Despite a difficult market last year for mutual fund investors, independent fund directors awarded themselves an 11 percent average pay raise in 2000.
That represents the largest compensation gain in the past eight years, according to Management Practice, the New York consulting firm that specializes in the governance of mutual funds and annually surveys independent mutual fund directors compensation.
The median annual compensation for an independent director who oversaw a fund complex with between $5 billion and $10 billion in assets was $49,930, but that grew to $106,000 for fund directors whose complex managed $50 billion or more. Annual director pay was only $7,250 for directors of fund complexes with less than $1 billion in assets.
Data from Management Practices study were released yesterday.
The record increase in compensation is, in part, attributable to former SEC Chairman Levitts appeal for independent fund directors to become more involved in the governance process, said Management Practice said. Directors, who set their own pay, felt that since the SEC expected more work for them, they should be paid more, said Management Practice.
The survey also found that while overall pay increased, the cost per director, per fund governed has fallen from $2,289 in 1994 to $1,900 in 2000.
The survey also found that the typical board has between nine and 11 members, that 71 percent of board chairpersons are affiliated not independent directors, and that only six percent of all fund groups have retirement compensation plans.