December 18, 2020

Non-executive director salary expectations

Finding exceptional leadership always comes with a price tag. So it’s no surprise that our clients frequently ask us for guidance on what they will need to pay candidates for both executive and non-executive roles. If we’ve not worked with that client before, it can be a bit of a test, but generally it’s another assignment and we can give an informed view based on decades of experience. Often, there’s also published information giving remuneration statistics.

However, things can get more interesting when an organisation is being both strategic and aspirational. For example, a client who is looking to acquire experience that will equip them well for the next 5 years, rather than the previous. This can often mean hiring more senior individuals, perhaps with remuneration that will align with a bigger organisation and subsequently, larger resources and expectations.

What to pay a non-executive director 

When looking for a new Non-Executive Director the same can apply. If it is an NED position within a larger business, say FTSE, remuneration is often structured with well published data and formulated salary ranges.

The same sometimes applies for a FTSE 250 sized business, although many of our clients fall into the AIM listed category. With over 10 years of experience in non-executive search we have our own findings here, but KPMG’s Executive Remuneration Survey of AIM listed Companies also has some good insight specifically on non-executive director pay.

It is when a smaller, or perhaps a privately owned or specialist business is looking to recruit an NED that things can be a little less clear. This is when we call upon our experience and our own precise research, which is in effect the most accurate salary survey possible. Why? Simply because that’s how we find and attract the better leaders. By ensuring we get the search parameters right and by our client recognising the candidate’s value and responding to secure the successful candidate, in most circumstances the remuneration is taken care of.

It is also worth noting that for an SME, hiring an NED can give the opportunity to recruit senior expertise (typically residing in larger organisations – such as: FTSE 100/250/350 leaders), on a part-time basis that would otherwise not be affordable for that business.

It’s not all about the money

Finally, there is another observation that makes the process of searching for NEDs a lot easier and differentiates our NED search work from many executive searches. We often find that the best candidates are just not financially driven, particularly those executives who are considering their first NED role. Yes, they want to receive a fair salary but actually many are more focused on being able to make a difference, to find a cultural fit and to be associated with another success story.

To discuss any aspect of hiring non-executive directors, please get in touch today.

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