Public Company Director Pay Rises 3% as Board Expectations Expand, New NACD/Pearl Meyer Report Finds

NACD today published its annual Director Compensation Report, the industry standard for public company board pay practices, structures, and trends.

WASHINGTON, Jan. 29, 2026 /PRNewswire/ — The National Association of Corporate Directors^® (NACD^®) has reported that public company director compensation levels continue to grow modestly, according to NACD’s 27^th annual Director Compensation Report, produced in collaboration with leading compensation and leadership consultancy Pearl Meyer.

The report shows that as boards’ responsibilities and expectations continue to expand, median director pay for 2025 only slightly increased by 3% year-over-year across all public companies. Overall compensation practices continued to align with governance standards and shareholder expectations.  

The report analyzes compensation and governance practices at 1,400 public companies across 24 industries and highlights how boards are adapting their structures and compensation programs to support oversight of technology, risk management, and evolving governance expectations.

Key Report Findings

• Total director compensation (TDC) for directors increased by 3% in 2025 across all firms, with most companies recording annual changes within a 2–4% range
• Micro companies ($50–$500 million in revenue) experienced the largest year-over-year increase, with median director compensation rising 8% as smaller firms continue to narrow historical gaps with larger organizations.
• Audit committee chairs remain the highest paid, followed by compensation and nominating and governance committee chairs. From 2020 to 2025, compensation committee chair pay rose 29%—the largest increase among board committees—compared with an 11% increase for other committee chairs.
• Director pay structures continued to simplify, with companies relying more heavily on predictable cash retainers and full-value equity awards, moving away from variable elements such as meeting fees and stock options.
• Median cash retainers remained flat across all company sizes, while equity awards and committee compensation increased modestly, reflecting the growing workload and specialization required of directors.

“Boards are being asked to oversee a far broader set of risks and strategic issues than in the past, yet director compensation continues to reflect a disciplined and measured approach,” said Peter Gleason, president and CEO of NACD. “The data show boards adapting their structures and practices to meet new demands while keeping pay aligned with long-term value creation and shareholder interests.”

NACD’s Director Compensation Report also noted:

• Median director tenure has declined to 6.1 years, down from 8.7 years in 2015, signaling continued emphasis on board refreshment.
• In 2025, 97% of boards had at least one female director.
• The prevalence of combined CEO/chair roles has decreased over the past decade. In 2025, 35% of companies maintained a combined CEO and board chair role, continuing a long-term decline in combined leadership structures.

“Director compensation trends remain steady because boards are focused on simplicity, transparency, and alignment,” said Ryan Hourihan, managing director at Pearl Meyer. “As responsibilities expand—particularly around technology oversight and risk—boards are refining pay programs to support effective governance without introducing unnecessary complexity.”

About the NACD/Pearl Meyer 2025–2026 Director Compensation Report
Data presented in the 2025–2026 Director Compensation Report were collected through a study of 1,400 public companies across 24 industries that filed proxy statements or other SEC disclosures containing director compensation information for fiscal years ending between Feb. 29, 2024, and Feb. 28, 2025. Companies are grouped into five size categories based on revenue: micro ($50–$500 million), small ($500 million–$1 billion), medium ($1–$2.5 billion), large ($2.5–$10 billion), and top 200 (the 200 largest companies in the S&P 500 by revenue).

About NACD
The National Association of Corporate Directors^® (NACD^®) is the leading member organization for corporate directors who want to expand their knowledge, grow their network and maximize their potential. For more than 48 years, NACD has helped boards and the business community elevate their performance and create long-term value. Our leadership continues to raise standards of excellence and advance board effectiveness at thousands of member companies. 

NACD’s value insights, professional development events and resources, such as the NACD Directors Summit and the NACD Directorship Certification^® program, support boards in navigating complex challenges. With a growing network of more than 24,000 members across more than 20 Chapters, boards are better equipped to make well-informed decisions on the critical, strategic issues facing their businesses today. Learn more at www.nacdonline.org.  

About Pearl Meyer
Pearl Meyer is the leading advisor to boards and senior management, helping organizations build, develop, and reward leadership teams that drive long-term success. The firm provides strategy-driven compensation and leadership consulting services to organizations ranging from emerging growth companies to the Fortune 500.

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SOURCE National Association of Corporate Directors