Kiwi directors still paid less than Aussie counterparts

Non-executive directors received a pay boost this year but still earn around half the fees of their Australian counterparts, a survey shows.

The survey, by human resources consultancy company Sheffield, polled more than 400 organisations in Australasia.

It showed annual base fees for directors rose a median of 20.5 per cent to a median fee of $25,000 in the past year, compared with a rise of between 5 per cent and 7 per cent in Australia.

Sheffield rewards practice manager Sherry Maier said: "Perhaps New Zealand is finally recognising the importance of robust governance practices and critical governance skills required at the board table."

But she said although the transtasman pay gap had narrowed, the base fees paid to Australians were still about twice those paid to New Zealanders in comparable businesses.

This disparity was based not only on company location but also on the nationality of individual directors on the same board.

"We work with several New Zealand businesses which have Australian and Kiwi directors working side by side on the same board," she said.

"Do you pay them differently to reflect their origin when they clearly shoulder the same responsibilities, take the same risks and are expected to contribute in similar ways?"

Such disparities were an obstacle to greater transtasman integration.

"A two-tiered fee system is unfair and untenable. You create two classes of directors."

Maier expects to see gaps narrow further over time but "whether they are eliminated entirely, my crystal ball is not clear".

Regional variations were also considerable, with Auckland paying the highest non-executive director fees with a median of $35,000, Wellington coming in at $25,000 and Christchurch at $22,900.

"I think it's really obvious that a lot of the largest companies are based in Auckland and the strongest correlations with fee levels tend to track with company size, such as revenue, market cap and assets," Maier said.

In individual sectors, insurance came top with median fees of $35,088 a year, followed by manufacturing and processing at $35,000. Hospitality and tourism came bottom at $15,000.

Publicly listed companies came in at a median of $30,714, followed by public sector companies with $22,100 and privately owned companies at $21,689.

The survey showed 8.8 per cent of organisations paid their chairman $100,000 plus each year and 3.3 per cent said their directors were eligible for a bonus.

Among publicly listed companies, 8 per cent had a share option plan for board members, compared with 20 per cent of Australian-listed companies.

The median required attendance of directors was 38 days a year.

The survey also looked at director attitudes towards issues such as risk, workload and time commitment.

Fee jump

* Fees for non-executive directors rose 20.5 per cent in the past year to a median of $25,000.

* Directors are still paid about half the fees of their Australian counterparts.

* Publicly listed and Auckland-based companies pay the most.