Downward trend in salary increases for non-executive directors continues in 2007

Salaries for non-executive directors have increased by 6% in 2007, but the increase is one-third less than in 2005, research has found.

An annual guide issued out by business services supplier PricewaterhouseCoopers (PwC) found that the increase in fees for directors and chairmen has declined from 12% in 2006 and 15% in 2005.

The report, which questioned 183 organisations across all sectors, found that companies paid more attention to the performance and effectiveness of a non-executive director, as three-quarters of respondents employ some kind of effectiveness monitoring, while half of respondents have training programmes in place.

The 2007 Non-Executive Director Practice and Fees report also found that the percentage of female chairmen, deputy chairmen and other directors has doubled in the past eight years from 8% to 15% in 2007.

Sean O’Hare, partner at PwC, said: “Results suggest that the rate of fee increases has slowed while the duties expected of non-executive directors continue to increase. The role of the chair of the remuneration committee is widely understood to be becoming more onerous and it will be interesting to see if this increases in future years.

Data was also taken from annual reports of about 1,500 quoted groups and organisations.

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