Director pay continued to climb last year, according to a new survey from Mercer Human Resource Consulting.

Over the last four years, median director pay has increased almost 50 percent, to $155,000, including increases in both cash compensation (up 10 percent) and equity (up 30 percent) in 2004. Compensation had risen only 2.3 percent in 2003, and 8.4 percent in 2002.

Median retainers also increased $10,000 in 2004, to annual median totals of $50,000, after having remained flat for the past two years. While a slight percentage of companies has eliminated paid committee meeting fees, the 65 percent of companies paying fees increased their median fee to $1,500 a meeting. About 20 percent of companies provided a different retainer for committees with higher workloads, such as the audit committee.

The study examined data taken from Mercer's annual survey of 350 of the largest publicly traded companies in the country, and from 2005 proxy statements.

The survey's analysts pointed to more time and effort being required from directors in an effort to meet the demands of shareholders and regulators, as well as a shrinking pool of available independent directors, as being the driving force behind the increases.

The analysts said that Mercer expects to see less variability and more transparency and simplicity in director pay programs in the future. With committee workloads likely converging more often, Mercer expects to see reductions in the need to pay directors on a per-meeting basis, and that compensation will be structured on annual retainers and that fewer directors will receive stock options.

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