As a new calendar year begins, it is time to review remuneration changes for ASX 300 board chairs (chairs) and other non-executive directors (NEDs).

Overall

Guerdon Associates analysed aggregate NED fee changes from FY2023 to FY2024 in ASX 300 companies. The sample included 972 same incumbent chairs and other NEDs across 231 companies. Part year NEDs are excluded.

We observed a median increase in total statutory remuneration of 3.33% for chairs and 2.38% for other NEDs (including fees for service on the main board and committees, as well as any allowances and share based payments).

The median rate of increase was higher this year than last for chairs and vice versa for NEDs (Last year chair fees rose at a median rate of 2.15% while for other NEDs fees increased at median of 3.27%).

Table 1 presents the change in aggregate fees for all NEDs, chairs and NEDs other than chairs.

Table 1: Chair and Other NED Remuneration Adjustments by Position.

 

The prevalence of increases (shown in Table 2) followed the same trend as the median increases, with chairs more likely to receive an increase this year than last. For other NEDs, increases were less likely than last year. Approximately two thirds of NEDs received increases.

Table 2: Percentage of NEDs by Change in Remuneration

 

The decreases do not represent policy fee reductions except in limited cases. Instead, the decreases were due to changes in valuations of share based payments year on year or changes in non-monetary benefits such as travel allowances or fringe benefits.

Table 3 shows the summary year-on-year fee increase statistics for chairs and other NEDs whose fee increased (excluding unchanged fees and decreases).

Table 3: Chair and Other NED Remuneration Increases by Board Role

 

Figures 1 and 2 display the distribution of total remuneration in FY2023 and FY2024 for chairs and other NEDs respectively.

Figure 1: Comparison of Yearly Distribution of Chair Fees

Figure 2: Comparison of Yearly Distribution of Other NED Fees

The majority of chairs were distributed between remuneration of $200,000 – $400,000. The largest amount of chairs were paid between $200,000 – $250,000. This is unchanged from the prior year. Similarly, the second most prevalent bracket has remained the same, being $250,000 – $300,000. The third most prevalent bracket has changed from $150,000 – $200,000 to $300,000 – $350,000.

The majority of other NEDs receive fees between $100,000 – $300,000. The most prevalent fee bracket has remained $150,000 – $200,000. The second most prevalent has changed from $200,000 – $250,000 to $100,000 – $150,000. This is predominantly due to the inclusion of NEDs in lower ranked companies that were excluded in prior years due to part year status.

By Company Size

Total remuneration for chairs and other NEDs’ have been divided into 4 groups based on the 25^th percentile, median and 75^th percentile of the companies’ 30-day market capitalisation up to 30 September 2024 ($1,062m, $2,270m and $7,424m respectively).

Table 4 shows the change in remuneration based on these quartiles for chairs.

Table 4: Chairs’ Median and Average Change in Remuneration by Company Size

 

Chairs of companies with market capitalisation between $2,270m and $7,424m experienced the largest median remuneration increase of 4.75%.

Chairs of the largest company size group (greater than $7,424m) recorded the smallest median increase of 2.43%.

Table 5 shows the change in remuneration based on the quartiles for the other NEDs.

Table 5: Other NEDs’ Median and Average Change in Remuneration by Company Size

 

The largest median remuneration increase for other NEDs was 3.30%, observed for companies with less than $1,062m market capitalisaiton. The smallest increase in other NEDs’ median remuneration was 1.78%,  for companies between $2,270m and $7,424m market capitalisation.

By Company Sector

Chairs and other NEDs have been divided into 11 groups based on their company’s GICS sector classification.

Table 6 shows the change in chairs’ remuneration based on GICS sector.

Table 6: Chair Median and Average Change in Remuneration by GICS Sector

 

The Utilities, Consumer Discretionary, and Materials sectors all saw minimal change in median remuneration, recording between 0% and 2% growth.

The Energy sector, which had the lowest median and average chair fees, saw the highest median chair fee growth at 14.60% in FY2024, compared to 0.45% in FY2023. The Utilities sector recorded the lowest median fee change in the context of also having the highest median and average chair fees.

Table 7 shows the change in other NEDs’ remuneration based on GICS sector.

Table 7: Other NEDs’ Median and Average Change in Remuneration by GICS Sector

 

The Utilities sector saw the lowest median remuneration change at 0.18% for other NEDs, followed closely by the Consumer Discretionary and Communication Services sectors at 0.40% and 0.60% respectively.

Other NEDs in the Energy and Information Technology sectors saw the largest increases in the median fees with a median percentage change of 6.08% and 4.80% respectively.

See HERE to view our analysis from last year.

Methodology

The data was derived from GuerdonData(R), which is the proprietary database by Guerdon Associates comprising executive and director pay for all companies in the ASX300. (Available for client subscription, to try our demo product, click HERE. For enquiries regarding a subscription, please contact us on info@guerdonassociates.com).

Companies with financial years ending in December or that are yet to disclose their 2024 annual reports at the time of analysis were not considered in the study. Similarly, NEDs that changed position during the time of study were removed from the sample, as well as those who were not in their position for the full 2 years. Companies that were only added or removed from the ASX300 during the duration of the sample time period have also been removed from the study.

The market capitalisation of companies is based on a 30-day average up to 30 September 2024.

Exchange rates used for directors paid in a foreign currency were the daily average for the respective exchange rate during the relevant financial year.

Calculations and percentages were conducted on each NED’s change in remuneration.

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