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BDO 600
Board Director Compensation Trends in Middle-Market Retail Companies BDO retail and consumer products Practice BDO has been a valued business advisor to retail and consumer product companies for more than 100 years. The firm works with a wide variety of retail clients, ranging from multinational Fortune 500 corporations to more entrepreneurial businesses, on myriad accounting, tax and other financial issues. For more information on BDO USA’s compensation and benefits service offerings for the retail industry, please contact one of the service leaders below:
Contact:
Director compensation continues to climb across 600 middle-market companies in eight different industries, according to an analysis conducted by BDO USA, LLP, a leading accounting and consulting organization.
T
he BDO 600: 2012 Survey of Board Compensation Practices of 600 Mid-Market Public Companies examines the director compensation trends in publicly traded companies with annual revenues from $25 million to $1 billion in the energy, healthcare, manufacturing, real estate, retail and technology industries; and publicly traded companies with assets between $50 million to $2 billion in the banking and financial services industries. The study included proxy statements that were filed between May 15, 2011 and July 15, 2012. Retail board directors’ saw a double digit increase in total compensation – the highest increase of any industry other than technology and financial services banking. On average,
retail board of director pay was $110,844, up from $99,369 last year. It seems the tides are turning, as this marks a considerable change from the previous fiscal year when average total compensation paid to retail industry directors was lower than director compensation at every other surveyed industry, with the exception of the heavily scrutinized financial services industries. Now, director compensation levels in the retail industry fall in the middle when compared to the other seven industries. While compensation is still lower than the technology, energy, healthcare and real estate industries, the significant increase in compensation levels makes it clear that as the industry becomes more competitive and Read more
David Berliner, New York 212-885-8347 / [email protected] Al Ferrara, New York 212-885-8000 / [email protected] Steve Ferrara, Chicago 312-856-9100 / [email protected] RANDY FRISCHER, New York 212-885-8445 / [email protected] Douglas Hart, San Francisco 415-397-7900 / [email protected] Issy Kotton, Los Angeles 310-557-0300 / [email protected] Alan Sellitti, New York 212-885-8599 / [email protected] Ted Vaughan, Dallas 214-969-7007 / [email protected] STEPHEN WYSS, New York 212-885-7480 / [email protected]
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BDO 600 Board Director Compensation Trends in Middle-Market Retail Companies
Board Director Compensation Trends by Industry – FY 2011 $200,000 180,000 160,000
$151,254
$148,272
$177,249
$125,498
140,000 120,000 100,000
$111,926
80,000
$110,844
$85,132
60,000
$57,426
40,000 20,000 0
Energy
Financial Services Financial Services – Banking – Non Banking
complex, retailers are turning to their boards for guidance and rewarding them for their increasingly important service.
“Director compensation levels reflect a growing trend across most industries to invest in recruiting top board member talent,” says Randy Ramirez, Senior Director with the Compensation and Benefits practice at BDO. “People who demonstrate an ability to make impactful decisions, while navigating an increasingly fickle consumer and digital retail landscape, and can drive growth, can command top dollar pay.” u Rapid Change Spurs
Compensation in Retail Industry Over the past few years, the retail industry has needed to adapt quickly to an uncertain economy and rapidly changing consumer shopping patterns. As retailers move forward with significant strategy shifts to acquire new customers and achieve top-line growth, boards of directors face complex decisions around executive changes, new pricing models, omnichannel commerce and refocused marketing strategies.
Healthcare
Manufacturing
u Pay Mix Favors Board
Fees and Stock Awards When it comes to pay mix, retailers saw the biggest increase in the board retainer and fees portion of their overall package. Average board retainer and fees increased 24 percent from $38,636 to $48,080. For retail directors, fees now account for 43 percent of compensation elements, up from 39 percent in 2010. Directors also saw modest upticks in average committee retainer and fees and stock awards, while option awards declined slightly. Option awards accounted for 12 percent of the total compensation package in 2011, down from 16 percent in 2010.
Pay Mix Favors Board Fees and Stock Awards 12% 43% 38% 7% Board Retainers and Fees Committee Retainers and Fees Stock Awards Option Awards
Real Estate
Retail
Technology
“As the lines between stores, e-commerce and mobile blur, companies are realizing the crucial need to recruit and retain top talent on boards,” says Al Ferrara, partner and national director of the Retail and Consumer Products practice at BDO. “We fully anticipated compensation would increase to meet that demand.”
About BDO USA BDO is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. For more than 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The firm serves clients through more than 40 offices and over 400 independent alliance firm locations nationwide. As an independent Member Firm of BDO International Limited, BDO serves multinational clients through a global network of 1,204 offices in 138 countries. BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. For more information, please visit: www.bdo.com. Material discussed is meant to provide general information and should not be acted on without professional advice tailored to your firm’s individual needs. © 2013 BDO USA, LLP. All rights reserved.
BDO 600
Board Director Compensation Trends in Middle-Market Retail Companies BDO retail and consumer products Practice BDO has been a valued business advisor to retail and consumer product companies for more than 100 years. The firm works with a wide variety of retail clients, ranging from multinational Fortune 500 corporations to more entrepreneurial businesses, on myriad accounting, tax and other financial issues. For more information on BDO USA’s compensation and benefits service offerings for the retail industry, please contact one of the service leaders below:
Contact:
Director compensation continues to climb across 600 middle-market companies in eight different industries, according to an analysis conducted by BDO USA, LLP, a leading accounting and consulting organization.
T
he BDO 600: 2012 Survey of Board Compensation Practices of 600 Mid-Market Public Companies examines the director compensation trends in publicly traded companies with annual revenues from $25 million to $1 billion in the energy, healthcare, manufacturing, real estate, retail and technology industries; and publicly traded companies with assets between $50 million to $2 billion in the banking and financial services industries. The study included proxy statements that were filed between May 15, 2011 and July 15, 2012. Retail board directors’ saw a double digit increase in total compensation – the highest increase of any industry other than technology and financial services banking. On average,
retail board of director pay was $110,844, up from $99,369 last year. It seems the tides are turning, as this marks a considerable change from the previous fiscal year when average total compensation paid to retail industry directors was lower than director compensation at every other surveyed industry, with the exception of the heavily scrutinized financial services industries. Now, director compensation levels in the retail industry fall in the middle when compared to the other seven industries. While compensation is still lower than the technology, energy, healthcare and real estate industries, the significant increase in compensation levels makes it clear that as the industry becomes more competitive and Read more
David Berliner, New York 212-885-8347 / [email protected] Al Ferrara, New York 212-885-8000 / [email protected] Steve Ferrara, Chicago 312-856-9100 / [email protected] RANDY FRISCHER, New York 212-885-8445 / [email protected] Douglas Hart, San Francisco 415-397-7900 / [email protected] Issy Kotton, Los Angeles 310-557-0300 / [email protected] Alan Sellitti, New York 212-885-8599 / [email protected] Ted Vaughan, Dallas 214-969-7007 / [email protected] STEPHEN WYSS, New York 212-885-7480 / [email protected]
2
BDO 600 Board Director Compensation Trends in Middle-Market Retail Companies
Board Director Compensation Trends by Industry – FY 2011 $200,000 180,000 160,000
$151,254
$148,272
$177,249
$125,498
140,000 120,000 100,000
$111,926
80,000
$110,844
$85,132
60,000
$57,426
40,000 20,000 0
Energy
Financial Services Financial Services – Banking – Non Banking
complex, retailers are turning to their boards for guidance and rewarding them for their increasingly important service.
“Director compensation levels reflect a growing trend across most industries to invest in recruiting top board member talent,” says Randy Ramirez, Senior Director with the Compensation and Benefits practice at BDO. “People who demonstrate an ability to make impactful decisions, while navigating an increasingly fickle consumer and digital retail landscape, and can drive growth, can command top dollar pay.” u Rapid Change Spurs
Compensation in Retail Industry Over the past few years, the retail industry has needed to adapt quickly to an uncertain economy and rapidly changing consumer shopping patterns. As retailers move forward with significant strategy shifts to acquire new customers and achieve top-line growth, boards of directors face complex decisions around executive changes, new pricing models, omnichannel commerce and refocused marketing strategies.
Healthcare
Manufacturing
u Pay Mix Favors Board
Fees and Stock Awards When it comes to pay mix, retailers saw the biggest increase in the board retainer and fees portion of their overall package. Average board retainer and fees increased 24 percent from $38,636 to $48,080. For retail directors, fees now account for 43 percent of compensation elements, up from 39 percent in 2010. Directors also saw modest upticks in average committee retainer and fees and stock awards, while option awards declined slightly. Option awards accounted for 12 percent of the total compensation package in 2011, down from 16 percent in 2010.
Pay Mix Favors Board Fees and Stock Awards 12% 43% 38% 7% Board Retainers and Fees Committee Retainers and Fees Stock Awards Option Awards
Real Estate
Retail
Technology
“As the lines between stores, e-commerce and mobile blur, companies are realizing the crucial need to recruit and retain top talent on boards,” says Al Ferrara, partner and national director of the Retail and Consumer Products practice at BDO. “We fully anticipated compensation would increase to meet that demand.”
About BDO USA BDO is the brand name for BDO USA, LLP, a U.S. professional services firm providing assurance, tax, financial advisory and consulting services to a wide range of publicly traded and privately held companies. For more than 100 years, BDO has provided quality service through the active involvement of experienced and committed professionals. The firm serves clients through more than 40 offices and over 400 independent alliance firm locations nationwide. As an independent Member Firm of BDO International Limited, BDO serves multinational clients through a global network of 1,204 offices in 138 countries. BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms. For more information, please visit: www.bdo.com. Material discussed is meant to provide general information and should not be acted on without professional advice tailored to your firm’s individual needs. © 2013 BDO USA, LLP. All rights reserved.
