“Frederic W. Cook & Co. studied non-employee director compensation programs at 300 companies of various sizes and industries. This report summarizes pay levels and program structure. We observe a 4% year-over-year increase in total pay at the median, along with a growing preference for simplicity that began several years ago at large-cap companies and is now common throughout the market. Our sample of large-cap companies pay directors $260,000 at the median, with few crossing the $300,000 threshold. The median at mid-cap companies is just shy of $200,000, and is $136,000 at small-caps. Technology companies are the highest-paying of the sectors we studied, and financial services the lowest, consistent with observations in our 2014 report. The broad trend in program design is toward simplicity and alignment with shareholder interests. An increasing number of companies are moving away from board meeting fees and into retainer-only programs, which are easier to administer, and acknowledge that meeting attendance is an expected part of a director’s service. Similarly, more companies are doing away with committee meeting fees, with an increasing number instead providing a retainer for committee service. However, there is a small, but growing, minority of companies that pay a “conditional” fee, which applies for meetings in excess of a certain minimum per year instead of eliminating them completely. Equity compensation continues to make up the majority of non-employee director pay. Large-cap companies began the move away from options, shifting to dollar-denominated stock awards instead. Now, nearly 85% of the companies in our study use this approach for director equity grants, which aligns with directors’ roles as stewards of shareholder value. Director compensation programs continue to respond to the increased focus on corporate governance “best practices.” For instance, we observe greater prevalence of stock ownership guidelines. Additionally, we found that 10% of companies granting equity mandatorily defer share settlement until retirement from board service. We expect this program feature to increase in prevalence in coming years in light of recent attention on the accounting treatment of such grants, which may allow for a discount to fair market value for the lack of liquidity during the mandatory hold period.”