“Board salary will be $0 if my bid succeeds, so that’s ~$3M/year saved right there,” Musk retorted, adding, “the Twitter board collectively owns almost no shares! Objectively, their economic interests are simply not aligned with shareholders.”

Demand for board oversight has increased dramatically in recent years, along with their workload. But board gigs do still come with high financial rewards. Last year, Twitter’s board members received an average of around $289,000 in total compensation. While that’s lower than some of their peers in the tech space—the average board compensation for Meta executives, for instance, was just under $800,000—it’s nothing to scoff at.

The average total compensation for S&P 500 board directors in 2021 was $312,279, up 1% from 2020, according to a Spencer Stuart analysis of board pay. Healthcare, communications services, and technology offered the highest average pay among all industries, with the tech sector averaging $338,000 in total compensation and 52% of that in stock awards.

Stock grants made up the bulk of directors’ pay, accounting for 56% of their compensation, followed by cash retainers, which made up 37%. The average annual retainer was $131,664, while the average stock grant was $177,529. (Since stock grants are treated as income for tax purposes, directors may prefer a deferred compensation option, which 70% of S&P 500 companies offer.)

Most board chairs, lead independent directors, and committee chairs earned an additional retainer for their services, with audit chairs receiving the highest retainer because of the significant work and expertise associated with the role. The average additional retainer for committee chairs in the Spencer Stuart analysis was $23,073, almost double the average retainer paid to all board committee members.

While most companies offer stock grants, stock options have become less popular over the years, the data shows. In 2009, 37% of boards offered stock options; that figure is now down to 11%.

When it comes to director compensation at public companies, “all roads lead to uniformity,” says Shannon Nash, CFO of Wing, an Alphabet company, and the lead independent director at the publicly-traded software company User Testing. Companies will typically look to benchmarking data to determine a pay range for board members and if the company is preparing to go public, for example, it will adjust to meet the benchmark, Nash says.

At Twitter, slashing board salaries to zero could very well prompt a board exodus, which may be exactly what Musk wants. But Nash notes that private companies, which Twitter will become once Musk’s $44 billion deal is finalized, have much more variation in their board director compensation plans; cash retainers are generally lower than their public counterparts and stock options make up a larger part of total pay. With the majority of upside coming from the future value of the stock options, much of the negotiation around board pay centers on stock options and grants.

It’s safe to say that even after Twitter’s shares are delisted, the company may find it challenging to build a strong board if it offers zero cash compensation.

To be sure, directorship can be a remunerative endeavor, especially for those who sit on multiple boards. The average total compensation for board members has increased by 10% over the last five years and by 35% since 2011.

Given the increased workload, time commitment, number of meetings, and the range of issues now under the board’s purview, director compensation could see upward pressure just like the rest of the labor market. And if board turnover increases, coupled with demand for diverse candidates, competition for executive talent may also rise, with the best directors flocking to companies that offer more competitive pay and true mission alignment.