Annual Sarbanes-Oxley compliance costs averaged $16 million -- a jump of 77 percent from last year, according to a survey of corporate boards by RHR International and Directorship.
Costs were significantly higher among companies with more than $ billion in revenue, according to the poll of 266 board directors at U.S. companies. Companies with revenues of up to $1 billion spent an average of $1.8 million to comply with SOX and related new Securities and Exchange Commission rules. Those with revenues of $1 billion to $4 billion spent an average of $4.8 million, while companies with more than $4 billion in revenue spent an average of $35 million, according to the Directorship/RHR International Board Survey.
In addition, 64 percent of directors surveyed reported that the new regulations have changed their participation as a director, particularly in the area of chief executive compensation. Two-thirds indicated that they plan to change either salary (33 percent) or salary relative to bonus (33 percent). Almost a fifth (19 percent) said that they will change how shares are awarded and 12 percent indicated that stock option plans would be altered.
The survey also revealed that 47 percent of companies surveyed don't have a CEO successor in place, although 61 percent expect that CEO leadership transition will go smoothly.
