Board members at the automaker were sued for overpaying themselves from 2017 to 2020, and offered to give back most of that pay to settle the lawsuit while admitting no wrongdoing. In total, they agreed to return a stunning $735 million in cash and stock.

Tesla is an outlier when it comes to board pay. In reality, most boards are concerned about the optics of enriching directors with lavish retainer fees, says Matthew Vnuk, a partner at consulting firm Compensation Advisory Partners (CAP), who coauthored a new report on 2022 pay trends for independent board members at the 100 largest U.S. public companies. One of the key takeaways from this year’s analysis, he says, is that the pressure for board pay to appear “reasonable” leads to tight compensation bands, with companies of the same size paying comparable amounts.

So what’s reasonable now? Independent board directors earned $325,000 last year as their average base pay, which represented a 2.5% increase from 2021.

The typical pay structure was also little changed from previous years: On average, directors earned 63% of their pay in equity and 37% in cash. In keeping with existing trends, most companies allowed board members to sell some stock even before their terms were over.

Much more work for a tiny bump in pay

To be sure, $325,000 is a generous fee for a part-time job. (Surveys find board members dedicate about 250 hours per year or more to their roles.) And yet some directors may wonder whether they’re making enough. The data shows there’s little financial incentive for board members to take a committee chair or lead independent director role, since those jobs demand “significantly” more hours, says Vnuk, but only pay a small amount more.

Here are the median amounts of how much extra compensation directors received according to their role:

Non-executive chair: $200,000
Lead independent director: $50,000
Audit committee chair: $30,000
Compensation committee chair: $25,000
Nominating and governance committee chair: $20,000

The consultants found that audit committee chairs saw at least a slight increase in their premiums—from an average of $28,000 in 2021 to $30,000 last year—but there was no year-over-year increase in the top-up pay for compensation committee or nominating and governance committee leaders.

Though time commitments for committee work can vary by industry and company, Vnuk says, nominating and governance committee chairs at most firms find themselves working longer hours these days, responding to pressures for companies to refresh or expand their boards and boost the diversity of voices and expertise in the room. As a result, they are now constantly searching for and recruiting fresh candidates. Their compensation, meanwhile, still reflects a period when boards were far more static.

No extremes

Such asymmetries likely won’t be corrected anytime soon, says Vnuk. Rather than giving committee chairs a meaningful raise, and risk landing on shareholders’ radar, he sees companies rotating leaders periodically to spread the extra work around.

Board chairs are also not clamoring for raises, he adds. Although they often remark on the added hours attached to their responsibilities, they’re more concerned with being paid market rates. “They do not want pay to be a distraction,” says Vnuk.

Lila MacLellan
lila.maclellan@fortune.com
@lilamaclellan

Noted

“There is no question about the fact that we are living in an age of leverage, an age of credit, and it will have its consequences.”
 
—Mark Spitznagel, founder and chief investment officer of hedge fund Universa Investments, shared this observation in an interview with Fortune about what he calls “the greatest credit bubble in human history.”

On the Agenda

👓: Boards may find CEO succession planning extra challenging this year. Not only is the top job more demanding than ever, but CEO pay rates have not increased as much as salaries for other C-suite leaders. In other words, would-be chief executives may not be looking for a promotion. 

🎧   In a new Ted Talk, Jen Fisher, Deloitte’s chief of well-being, distills lessons from her career before and after she was diagnosed with cancer several years ago. Dealing with the disease, she says, was in some ways easier than managing the workplace burnout she once experienced. Burnout is invisible and stigmatizing, she says, and companies aren’t taking it seriously enough. 

📖  Our Global Fortune 500 list was published last week, along with this bookmark-worthy map of the countries where the most global giants are headquartered. 

In Brief

- When companies speak out about social issues, the menu of topics they address shifts from year to year. Racial equity and LGBTQ+ rights were the top subjects discussed in public statements from 2020 to 2022, according to a report from The Conference Board. Economic equality, gun safety, and immigration were the least mentioned concerns.

- The value of some office buildings has dropped so much that the land beneath them is more valuable than the building itself, says a Canadian real estate investor who has started buying office towers as tear-downs.

- Employers are bracing for new labor rules this month, Politico reports. The National Labor Relations Board, the Department of Labor, and the Equal Employment Opportunity Commission are each expected to unveil a host of proposals and rulings about overtime pay, the definition of an independent contractor, pay data reporting requirements, and more.

- The White House may soon ban companies from paying ransom when their data is stolen and held hostage in cyber attacks, writes Gary Barlet, Federal CTO of Illumio, in the Harvard Business Review. Such a law could bring relief for chief information security officers, he argues, since ransomware demands would finally become a problem that CEOs and CFOs would have to confront, rather than allowing CISOs to shoulder the blame alone.

The Long Read

Larry Fink, CEO of BlackRock, is now “the right wing’s bête noire,” according to writer Henry Tricks in a compelling new profile of the financial leader for the Economist’s 1843 magazine. As he traces Fink’s history from his West Coast childhood to his current perch as the most visible Wall Street target of the anti-ESG movement, Tricks digs into Fink’s motivations for embracing politics and climate change, and his current state of mind.

Facing highly personal threats from the right, “Fink consoles himself with the knowledge that the brouhaha has not stopped clients from pouring money into the firm,” Tricks writes.

“But the experience has caused Fink to rein himself in,” he adds. “The man who aspired to be the plenipotentiary of American finance has been reminded, for the second time in his career, that tall poppies risk being scythed down.”