Close this search box.


What can you expect as compensation for a non-executive director role?

Non executive director


The topic of NED compensation is one that we often get asked. Questions primarily come from aspiring non-executive directors, recently appointed NEDs and organisations. Recently appointed NEDs and organisations are typically looking for a benchmark to ensure that the remuneration offered is competitive and in line with practices. For aspiring NEDs, finding out what compensation they can expect is part of their research into whether becoming a NED is aligned with their aspirations and financial needs. In this blog, we point our readers to some useful data.


Factors influencing NED compensation

There are a few factors that determine the level of remuneration of a NED:

  • Size
  • Sector
  • Company type
  • Maturity
  • Financial resources
  • Time commitment (a couple of days per week, per month or per quarter?)
  • Responsibilities including being a member of a sub-committee of the board, being the SID, the chair of the board or a sub-committee


Component of remuneration

Good corporate governance practices include protecting the independence of non-executive directors. As such, non-execs receive a director fee, paid in cash. Remuneration of NEDs may consist of equity, notably in companies scaling up and with limited financial resources, but this may be perceived as compromising their independence.

In its annual letter to its shareholders, published in February 2020, Warren Buffett expressed that he feels “better when directors of [his] portfolio companies have had the experience of purchasing shares with their savings, rather than simply having been the recipients of grants”.


Listed companies

Korn Ferry reported (2018/2019) that the median basic NED fee was:

  • FTSE 100 £70k (lower quartile: £62.5k, upper quartile: £80k)
  • FTSE 250 fee £52.8k (lower quartile: £49k, upper quartile: £60k)
  • FTSE SmallCap £45k (lower quartile: £40k, upper quartile: £50k)

The BDO AIM Directors’ Remuneration (January 2020) report indicated that the median remuneration was £42.3k (first quartile: £33.7k, third quartile: £60k). Industry sectors which consistently pay NEDs at the higher end of the scale are financial services, technology & media, manufacturing & industrial markets and natural resources.


Public sector roles

What about public sector NED roles? The compensation varies between £400 to £1,000 per day, but some roles are unpaid. A detailed review of public appointee compensation within the Department for Education is available at this link (watch the replay).


Housing associations and NHS Trusts

In the social housing sector, non-executive director remuneration starts at around £3,000. Some roles, notably the role of the chair, may attract up to £30,000 per annum. NHS trustees are paid £13,000.


Trustee roles

Trustee roles are typically voluntary or “expenses paid” only.


Privately-held companies

Start-up and high-growth businesses

Start-ups and scale-ups are more likely to offer shares as part of the compensation structure, because of their constrains on financial resources. This type of remuneration needs to be balanced against the requirement for NEDs to be independent.

SMEs and privately-owned businesses

This segment covers a wide range of situations and includes well-funded businesses as well as companies with tight financial resources. In the SME sector, remuneration typically starts at around £5,000 and some roles may be paid £50,000 per annum. Some well-funding and large privately-held businesses may compensate their non-executives at the same level as listed companies.


Related postWhat compensation can I expect as a non-executive director?


Written by Elise Perraud, NEDonBoard COO


Want to know more?

  • New to the NED role? Watch our acclaimed webinar, How to secure your first non-executive director role.
  • Already committed to becoming a non-exec and want a roadmap to achieve this objective? Sign up to the NED Accelerator Programme by NEDonBoard. We applied years of accumulated knowledge and worked with experienced NEDs and chairs to deliver practical and actionable content to support you in transitioning with confidence and success.
  • Already on a board? Join NEDonBoard, the Institute of Board Members as a member or contact [email protected] for training opportunities aligned with your objectives and aspirations.
  • You may also sign-up to the weekly newsletter (non-member) to receive relevant updates and read about NED roles on offer.
  • For salary benchmarking consultancy, please contact [email protected].