CSCS Request for Assistance

Transcription

1 A Large Corporation asks: 1. I'm wondering how others handle compensation for two-day board meetings. Are directors compensated for one meeting fee covering both days or are they compensated for each day. 2. When Board and Committee meetings are on the same day, are directors compensated for both the Board meeting and also the committee meeting? 3. When non-member directors voluntarily attend committee meetings as observers, are they compensated for their attendance? Member Info Response Medium Not-for- Profit 1. Directors are compensated for each day of a two-day meeting. 2. We have a meeting fee and a daily maximum meeting fee, so if directors attend multiple meetings in a day they can be compensated for each meeting up to the daily maximum. 3. If the non-member director has been invited to attend the committee meeting, then we would compensate them for their attendance. Large Credit Union 1. If a meeting is scheduled to take place over 2 days, our directors are compensated for meeting on both days (ie, 2 days compensation). Ours is a meeting fee not a per diem. 2. Directors are compensated for each meeting they attend. If a director is a member of 2 committees meeting on the same day, they are compensated for each meeting. 3. Directors may attend meetings of any committees, regardless of whether they are a committee member. However, if they attend to observe, they are not compensated for a meeting fee. If they are requested to attend as a guest to address an issue, they are compensated with a meeting fee. 1

2 Medium Crown corporation 1. Members are compensated with a per diem for each full or partial day of meeting, as well as one per diem for a day of travel if travel is not on same day of meeting. For example, for a two-day meeting, a director would receive 4 per diems: 1 for travel to the meeting site if location is other than place of residence, of course, 2 for the meeting, 1 for travel home. 2. Members receive only one per diem per day, regardless of how many meetings they attend on the same day. 3. Voluntary non-committee members may attend meetings as observers but they will not receive a per diem. Summary: one per diem is the maximum that a member can receive for a day. Regardless of length of meetings, full per diems are given (not half, or quarter), the exception being meetings held by teleconferences. In this case, members would receive a full per diem after they participate in 4 teleconferences. Small Governance consultancy There are no hard and fast rules around this. It is up to the board to develop a set of guidelines that it feels are fair, that reflect the values of the company, and that encourage efficiency, productivity, and conscientious governing by the board. These agreed-upon guidelines can reflect best practices in other companies and they must align with a reasonable board budget. Ideas for guidelines might be as follows: 1. Length of board meetings How much time does the board need to conduct its board work? The board may agree that board meetings will take only one day, and they will design their agenda and direct their chair to meet that goal. If the meeting takes longer, the board will agree that there is a valid need to stay longer and there will be compensation for an additional day or half day at a set amount. If there is sufficient board business that meetings are of two days duration all or most of the time, then the meeting fee should be appropriately adjusted. 2. Board meetings and committee meetings these are two separate functions and should be compensated as such, whether the meetings are on the same day, or at separate times. This assumes that the work of the committee 2

3 complements and supports board work and is not a duplication of efforts. If these meetings are held on the same day, is there sufficient time to prepare a committee report for the board and for the board to properly digest committee findings or recommendations? 3. Voluntary attendance at board meetings committees generally comprise a small number of people with an interest in and/or experience in the work of the committee. They are set up as such so that they can be efficient and productive. If visitors are allowed or encouraged there needs to be an understanding of their role and the value they add. Non-committee member directors may be invited to attend a particular meeting of a committee because of a special expertise they have, in which case they should be compensated. Or directors may be permitted, or even encouraged to attend a committee meeting on a voluntary basis as a means to learn more about that area (audit for example), and they could be compensated for one such meeting per three year director term. Any other voluntary attendance is unpaid, unless the board agrees that there is a valid reason for attendance. The directors can remain informed of the work of the committee through meeting agendas and minutes of committee meetings. Questions to ask generally of the board as it develops the foregoing policies: Is the board doing board work or management work? Is the board productive during its board and committee meetings? Is the agenda set up to ensure efficient meetings? Is the chair managing board performance? Does the board regularly evaluate its performance as a board and committees? 3

4 Small Crown corporation 1. Our Directors are compensated for each day based on for the length of meeting: 0-4 hours, 4-8 hours and over 8 hours; for a two-day meeting, the length of each day would be considered e.g. Day 1-8:00 5:00 = 9 hours would be paid a > 8 hr rate; Day 2-8:30 3:00 = 7.5 hrs would be paid at 4-8 hr rate. 2. When Board and Committee meetings are on the same day; the time is calculated based on the length of the day; for Committee meetings, Committee Chairs are compensated at the Chair rate for the meeting; this time is prorated based on the total length of the meeting 3. The situation of non-member directors as observers does not arise. However, we do have incoming Board Directors as observers at meetings prior to their term commencing; they are not compensated for meeting time but do get their expenses covered. Large publicly issuer 1. Generally, pay fees for 2 days. 2. Yes, compensated for both committee & board meetings. 3. No fees for voluntary attendance. Large public 1. We pay 2 meeting fees 2. Yes, we pay per meeting whether board or committee on same day 3. Generally no, but would consider if there was a particular reason requiring non-member attendance Medium private company 1. We have a "door to door" per diem for Board meetings which covers travel and meeting. 2. Directors are compensated for the Board meeting per diem, which is larger than the committee meeting per diem. 3. Not applicable because of (2), above and because our committee meetings are typically held concurrent with Board meetings, so any non-member of a Committee will already be receiving the Board meeting per diem. For any Committee meeting that is held off quarter, we would not compensate nonmembers for their attendance, unless their attendance was specifically requested by the Committee or Board Chair. 4

5 Large Crown Corporation 1. They are compensated for one meeting. 2. Yes, Board members are compensated for each Board and committee meeting they attend even if they are on the same day. 3. We do not pay directors who are not members for attending to observe meetings. Large company publicly 1. We have not had two-day board meetings in last while, but would expect to pay for each day. 2. We pay for each meeting separately. 3. No. Medium wholly owned subsidiary of UK parent 1. If meeting is adjourned at end of day 1 and reconvened at start of day 2 that would be one meeting and probably one fee. May require discussion with CEO and/or Board Chairman to determine how directors should be paid. 2. Yes, directors are compensated for the Board meeting and all Committee meetings held on the same day. 3. No, but would be reimbursed for travel expenses. Medium not-forprofit society 1. We pay one meeting fee per day. 2. Yes, but typically we do not schedule on the same day. 3. No compensation to observer directors at committee meetings. Small Private company 1. We have a director s compensation program, which is approved by the Board, where we detail the compensation received per type of meeting. Comp for 2-day meetings should be addressed in that document, but I would think failing this, directors should get paid twice as much for a 2-day meeting as a 1-day. 2. Yes, they get paid separately for each meeting (Committee and Board) that they attend. For telephonic attendance, the fee is 1/3 of the in-person attendance fee. Where we hold a joint committee-board meeting (when have limited time and want recommendation of committee before Board decides resolutions), only 1 fee is paid. 3. No, unless they attend at our request, only those directors that are committee members are compensated (although we may pay for incidental expenses). 5

6 Federal crown corporation Directors are compensated on a per diem basis ie a daily fee regardless of the number of meetings or their length on the condition that they be present. Therefore for a two meeting session, 2 per diems. When Board and Board committees are on the same day, see aboveone fee- regardless of number of meetings Directors who attend committee meetings as observers are not compensated Other bits which may be of interest. Directors who are appointed committee Chairs receive extra remuneration. All Directors receive an annual stipend. This is an amount they receive whether or not they attend meetings Large Insurance (not for profit) 1. Directors are compensated for each meeting that they attend. We usually have Committee meetings on the first day and morning of second with Board meeting held the remainder of 2 nd day. 2. Yes, Directors are compensated for both Board meeting and any committees they sit on. Compensation will also vary if they attend in person vs. via conf call. 1. No, non-member directors are not compensated for observing, only if their attendance has been requested specifically, otherwise they are a guest. Medium not-forprofit regulator 1. Our fee schedules specifically provides for these situations. It provides for payment of a daily rate so a two day meeting would attract two daily fees. 2. The fee schedule also provides for a daily limit so where there is more than one meeting in a day, the daily limit would apply. The daily limit is equal to one and a half times the regular daily fee. 3. We do not pay directors who voluntarily attend meetings. To be paid thy must be a member of the committee or be asked to attend to participate in all or a portion of the meeting. 6

7 Large Publicly 1. When there is a two-day board meeting (such as a strategic planning session) our directors are compensated for one meeting, covering both days. 2. When Board and Committee meetings are on the same day, our directors are compensated for each committee meeting they attend as a member as well as for the board meeting. 3. When non-member directors voluntarily attend committee meetings as observers, they are NOT compensated for their attendance. Large, issuer based Publicly Traded 1. if the meeting is adjourned and reconvened on the following day, the directors are paid for one meeting. If the meeting is terminated and another meeting called, the directors are paid for two meetings. 2. We pay the director for each meeting attended even though the board and committee meeting may be on the same day. 3. A director who sits in on a meeting of a committee that they are not a member of is not paid for attending that meeting. Small junior mining issuer on TSX We pay independent directors a monthly fee. The Chairman of the Board and the Chair of each committee receive an additional monthly fee. Large Publicly company The Directors of our company are not paid meeting fees. They are paid an annual flat fee which includes some stock-based compensation (either shares or DSUs), some cash (the % they receive in cash depends on whether they have already met their shareholding requirements) and travel fees. But no meeting fees. Large Publicly All of our directors are paid quarterly directors fees and it covers attendance at all meetings (committee and director), both required and observed. Generally, the directors prefer to observe in other committee meetings for informational purposes and do not ask for additional compensation. 7

8 Large Publicly, TSX, NYSE 1. It depends how the issuer structures its director compensation. Some issuers have adopted a flat fee arrangement, others, such as our company, pay an annual retainer for the Board and each committee, as well as per meeting fees. In our case, two-day meeting would be out of the ordinary. It has happened in the past however. When the meeting begins on one day, is adjourned, and continues the following day, and is minuted that way, the fee payable to the directors is for a single meeting. So the directors participating would receive only one meeting fee. If the meetings were called as separate meetings and minuted that way, then an attendance fee would be paid for each meeting. 2. In our case the answer is yes since there is an attendance fee for the Board, and one for each committee meeting. 3. This has rarely occurred in our case, and in the few cases where it did happen, the director was not compensated. If it happened on a regular basis, I would expect that it might be taken into account when directors compensation came up for its annual review and it is conceivable that an attendance fee would become payable in such cases, but likely only for meetings taking place after the remuneration policy was changed. Medium Publicly Traded 1. If we held a two-day Board meeting, we would only compensate directors for one meeting fee. 2. We compensate directors for their attendance at Board meetings and Committee meetings even if the meetings are held on the same day. 3. We do not compensation directors for voluntarily attending a Committee meeting (only members of the Committee are compensated). Medium Publicly Medium Public 1. Our directors are compensated for two days. 2. Yes, our directors are compensated separately for each meeting they attend. 3. Yes 1. Compensated for each day; 2. Directors compensated for both the board meeting and the committee meeting; 3. Non-member directors are not compensated for their attendance 8

9 Large Publicly 1. I believe that we would compensate them for both day 2. Yes, each committee/board member receives fees for each meeting 3. No we do not compensation them. Medium Publicly 1. Have not held any two-day board meetings. Would like to hear other responses. 2. Yes, we would pay them for both, if both were held separately. 3. Volunteer attendees do not receive compensation. N/A 1. We pay our directors a fee for each day they attend. 2. Our directors are compensated for both as they have to prepare and read all the material for each meeting so they get pay for doing that and participating. 3. Yes, we do pay them as they also ask for the materials to be discussed and they participate. Medium Crown Corp 4. We pay compensation for each day separately 5. If board and committee meetings are held on the same day the directors are compensated for both meetings 6. No they do not get paid if they voluntarily attend committee meetings as observers large cap public company 2. Directors are compensated for one meeting only if the meeting runs for two days. 3. Directors are compensated for each Committee meeting they attend (if they are a member) and the Board meeting. 4. Only Committee members are compensated for attendance at Committee meetings. 9

10 Large Public Traded Company 1. Depends on the compensation policy/structure. Are the directors paid a per diem or a per-meeting attendance fee? 2. Again, it depends on the compensation policy/structure but the usual answer is yes. 3. Again, it depends on the compensation policy/structure but the usual answer is no where the observers are members of management. If the observers are consultants or other agents, whether or not they re compensated may depend on their contract for services. 1. It has been the case that they are compensated for each day. 2. Yes 3. Generally not compensated for voluntary attendance as observers, unless the Chair requests so. Medium public. 1. and 2. our policy is to pay meeting fees for each board or committee meeting whether held on the same day or not. If one particular Board meeting or Committee meeting takes a full day then they are compensated at a rate of double the normal meeting fee (because in general a board or committee meeting on its own would be less than half a day). Therefore if a Board Meeting (no committee meetings) is held over two full days (while we have not encountered that) we would likely pay them 4 times the normal meeting fee to compensate them for their time. 3. We do not pay non-member directors who voluntarily attend committee meetings as observers unless they are specifically requested to attend the meeting to report on an item on the agenda. Small Publicly 1. We pay fees based on the meeting. For example, we recently had a board meeting which was adjourned and reconvened several days later our directors were paid for one meeting not two. 2. When board and committee meetings are held on the same day, directors are compensated for both the board and the committee meeting. 3. Non-member directors voluntarily attending committee meetings as observers are not compensated 10

11 Large City owned 1. We typically compensate our directors on a per meeting/per day basis. If the board meeting lasts 2 days, they are compensated for 2 days since their attendance was required for both. 2. Yes we do, if they attend ended 1 board meeting and 2 committee meetings that day, they are paid individually for each. 3. We do compensate our non-member directors for their attendance at committee meetings as observers. 11