Director Remuneration

Non-executive director (NED) remuneration is subject to public, investor, and regulatory scrutiny. Setting board fees is no longer a routine administrative exercise. It requires balancing market competitiveness, workload, complex risk governance, and alignment with shareholder interests, all while avoiding conflicts of interest.

At Guerdon Associates, we collaborate with Board Chairs, Remuneration Committees (RemCos), and Nomination Committees to evaluate, structure, and refine NED fee levels, committee fees, and equity-based fee frameworks.

As Australia and New Zealand’s premier independent remuneration adviser and a founding member of the global GECN Group, we combine deep quantitative research, peer group benchmarking, and regulatory insight to ensure your board attracts and retains high-calibre leadership while maintaining investor support.

The Strategic Importance of Objective Board Remuneration

Getting board fee structures wrong presents substantial risk:

• Fees set below market: Inability to attract and retain suitably qualified directors
• Misaligned fee structures: Reputational risk and investor pushback if fee structures or pool increases lack clear justification, potentially resulting in votes against re-election of directors

Core Pillars of Our NED Remuneration Advisory Services

Our advisory model provides boards with defensible, transparent, and evidence-based fee structures tailored to your company’s scale, strategy, and risk environment.

We provide end-to-end guidance from initial fee benchmarking through to AGM resolution support and shareholder disclosures:

Service	Focus & Key Deliverables
Board & Committee Fee Benchmarking	Comprehensive benchmarking of Board Chair, Deputy Chair and Lead Independent Director fees, as well as committee Chair and member fees. We benchmark fees against tailored peer groups competing for capital and director talent across ASX-listed companies, the unlisted sector, and international markets.
Fee Pool Headroom Evaluation & Modelling	Assessing aggregate fee pool limits and alternative modelling against projected board expansion, committee structure changes, and multi-year headroom requirements prior to seeking shareholder approval at AGMs.
NED Equity Plans	Structuring tax-efficient NED equity plans that comply with ASX Listing Rules and meet investor expectations.
Minimum Shareholding Guidelines	Designing policies and timeframes for NEDs to acquire and maintain a meaningful equity stake in the company, while having regard for the impact it may have on attracting suitably qualified and diverse NED candidates.
Special Exertion Fees	Setting appropriate NED compensation for special committees or workload not reflected in policy fees.
Disclosure for Optimal Support	Drafting clear, defensible Notice of Meeting resolutions and Remuneration Report sections detailing director fee rationale to secure strong shareholder and proxy adviser support.

 

Key Elements of a Modern NED Remuneration Framework

A robust NED fee framework balances equity, market competitiveness, and governance best practices:

• Base Board Fees: Fixed annual retainer fees paid to the Chair and Directors to compensate for core board responsibilities and ongoing governance.
• Committee Fees: Additional fees for chairing or serving on standing board committees (Audit, Risk, Remuneration), recognising the distinct workloads and duties involved.
• Special Duty & Travel Allowances: Structuring equitable compensation for directors of global companies with extensive cross-border travel, or extraordinary committee duties during M&A or restructuring events.
• Director Equity: Pre-tax or post-tax fee sacrifice plans that allow directors to build equity holdings over time and meet minimum shareholding guidelines.

Frequently Asked Questions (FAQs)

How often should NED fees be benchmarked?

Main board and committee fees are typically reviewed at least every two years against relevant peer companies to track market movements. A comprehensive structural review of committee fee allocations and overall fee pool limits should be conducted ahead of planned board expansion.

Can NEDs receive equity as part of their remuneration?

Yes, but to support independent judgement and objective decision making, equity grants for NEDs do not typically carry performance conditions or implied share price hurdles. In some circumstances it will be appropriate for companies to consider alternative NED equity arrangements to attract suitably qualified directors and to align interests with securityholders.

How do you assist boards with proxy adviser recommendations on fee pool increases?

We conduct pre-AGM stakeholder reviews, testing proposed fee pool increases and director equity structures against the voting policies of major proxy advisers (e.g., CGI Glass Lewis, ISS, ACSI) and institutional investors. This ensures your Notice of Meeting resolution includes clear, defensible justifications, minimising the risk of vote pushback.

Contact us for advice.