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    Criteria for Determining Board Director Compensation and Search Firm Fees

    An Introduction to Board Director Compensation & Considerations:

    Navigating the landscape of Board Director compensation and recruiting fees reveals a wide-ranging spectrum, spanning from 25K to 200K or more. This intricate pricing variance is a product of diverse factors, including business size, ownership type, role specificity, and unique attributes sought in board members. BSG put together a list of criteria utilized when reviewing the possible aspects that are mission-critical in your next board search.

    1. Board Director Compensation and Recruiting Fees:

      • Evaluate compensation range from 25K to 200K or more.
      • Assess associated recruiting/search fees.
    2. Business Size:

      • Consider the size of the business: small, medium, large, mega.
    3. Ownership Type:

      • Identify ownership type: family, bootstrapped, private, ESOP, public, for-profit, non-profit, etc.
    4. Type of Board Director Seat:

      • Determine the type of board director seat:
        • Outside director only.
        • Outside director and committee chair.
    5. Committee Structures:

      • Assess committee involvement:
        • Popular committee structures: Audit, Nominating, Compensation, etc.
    6. Board Chair Role:

      • Define role as:
        • Board Chair.
        • Executive Board Director.
        • Non-Executive Board Director.
    7. Special Characteristics Needed:

      • Consider specific traits required, such as:
        • Diversity candidate.
        • Sitting CEO (currently a CEO of another company).
        • NON-operating board director (retired or without full-time operating responsibilities).
        • "CEO-whisperer" (mentor/coach/advisor to the CEO).
    8. Time Investment:

      • Evaluate time commitment in steady-state case:
        • Frequency of board meetings (quarterly, monthly).
        • Percentage of meetings held in person vs. virtual/remote.
        • Consideration of an annual board retreat.
        • Travel requirements to/from in-person meetings/company location.
        • Interstitial board call demands (if any).
    9. Search Firm Compensation:

      • Understand that the search firm's compensation is linked to board director position compensation.
      • Recognize that a common estimate for search fees is "1x first-year board cash compensation."
    -by Clark Waterfall on Aug 8, 2023 8:19:13 AM


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