Director pay levels off in Europe, but gender pay gap increases

Non-executive director pay was static in the past year in Europe, and although the number of women on corporate boards increased, so did the gender pay gap.

Hay Group’s study of board composition and compensation showed that pay for public-company directors in most countries remained flat, with independent directors receiving slight increases and non-executive chairmen seeing declines. The study of 390 public companies showed that median pay for an independent director was €75,200 in 2012, up 5.2% from 2011. The median for a non-executive chairman dropped 9.7% to €214,800 in 2012.

The totals include directors’ compensation in annual base pay, and bonuses for committee participation and meeting attendance. Annual pay for independent directors and non-executive chairmen remained the same in 11 of 12 European countries, with Sweden’s 5% increase the only exception.

Representation by women on corporate boards improved slightly in Europe. In 2011, companies in seven of 12 countries represented in the survey had male board representation of 90% or more. Last year, only Italy hit that mark. Overall, 83% of European directors in 2012 were male, compared with 87% in 2011. Norway has the highest percentage of female directors (38%), and Sweden and Finland both have 28% female boards.

Women are often not part of “strategically important” committees on European boards, the report says, and their pay reflects that. Male independent directors in Europe made an average of 9% more than women, up from 7% in 2011. In Italy, the pay gap was 22% in 2012, when 2% of non-executive chair positions across Europe were held by women.

“Despite more women being appointed to European boards, the opportunities offered to them when they get there are clearly still lacking,” Carl Sjöström, director of executive reward for Europe at Hay Group, said in a news release.

The data about women on corporate boards resemble that of a recent US survey showing that 81% of companies had women making up 25% or less of their board.

The Hay Group report also found that the pay gap between non-executive chairmen and independent directors differed widely by country. In Italy, for example, the non-executive leaders of boards make more than five times what other directors make. In The Netherlands, those leaders make 1.3 times as much.

Related CGMA Magazine content:

More Women Join Boards, but Progress Comes Slowly”: Women have increasingly joined boards of publicly listed companies in the US, but about one in four boards did not have any female directors in 2012, according to Ernst & Young research.

In-Demand Directors See Pay Rise Nearly 10%”: Average pay has increased in the past year for directors of public companies, according to analysis by BDO USA. Directors in the technology sector make the most, on average.

Neil Amato ( is a CGMA Magazine senior editor.