Even as industry profits and portfolios tumble, mutual fund directors got rather sizeable pay raises in 2002, according to a Reuters report on a survey by Management Practice, Inc. Director pay at the top 50 fund companies increased 8%, with $113,000 their median compensation, according to Management Practice.

Directors at some firms were paid significantly more, notably at Putnam, a division of Marsh & McLennan, which had some of the highest-paid directors in the industry. John Hill, vice chairman of First Reserve, a private equity company specializing in energy, made $388,250 last year for his work at Putnam, less than his 2001 pay of $403,500.

Warren Buffett, the famous investor and Berkshire Hathaway chairman, had harsh words for fund directors in his recent shareholder report, saying they often fail to negotiate for lower fees or pick the best possible managers.

Despite the criticism they confront, directors may deserve the big money more today than they did in the past, according to some industry observers.

"Today, there’s a lot more responsibility resting on their shoulders than there has been historically, especially with a lot of regulations coming down the pike in the last 18 months," said George Martinez, co-founder of FundWatchDog.

However, these pay raises are not necessarily the rule across the board, as a few of the biggest fund companies, including Fidelity Investments and Janus, cut directors’ pay.

Fidelity directors still earned a lot by industry standards, however, pulling in an average $262,450 last year. That is down slightly from an average $266,050 in the previous year, according to regulatory documents.

Janus directors made between $94,000 and $184,000 last year, less than they earned in 2001, when they each pulled in $185,000, filings showed.

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