Directorships, already among the best-paying part-time jobs in corporate America, are becoming even more lucrative.
Fortune 500 directors could receive median pay of nearly $234,000 in 2011. That's a 10% jump from the 2010 median of $212,500, according to an analysis out Wednesday by compensation consultant Towers Watson.
Behind the increases: higher cash retainers and gains on Wall Street, which lifted the value of directors' stock compensation 9% last year — the biggest jump in equity award values since 2006, Towers Watson pay consultant Doug Friske says.
Directorships can be far more lucrative. Apple directors averaged more than $984,000 in 2010, while Occidental Petroleum directors averaged nearly $420,000. Moreover, while Towers Watson found median pay up 6% in 2010 and expects gains of up to 10% in 2011, firms such as Allergan and Navistar are boosting retainers by up to 80%.
Directors are tasked with overseeing management, executive pay and corporate strategy. Typically, their ranks have been filled by CEOs and retired executives.
Aside from a handful of board and committee meetings, directorships typically consume little time. A recent National Association of Corporate Directors study found directors averaging just 4.3 hours a week on board work.
Critics says directors are largely overpaid and ineffective. "Far too much of their time has been for check-the-box and cover-your-behind activities rather than real monitoring of executives and providing strategic advice on behalf of shareholders," says John Gillespie, a former investment banker and co-author of Money for Nothing: How the Failure of Corporate Boards is Ruining American Business and Costing Us Trillions.
Compensation consultants say that with more regulatory compliance required under federal laws, qualified directors are hard to find, even with higher pay.
"It sounds like a lot of money for a part-time job, but there are some pretty full-time risks," says Jan Koors of pay consultant Pearl Meyer & Partners.
While CEO pay has come under increasing scrutiny, director pay has largely flown under the radar. Stubbornly high unemployment and the growing disparity between the pay of rank-and-file workers and executives could put fresh scrutiny on directors by movements such as "Occupy Wall Street."
Says Arun Gupta, who has been tracking Occupy efforts in several cities for the Indypendent newspaper: "People are going to look at these numbers and say they're excessive and unfair."
The National Association of Corporate Directors did not respond to calls for comment.
This story first appeared in USA Today.