Financial directions - Non-exec fees static, work increasing.

(From Financial Director)

Byline: Kevin Reed.

The Independent Remuneration Solutions (IRS) Independent Director Survey, in association with 3i, surveyed 950 NEDs across a range of companies and sectors. It found that non-exec chairmen of large companies (GBP 1bn+ turnover) are on average paid between GBP 150,000 and GBP 200,000 a year, while other NEDs are paid between GBP 35,000 and GBP 40,000.

Chairmen of smaller companies (up to GBP 10m turnover) are on average paid between GBP 35,000 and GBP 40,000, while NEDs are paid GBP 15,000 and GBP 20,000.

One-half of respondents reported fee rates in 2002 as "fairly static" and the report believes the problems UK companies have suffered over the past two years has resulted in modest or non-existent pay increases for NEDs.

The study finds respondents on the boards of large companies have started to report on fee rates they receive for work on audit, remuneration and nominations committees due to the increasing govern- ance environment in these areas.

The majority of NEDs in smaller companies hold options in those companies, while overall about one-third of NEDs hold shares in their company. IRS believes many more NEDs are being encouraged to purchase a shareholding.