Guess how much non-executive directors in Singapore are paid each year

They got a 5.3% wage hike in 2012.

In a report released today, Hay Group said that non-executive directors (NEDs) in Singapore companies are seeing a moderate increase of 5.3 percent in average fees per NED (S$52,000) in Financial Year (FY) 2011/2012, compared to the previous financial year.

The report, Board Remuneration and Practice in Singapore 2013, is based on a study of 249 listed companies on the Singapore Exchange (SGX), and examines current board practice, including board composition, leadership, meetings, in a move to provide an overview of board governance in listed companies in Singapore.

According to the report, the median average directors’ fee in small- and medium-sized companies saw modest growth in FY2011/2012.

The average directors’ fee grew from S$43,000 to S$47,000 (9.3 percent) in small-sized companies and from S$55,000 to S$60,000 (9.1 percent) in medium-sized companies, while dropping slightly from S$95,000 to S$92,000(3.2 percent) in large-sized companies.

The median total board cost or the total directors’ fee — including chairman fee and special directors’ fee — approved at the annual shareholder meetings in Singapore companies is S$605,000, with the highest board costs found in the Finance sector.

The Hay Group report found that the components of NED remuneration comprise of basic retainers/committee service fees, meeting fees and share-based compensation, with basic retainers and committee service fees making up the bulk of remuneration.

A board chairman receives 180 percent higher for the retainers compared to a board member.

The report also showed that slightly under half or 13 of the 28 companies that disclosed their directors’ fee structure provided meeting fees to their NEDs, with the median board meeting fee at S$2,000 per meeting.

Only a small number of companies set remuneration policies for meeting fees dedicated to overseas meetings, telephone or video-conference meetings.

Meanwhile, 25 companies (10 percent) in the study awarded their NEDs with share-based compensations. Among them, 16 companies issued share options while the remaining nine companies awarded either restricted shares or performance shares.

Mr Kevin Goh, Director of Executive Rewards, Hay Group Singapore, said, “The revised Code of Corporate Governance recommends companies to encourage NEDs to hold shares in the company so as to better align their interests with shareholders.

Hay Group expects to see more companies implementing share ownership schemes or reward NEDs with shares in the future.”