FOR LOCAL corporate board members, the jobs are harder, riskier, and more time-consuming than a decade ago, but their pay is three times higher.
For many, compensation for the part-time oversight of a business is more than double the full-time and overtime wages of the area's highest-paid blue-collar workers.
Several companies with publicly traded stock in northwest Ohio and southeast Michigan reported paying their directors well over $100,000. Some paid more than $170,000, including Owens-Illinois Inc., the area's second-largest corporation.
"We're trying to stay current with what's happening out there," said an O-I spokesman. "The demand for independent directors is up, and the work load and risk have gone up, too."
On average last year, board members of 17 Toledo-area companies got total compensation of about $73,000, compared with $21,000 in the mid-1990s. The figures include retainers, per-meeting fees, and stock grants.
Directors of Exchange Bancshares Inc. worked for nothing last year because the bank holding company lost money. But some board members at O-I and at Dana Corp., Toledo's largest company, made as much as $172,000.
Dana tries to pay its board what its peer companies pay, said spokesman Gary Corrigan. "The compensation is designed to attract and retain the best directors we can get."
Even though the figures gleaned from filings that the local firms made with the U.S. Securities and Exchange Commission seem eye-popping, they are in line with national trends.
Board members of the nation's 200 largest companies received average total compensation of $176,000 in 2003, up 13 percent from the year before, according to a study last year by Pearl Meyer & Partners, a New York consulting firm. That study found a number of firms paying directors over $300,000.
The reason? "More responsibility, more time, and a lot more pressure," said Edward Archer, managing director for Pearl Meyer.
Since the Sarbanes-Oxley Act became law three years ago, directors spend a third more time doing their duties, he said. The law requiring more supervisory responsibility by board members stemmed from a wave of corporate scandals nationally.
The higher pay also is because of the higher risk for board members, some experts said.
After the blowup of WorldCom Inc., that firm's directors coughed up $18 million of their own money as part of a settlement totaling $54 million, and directors of the failed Enron Corp. agreed to pay $13 million as part of a $168 million class-action settlement after its bankruptcy.
Even smaller companies are sharing the cost of finding and keeping directors.
A study of 510 companies last year by the Conference Board found total compensation for non-employee directors of manufacturers to be $72,750, up about 5 percent from the year before; $67,000 for financial firms, up 22 percent; and $70,000 for service firms, up 17 percent.
Several national trends have caught on locally.
For example, nationally about two-thirds of large companies offer stock grants to directors. Locally, eight firms give stock grants, topped by $100,00 per board member per year at Manor Care Inc., of Toledo. A number of other area firms offer options or discounted shares.
In general, companies across the country reward the chairmen of the all-important audit committees, in part because of the added responsibilities for keeping tabs on the company's books as required by Sarbanes-Oxley.
O-I gives its audit-committee chairman an extra $20,000, Dana $15,000, Cedar Fair LP $10,000, and La-Z-Boy Inc. $8,000.
Nationally, about half of companies require directors to own significant amounts of stock. Among them locally: Dana gives new directors five years to ownat least $200,000 worth of stock; O-I wants them to own $200,000 worth within four years; and Cooper Tire & Rubber Co. allows two years to acquire 8,000 shares.
Even without the stock aspect, retainers and per-meeting fees have steadily risen in the last decade.
Retainers for the three Fortune 500 firms (Dana, O-I, and Owens Corning) average $63,000 versus $29,000 in 1994. Retainers for 14 other area firms average $21,000 now, nearly double $11,000 11 years ago.
Fees per board or committee meeting are typically $1,000 to $1,500 now. Cooper Tire, however, pays $3,000 per day.
Perks for board members range widely.
Most big companies pay travel expenses for directors, and some offer indemnity insurance.
Dana matches cash gifts to educational institutions up to $7,500; OC allows longtime directors to name charities and schools that will receive donations after their deaths; First Defiance Financial Corp. pays up to $3,500 a year for a director's country-club dues; and Cooper Tire gave its board members a chance to make an extra $12,000 last year by attending a four-day director-education course.
Many bank holding company directors in the area must do double duty. They also are on subsidiary bank boards, and often on loan committees, too.
Board members at First Defiance typically attend 15 meetings a year of the corporate board and 15 of the First Federal Bank of the Midwest board meetings, with each requiring hours of preparation and meeting time, said company chairman William Small.
In addition, directors serve on committees, some of which meet quarterly or monthly, and they rotate duties on the executive and loan-review committees, which meet weekly.
As for the makeup of area corporate boards, it seems to be catching up with national averages for women directors. Several studies have shown that about 16 percent of all directors nationwide are women. Locally, the seven Fortune 1,000 firms have 10 women directors, or 15 percent, and all 21 public companies in the area have a total of 18 women on boards, or 9 percent.
Ages of the directors range from 38 to 86.
The oldest is J. Russell Fowler, at Tecumseh Products Co..
The youngest are Michael Nicholson and Brian Burns at N-Viro International Corp.
The average age for area directors is 59, but 14 are 70 or older and only five are under 40.
Contact Homer Brickey at: