How much do UK Non Executive Directors get paid?

FTSE Committee Fees

Most companies (95%) reward non-executive directors with an additional fee if they chair or are a member of the audit or remuneration committee. (The only exception is for the chairs of nomination committees who also chair the main board: they do not receive an additional fee for chairing the nomination committee.)

The average fee for chairing an audit committee is £25,035, similar to last year’s average of £24,976. The fees range from £80,000 to £5,000. Sixty per cent of companies offer an audit committee member fee, at an average of £15,424, a minor decrease (3%) compared to last year’s average of £15,879.

Remuneration committee fees for both Chairs and members increased only slightly. Chair fees went from £21,937 in 2020 to £22,117 in 2021 (1% increase), and member fees went from £13,475 in 2020 to £13,812 in 2021 (2% increase).

Private Company Director Remuneration

According to Dynamic Boards defining the remuneration of private companies’ board directors is difficult. Commonly, anything upwards from £3,000 up to around £50,000, or more for much larger companies. 

Private companies are more likely to appoint Board Advisers (rather than appointing them as legal directors) and these too can vary hugely in pay – anything from £2,000 upwards.

Start-Up Board Remuneration

Some start-ups might offer a mix of remuneration, such as a low level of directors fees and in addition, may offer shares in the company. Early-stage businesses, particularly those with external investment, (e.g. angel investment or early-stage VC), may consider seeking a Board Advisor rather than a Non-Executive Director.

Charity Trustee Remuneration

Trustee roles are typically unpaid (only one in 10 are – and not very much), although many charities do pay for trustees’ expenses or pay trustees for certain services rendered. However, this is strictly governed and certain requirements have to be met for this to happen.

There are some common exceptions though:

• • Housing Associations now typically pay their board members – anything from £3,000 a year up to more than £20,000 for chair roles of large associations.
  • Pension Trusts’ director’s fees were an average of £20,000 per year in 2019.
  • Investment Trusts paid their non-executive directors an average of £30,000-50,000 in 2020. 
    NHS Trusts and Foundation Trusts all have boards of non-executive directors. At the moment (in 2021) NHS Trusts have a fixed pay of £6,157, which is set by the Secretary of State. NHS Foundation Trusts set their own pay, meaning a much greater variation – ranging from £7,000 to £21,000 for non-executives. By 2022 all NHS trusts and foundation trust board members will be paid £13,000 a year. 

Is the remuneration worth it?

For some, these figures seem that UK non-executive directors get paid a lot of money for part-time roles. What one needs to consider is that none of these roles is without risks. The risks the UK directors face include: Financial; Legal Limited Control; Time; and Reputation Read the full article here

In Summary

Whilst people pursue board appointments for a wide range of reasons it is useful to know how much you might get paid. For many, you will soon recognise that a board appointment is not the financial gold mine you might have thought it would be. Most people don’t pursue a board appointment for the money. Rather, they recognise the wider benefits, want to give back, or recognise that operating at board level is where they can be most effective.

Despite the risks and dubious financial benefits, board appointments remain highly aspirational for many. Indeed, for every individual who says ‘no’ to a board appointment, I can guarantee you that there are 10, 20, or a hundred more who will take it if offered to them instead. So, if you desire a board appointment you need a plan. Board Appointments can help and perhaps the best way to start is to attend one of our Virtual Board Search Events.