Kiwi directors earning a third of fees offered overseas

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In recently released findings from an annual report, the Institute of Directors (IoD) claimed that while directors’ workloads had doubled over the past year, their fees had increased by just 4%.

The survey interviewed 1,976 directors from 1,326 organisations.

According to the report, while New Zealand owned companies are paying directors an average fee of $37,000, overseas owned organisations paid a mean fee of $99,625.

The research also exposed a gender pay gap amongst New Zealand’s directors.

Last year, female non-executive directors were paid an average $35,583, while their male equivalents’ average fee was $41,333.

This year, the gap remained, with the average fee for women being $37,000 and the average for men $45,000.

In the latest sample, 22% of the directors sampled were women.

Researchers also found that companies held an average eight board meetings in a year, with boards having an average six directors.

The IoD also said that the average directorship lasted four years in New Zealand.

Simon Arcus, CEO of the IoD, said that non-executive directors in New Zealand were earning a third of what their overseas counterparts were being paid.

He added that it was important for directors to be paid fairly, and that the 4% increase wasn’t keeping up with the pay rises being given to other Kiwi professionals.

“We’ve got to make sure that we can attract, motivate and retain directors by paying them a fair rate,” he said.

However, chairman of the Shareholders’ Association John Hawkins argued that there should not be an across-the-board increase in directors’ fees.

“Some companies are paying appropriate fees, some companies are probably slightly high and some companies are clearly behind,” he said.
  • Sharon on 25/08/2015 9:49:50 a.m.

    I don't mind our figures being compared to overseas ones, provided the figures are from comparable sized companies with similar turnover/profit. That would give a more balanced comparison. Because obviously a large company with 10s of millions(+) in profit can afford to offer its Directors higher fees than a company with a significantly smaller bottom line... Regardless, a 4% increase is not insignificant - many employees would dance cartwheels in the current climate to be given a 4% increase in their pay.

  • Sue on 24/08/2015 10:47:36 a.m.

    I cannot understand why we have this need to compare our figures to overseas ones. We are a much smaller country than most of those compared to so can never stack up to the same level.

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