Summary of Director Compensation Survey 2020

Thai Institute of Directors Association (IOD) has conducted Director Compensation Survey 2020 to compile director compensation data of companies listed on the Stock Exchange of Thailand (SET) and the Market for Alternative Investment (SET).  Some 290 companies, accounted for 40% of total listed companies, voluntarily participated in the survey.  The survey result can be summarized as follow:

1.     Most companies offered cash-based compensation to directors including meeting fee (87%), retainer fee (73%), and bonus (56%).  Most of the companies (34%) provided a combination of retainer fee, meeting fee, and bonus while only 1% offered other forms of non-cash compensation like stock and warrant.    

Figure 1 Types of director compensation (% of participated companies)

2.    The average annual compensation for Chairman (cash-based compensation only) was at Bt1,220,000, 65% higher than that of Non-Executive Director and 77% higher than that of Executive Director.

3.   The median retainer fee of Chairman was at Bt50,000 per month, about 1.8 times more than that of Executive Director and Non-Executive Director.

4.    The median meeting fee of Chairman was at Bt25,000 for each meeting, 1.25 times higher than that of Non-Executive Director and 1.39 times above that of Executive Director.

5.   The median annual bonus of Chairman was at Bt470,000 while median annual bonus of Non-Executive Director and Executive Director were at Bt300,000 and Bt263,000 respectively.

6.     Members of Committees were paid only in the form of cash-based compensation including retainer fee, meeting fee, and bonus.  Most were in the form of meeting fee. Committee Chairman usually received higher compensation than other committee members.

Considering changes in amount of director compensation from the previous year, most companies paid the same amount of compensation to directors as did in 2019 while 12% either raised or reduced compensation.  Most companies that lifted director compensation took into account greater roles and responsibilities of directors and compared compensation with industry peers that have similar level of revenue.  Most companies that trimmed director compensation were affected by Covid-19 pandemic and registered negative bottom lines in the past year. 

The Board should determine appropriate director compensation, taking into account types and amounts of compensation then comparing them with industry peers or companies with similar level of revenues.  Doing so will safeguard shareholders’ interests, motivate directors, and retain competent directors with the company.

 Siriporn Wongkeaw
Senior CG Analyst – Research & Development
Thai Institute of Directors (IOD)