensation, which is typically set by the board itself. An increasing number of shareholder cases are challenging compensation packages for large tickets.
As a result, more companies are expected to put these issues to shareholder voting at the company's annual meetings, said Paul Hodgson, a compensation expert and senior adviser at ESGuage, a data management and analysis company.
"There is some nervousness in companies about what they pay board members," Hodgson said. "More attention is being paid to yielders than before."
Compensation limits are also becoming more widespread, with advisory firms Institutional Shareholder Services and Glass Lewis supporting claims by some shareholders, according to global risk advisory firm Willis Towers Watson.
A study by the company found that the number of companies with an annual compensation limit for board members increased to 63% in 2018 from 55% the previous year.
For some, being a director can mean doing as little as attending regularly scheduled meetings.
However, the board's experts say the job can be much more demanding than that. The National Association of Corporate Directors estimates that directors commit at least 250 hours a year to their responsibilities.
A director can visit the company's factories and offices, read and comment on background documents, and is often involved in the board's committee work. For example, Regeneron Director Christine Poon attended 21 meetings last year, including 10 as members of the Compensation Committee.
Directors of software developer Roper Technologies Inc, who received an average of nearly $ 910,000 in 2018, attend at least 15 days of board meetings a year, according to the company's filing. This works out to over $ 60,000 per day.
Roper says the compensation reflects their contribution to the company's superior performance – a cumulative return of 1,084% over the past 15 years, compared to the S&P 500's 207%, according to the attorney.  Roper did not return emails and calls seeking comment.
Some companies are proud to be miserable. Microsoft Corp. founder Bill Gates received just $ 3,300 last year for his work as director of Berkshire Hathaway Inc, run by fellow billionaire Warren Buffett.
And directors at fashion company Ralph Lauren Corp received nearly all of their cash wages in 2018, earning much less than peers, drawing only $ 107,299, according to Spencer Stuart. At some companies, there is a delay in giving directors full benefit of their service. This is the case with Goldman, whose directors do not receive shares from their limited stock grants until they retire.
Smaller, lesser-known biopharmaceutical companies can offer the largest compensation packages.
Vertex Pharmaceuticals Inc awards a limited $ 400,000 share grant to directors who vest after one year. That's the key feature of a package that averaged $ 613,128 per director last year. Vertex did not return messages seeking comment.
Regeneron Chairman Roy Vagelos received $ 6.35 million in 2018, benefiting from large stock prices, down from $ 11.8 million in 2017.
Regeneron, known for eye disease medicine, held six board meetings in 2018. Vagelos, a former CEO of Merck & Co Inc, attended all of these as well as three technical committee meetings.
"The quality of our board is second to none – over half of our board members are members of the National Academy of Sciences and two of our directors are Nobel laureates," said Regeneron spokeswoman Alexandra Bowie when asked about the compensation
However, Regeneron agrees to reduce the CEO's salary as part of a settlement with investors who sued the company, which claimed that Vagelos and other directors received excessive compensation.
A new compensation plan in effect this year has resulted in a reduction in the reported value of dir ector stock prices on the day they were allotted. It is likely to begin to be reflected in numbers in 2019.
Pharmaceutical company Incyte Corp, whose average board members earned $ 493,657 in 2018, also considered how it structured board members' compensation after prompting investors to push back.  Incyte eliminated grants that determined the number of shares granted to board members at the same level each year. As the shares climbed, this immediately gave them an annual vintage.
The company now provides annual share premiums based on a target value of dollars. Incyte also wound up an improved initial allocation of shares for new board members.
"These changes make the board's compensation consistent with other companies," said Incyte spokeswoman Catalina Loveman.
(Reporting by Tim McLaughlin; Editing by Martin Howell)