New NCEO Data on ESOP Board Practices

A new NCEO survey of 190 ESOP companies shows that only 26% of the respondents have boards made up only of current employees, compared to 49% in 2005. Twenty-nine percent have boards that have a majority of inside directors, compared to 25% in 2005. Sixty percent of the companies have independent directors who have no ownership, employment, or family relationship with the company, up from 51% in a 2005 survey who did.

The median compensation for outside directors was $10,000 in 2005 (the 2005 data were not directly comparable but appear to be somewhat lower). Thirty-eight percent of companies expect their boards to become larger, and 40% plan to add inside directors. The median number of full board meetings was 3.8 per year and, for companies with committees (most often a compensation committee), the median number of committee meetings was 2.8 per year.

The results are part of a new NCEO survey on corporate governance in ESOP companies that looks at boards, trustee selection and practices, voting rights, and other issues. A summary of the results is available at no cost to NCEO members (companies who join can request the survey at no charge). In addition, we can do customized analysis of the data based on company demographic characteristics for $200. Contact Loren Rodgers at [email protected] for the free summary for members or for details on obtaining a customized analysis.