In the business world, the buck stops in the boardroom. Large organizations often have a board of directors to provide oversight, ensure legal compliance and set the overall direction for a company. A chairman of the board in a for-profit organization usually receives a salary or other compensation.
Big Company, Big Salary
Salaries for board members tend to be driven by the size of the company, according to the Frederic W. Cook and Company survey of director compensation. A business with less than $1 billion of market capitalization typically paid total compensation of $125,260 to each member of the board in 2013, the survey showed. Businesses with up to $5 billion paid a total of $182,500, and those with $5 billion or more paid $236,650.
In addition to the pay for being a board member, board chairs receive a stipend. According to Cook and Company, stipends vary by industry. In 2013, in financial services and technology, the median stipend was $50,000. In the retail industry, the median stipend was $100,000 in 2013. Energy companies offered the highest median stipend at $150,000, with a range from $75,000 to $200,000.
Location made a difference in board chair salaries in 2014, according to SalaryExpert.com. In Ohio, the average salary was $133,181. In Chicago, Illinois, the average salary was $162,553. Board chairs in Charlotte, North Carolina, were paid an average of $157,198. Average salaries in California ranged from $132,689 in San Francisco to $143,295 in Los Angeles and $145,555 in San Diego. In Portland, Oregon, the average board chair salary was $156,770. Houston, Texas, offered the highest average salary in SalaryExpert.com’s data, at $164,771.
Above and Beyond
Some board chairs earned much higher salaries than the average, according to a May 2013 Bloomberg article. Pay to directors, including the board chair, averaged $251,000 at Standard and Poor’s 500 index companies. John Tyson, the chair of Tyson Foods’ board of directors, earned $3,295,168 in 2012. He was surpassed by William Foley -- executive chairman and chairman of the board before becoming vice chair -- who earned $3,488,791 in 2011 from Fidelity National Information Services.
- Photo Credit Ryan McVay/Digital Vision/Getty Images