S&P 1500 Board Profile: Board Fees (Part 1)

S&P 1500 Board Profile: Board Fees (Part 1) 2013 Featuring Commentary From:

About Equilar Equilar is the leading provider of executive compensation and corporate governance data for corporations, nonprofits, consulting firms, institutional investors, and the media. Equilar's award-winning Equilar Insight product suite is the gold standard for benchmarking and tracking executive compensation, board compensation, equity grants, award policies, and compensation practices. With an extensive database and more than a decade s worth of data, the Equilar Insight platform allows corporations, compensation consultants, and institutional investors to accurately measure executive and board pay practices. Equilar Insight s Governance Center provides a comprehensive set of tools including: Institutional Shareholder Services (ISS) Simulator Glass Lewis Modeler Pay for Performance Analytics Solution With Equilar s Governance Center, companies can better prepare by analyzing historical voting results and modeling pay for performance analyses to ensure successful Say on Pay outcomes. Equilar s C-Suite mapping technology within the Equilar Atlas platform identifies pathways to executives and board members at target companies. With over 350,000 executive and board member profiles, Equilar Atlas is the premier executive resource for identifying new business opportunities. Equilar regularly publishes proprietary research reports and articles on the most pertinent issues and trends in executive compensation and corporate governance. Equilar research is regularly cited by CNBC, Bloomberg, The New York Times, The Wall Street Journal, and other leading media outlets. Featured In: Equilar, Inc. 1100 Marshall Street Redwood City, CA 94063 Phone: (650) 241-6600 Fax: (650) 701-0993 E-mail: info@equilar.com www.equilar.com S&P 1500 Board Profile: Board Fees (Part 1) 2

Contents About Equilar Introduction Executive Summary Methodology Key Findings Board Retainer Analysis Upward Trend in Director Retainers Continues Retainer Pay Components Increase in Value, Options Stay Relatively Flat Shift Toward Equity Board Leadership Retainer Analysis Premium Pay for Lead Directors Increasing in Prevalence and in Value S&P Indices Analysis S&P 500 Retainers Nearly Double that of Small-Cap Issuers Industry Analysis Significant Gap in Industry Medians Board Meeting Fees Analysis Board Meeting Fees Fall in Prevalence, but Increase in Value Appendix 2 4 4 4 4 6 6 7 7 8 8 9 9 10 10 12 12 14 S&P 1500 Board Profile: Board Fees (Part 1) 3

Introduction Executive Summary Methodology For many executives, serving on a board of directors is viewed as the pinnacle of one s career. Individuals invited to join boards, particularly for public companies, have made their marks in the corporate world and are often recognized as industry luminaries and thought leaders. Given the responsibilities and fiduciary duties of board members today, companies make significant investments in recruiting and securing top talent to serve on their boards. It follows that directors should be compensated accordingly for their expertise, time, as well as the risks, both personal and financial, that they assume by accepting a board position. However, boards of directors have a unique position in the corporate world, as they have the awkward responsibility of setting their own compensation. Attention to this aspect of board governance intensified during the 2008 financial crisis that crippled economies across the globe. Since directors uphold the responsibility of overseeing company management to ensure strategies are in place to create shareholder value, director pay has become a topic of increased scrutiny. This has led to heightened interest in the process by which boards set their own pay levels, and how board pay and composition practices align director behavior with the best interest of shareholders. To provide a comprehensive board profile, we researched companies within the S&P 1500 to produce a three-part report series covering board retainers, committee fees, and board composition. For the first report of the series, we partnered with the Society of Corporate Secretaries and Governance Professionals and Meridian Compensation Partners LLC to provide this detailed overview of board retainers and board meeting fees. To complement the in-depth data review, the Society and Meridian provide additional analysis and practitioners perspective in several key areas. For these analyses, Equilar analyzed data from S&P 1500 companies with fiscal year ends after May 1, 2012 and filed proxies as of June 1, 2013. Data for 1,046 companies are included in this study. Equilar employs the Black-Scholes formula, a stock-option pricing model, commonly used to estimate the grant date fair value of new-employee stock-option awards. Key assumptions used in this formula include the option-term length, dividend yield, risk-free rate, and stock-price volatility. Key Findings Upward trend in director retainers continues. Across the S&P 1500, the median director retainer increased 29.4% between 2008 and 2012, from $130,000 to $168,270. A shift toward equity. Over the past five years, the median equity component of director retainers has increased. In 2008, the median equity component was $90,000. From 2010 to 2012, the median equity component increased from $100,000 to $107,415, now 60.8% of retainers. Premium pay for lead directors increasing in prevalence and in value. More boards are paying a premium to lead directors, 44.9% today compared to 29.9% five years ago. The median premium value has increased 12.7%, from $17,750 in 2008 to $20,000 today. S&P 500 median retainer nearly double that of small-cap issuers. S&P 500 companies pay the largest director retainers with a median of $220,000. Midcap companies follow with a median director retainer of $160,000, and small-cap issuers median director retainer was $119,280. S&P 1500 Board Profile: Board Fees (Part 1) 4

Introduction Significant gap in industry medians. The Healthcare and Basic Materials industries have the highest median director retainers, with $235,000 and $200,000, respectively. The Utilities and Financial industries have the lowest median director retainers, with $150,000 and $127,750, respectively. Board meeting fees fall in prevalence, but increase in value. The percentage of companies paying board meeting fees has steadily decreased from 58.8% in 2008 to 38.7% today. Of the companies that continue to pay meeting fees, they range from $500 to $60,000 per meeting with a median fee of $1,750, up from $1,500 over the last five years. S&P 1500 Board Profile: Board Fees (Part 1) 5

Board Retainer Analysis Upward trend in director retainers continues Across the S&P 1500, the median director retainer increased 29.4% between 2008 and 2012, from $130,000 to $168,270. Since 2010, median director retainers increased 14.3% from $147,169. This upward trend may be influenced by the general increase in responsibility of the board of directors in the wake of the 2008 financial crisis. Legislation such as Sarbanes-Oxley, and most recently, Dodd-Frank, has not only increased the time commitment of directors, but arguably the exposure and reputational risk of serving on a board, especially a board of a company in crisis. Thus, it follows that the increase in pay should be commensurate with an increase in responsibility, time commitment, and risk. Within the S&P 1500, 32% of boards now pay retainers of $200,000 or more compared to 19.7% just five years ago. Two companies in the S&P 500, as well as one mid-cap company, have the highest retainers, paying directors $769,815, $593,920, and $522,672. The majority of these retainers are paid in equity, ranging from 89% to 95% of the total retainer. Conversely, the percentage of companies with director retainers less than $75,000 has decreased from 20.3% in 2008 to 8.4% today. Interestingly, the companies with the lowest retainers are in the Financial industry all small-cap companies. The retainers for these banking institutions are $9,566, $8,000, and $7,965, respectively. Less prevalent are companies such as Berkshire Hathaway and D.R. Horton that elect not to provide director retainers, opting for board meeting and committee fees instead. Meridian Analysis: Society Commentary: The rise in retainers coincides with the increased expectations that investors have for directors that oversee the companies in which they own shares. The ratcheting up of expectations began even prior to the financial crisis. Investors expect directors to have a strong understanding of the operations of the company, which takes considerable time and is reflected in the increase in compensation. We also note that investors increasingly are asking directors be made directly available to them. Where directors are willing to comply, this increases the time commitment for the director and often management, including the corporate secretary, and has led to formulation of policies around director communication with investors. Retainers have risen due to increased time commitments, committee-related work, transparency and not just financial skill but industry skill (resulting in a smaller pool of qualified candidates) now required to effectively serve on a public company board. The annual growth rate that retainers have increased per the data above is just over 5%. Comparing that rate to the 3% to 3.5% annual base salary increases observed in the broader marketplace for executives over the same time period, the rise in median cash retainers seems justified when considering how the scope and exposure of the director s role has changed. In addition, as discussed later in this report, a portion of the increase in cash retainer values can be attributed to the shifting of dollars away from per-meeting fees. Companies are acknowledging that directors time requirements have increased outside of scheduled meetings, which should be reflected in their base compensation. S&P 1500 Board Profile: Board Fees (Part 1) 6

Board Retainer Analysis Retainer pay components increase in value, options stay relatively flat Since 2008, the median cash component experienced the largest increase of 50% from $40,000 to $60,000 today. The median stock component increased 38.3% from $63,170 to $87,338. The median value of units increased from $80,410 to $103,567. Options are the only component not continuing the upward trend. From 2008 to 2010, the median options value increased from $62,843 to $74,180. However, from 2010 to 2012, the median options value decreased to $64,887. The chart below illustrates the breakdown of director retainers by component, including cash, stock, options, and units. Society Commentary: The decrease in value of options and options as a component of retainers over the past few years has mirrored the broader trend of de-emphasizing options among executive compensation packages. While there is something approaching consensus that directors should receive part of their compensation in equity to align them with shareholders, there appears to be a pullback from options for the same reason there was for executives, although perhaps with even more concern on effects on objectivity of decision-making. Given their leverage, options can incentivize holders to take big risks with shareholder assets, and directors often are in the position of approving significant strategic initiatives. Finally, options in general were tainted by the backdating scandals that came to light in the mid-2000s. The following chart provides the percentage of S&P 1500 companies that utilize each component as a part of director retainers today and highlights the change in component prevalence over the past five years. The cash and stock components have remained staples of director retainers, while options have decreased in prevalence with only 19.6% of companies granting options, down from 34.7% in 2008. More companies are utilizing units, up approximately ten percentage points from five years ago at 42.3%. Shift toward equity In 2012, the median percentage of director retainers paid in equity was 60.8%, with the remainder paid in cash. S&P 1500 Board Profile: Board Fees (Part 1) 7

Board Retainer Analysis / Board Leadership Retainer Analysis Over the past five years, the median equity component of director retainers has increased, indicating an emphasis on ownership and alignment with shareholders. The concept of the directors having skin in the game as they oversee management is widely believed to mitigate undue risk, as well as provide incentive to drive increased shareholder value in the long term. In 2008, the median equity component was $90,000. From 2010 to 2012, the median equity component increased from $100,000 to $107,415. a premium to chairmen compared to 25% five years ago. Chairmen premiums range from $5,000 to $1.5 million, with a median of $100,000, up from $75,000 in 2008. More boards are paying a premium to lead directors, 44.9% today compared to 29.9% five years ago. Though paying a premium to the lead director has become more prevalent, the median premium value has only increased 12.7%, from $17,750 in 2008 to $20,000 today. Premium pay for vice chairmen only increased 9.3% with a median value of $50,000. Though, the prevalence of a vice chairman premium has remained relatively unchanged with a low 1.7% to 1.9% over the past five years. Meridian Analysis: In our experience, companies are increasingly granting equity to non-employee directors in the form of deferred stock, whereby the director does not have the ability to take unrestricted possession of the shares until they leave the board. This facilitates even greater alignment with long-term investor interests. Using deferred shares allows for an even longer time horizon than stock options, which typically expire after 10 years. Premium pay for lead directors increasing in prevalence and in value Board leadership positions including chairman of the board, lead director, and vice chairman had higher median retainers, with $195,000, $180,000, and $170,000, respectively. Today, 35% of boards within the S&P 1500 pay Society Commentary: The increase in the amount of retainers for board leaders is not surprising, particularly in light of significant pay for non-executive chairs in some markets abroad. In fact, some might argue that all boards should pay their non-executive board leaders a premium, and the premium should be significant if the role is to be taken seriously. Investors (or at least a certain set of them) have pushed for everincreasing responsibilities for non-executive board leaders. There will likely be continued debate in the United States over whether the existence of a formal non-executive chair is a superior governance model, but there does appear to be general agreement that there should be a person in the boardroom with some standing to act as a counterbalance to the CEO. That position should arguably carry with it a significant premium in compensation to other board members. S&P 1500 Board Profile: Board Fees (Part 1) 8

Board Leadership Retainer Analysis / S&P INDICES ANALYSIS For leaders on the board, the chart below illustrates the breakdown of retainers for chairmen, lead directors and vice chairmen by component, including cash, stock, options, and units. The median cash component of the retainer was largest for chairmen at $75,000, followed by lead directors at $67,500, and vice chairmen with $60,000. The median stock component was relatively consistent across the board leadership positions with $90,000 for chairmen, $89,640 for lead directors, and $88,540 for vice chairmen. The median options value was highest for chairmen with $69,615, while lead directors and vice chairmen had median options values of $66,250 and $64,877, respectively. Similarly, the median value of units was highest for chairmen at $110,020, while for lead directors and vice chairmen, the median values of units were $104,400 and $105,275, respectively. used by companies, while options are the least utilized component for board leadership retainers. The prevalence of additional compensation through unique retainers has increased for chairmen and lead directors, but remained unchanged for vice chairmen, with median values of $167,500, $90,000, and $170,000, respectively. In 2008, 25.2% of companies within the S&P 1500 paid unique retainers to chairmen, 30.2% to lead directors, and 1.7% to vice chairmen. Today, 34.6% of companies pay unique retainers to chairmen and 44.9% now pay a unique retainer to lead directors. For leadership positions on the board, companies predominantly pay unique retainers in cash. S&P 500 retainers nearly double that of small-cap issuers An analysis of the S&P indices indicates that S&P 500 companies paid the largest director retainers with a median of $220,000. Midcap companies follow with a median director retainer of $160,000, and small-cap issuers median director retainer was $119,280. The table below shows the percentage of companies utilizing each retainer component for board leadership positions. Similar to director retainers, cash is the component most widely Further analysis indicates that the largest increase in median retainer is within small-cap companies, with a 32.5% increase from $90,000 in 2008 to 119,280 in 2012. For mid-cap issuers, the median retainer increased from $126,695 in 2008 to $160,000 in 2012, or 26.3%. Though the S&P 500 has the highest median retainer, it experienced the smallest increase from 2008 to 2012, $185,000 to $220,000, respectively. S&P 1500 Board Profile: Board Fees (Part 1) 9

S&P INDICES ANALYSIS / Industry Analysis There is a wide variation of premium fees paid to chairmen, lead directors, and vice chairmen across the S&P indices. For example, within the S&P 500, 55.3% of companies pay lead director premiums compared to only 46.4% and 31.2% for mid-cap and small-cap issuers, respectively. However, only 27.4% of S&P 500 companies pay their chairmen premium fees compared to 35.1% and 42.6% for mid-cap and small-cap companies, respectively. Finally, for the small cap, chairmen premiums are the highest with a median of $50,000, with $15,000 for lead directors and $30,000 for vice chairmen. Meridian Analysis: Compensation for board leadership positions will likely change rapidly in the coming years. Just as pay levels for Audit Committee Chairs increased after the Sarbanes-Oxley Act, and similarly, for Compensation Committee Chairs over the past few years leading up to and now following the Dodd-Frank Act and say on pay, pressure for companies to have independent Board Chairs will likely result in the role commanding premium pay, and likely, greater amounts of equity to strengthen alignment with shareholders. Within the S&P 500, of those companies that do pay premiums for board leadership positions, the median premiums paid to chairmen, lead directors, and vice chairmen are $160,000, $25,000, and $75,000, respectively. For chairmen and lead directors of mid-cap companies, median pay premiums were $100,000 and $20,000, respectively. Significant gap in industry medians The Healthcare and Basic Materials industries have the highest median director retainers, $235,000 and $200,000, respectively. The Utilities and Financial industries have the lowest median director Society Commentary: The significant increase in the median retainer in the financial sector coincides with the global financial crisis, and reflects increased demands on those directors. Many individual companies did experience significant turmoil, which necessitated sometimes weekly board meetings to manage through the crisis. However, over the longer term, the increase more likely reflects a reaction to the widely held opinion, true or not, that many financial sector boards were not staffed with directors that understood well enough all of the different and sometimes very complicated product lines of their large financial institutions. Higher fees were deemed necessary to recruit directors with those specialized skills, and to spend extra time with existing directors. Increased perceived reputational risk to being on a bank board has also likely played a role in increased retainers. S&P 1500 Board Profile: Board Fees (Part 1) 10

Industry Analysis retainers, $150,000 and $127,750, respectively. and 69% of retainers, respectively, in equity. Society Commentary: Technology and Healthcare directors receive a higher proportion of their retainers in equity than those in other industries, which is a pattern also seen among executives in those companies. There is a culture of using equity in those growth industries (especially among biotechnology companies within healthcare), which appears to have followed through to the board. Director retainers have increased above 2008 levels across all industries in the S&P 1500. The industries with the largest increases include the Consumer Goods and Financial sectors, increasing 43.8% and 40.7%, respectively. The industries with the smallest gains include the Industrial Goods and Services sectors with increases of 23.2% and 16.7%, respectively. Across all industries, the cash component of director retainers ranges from 30% and 42%. On the other end of the spectrum, industries such as Technology and Healthcare pay 70% Compared to other industries, more companies within the Financial, Utilities, and Basic Materials sectors utilize stock awards. However, 40% of Healthcare companies are granting options compared to only 2% of companies in the Utilities industry. Companies within the Technology industry are the most prevalent users of stock units as a part of director retainers. S&P 1500 Board Profile: Board Fees (Part 1) 11

BOARD MEETING FEES ANALYSIS Board meeting fees fall in prevalence, but increase in value The percentage of companies paying board meeting fees in addition to retainers has steadily decreased from 58.8% five years ago to 38.7% today. Of the companies that continue to pay meeting fees, their fees range from $500 to $60,000 per meeting, with a median fee of $1,750. While the median board meeting fee remained unchanged from 2008 to 2010 at $1,500, board meeting fees increased 16.7% to $1,750 between 2010 and 2012. prevalence of board meeting fees since 2008 despite a 22.4% decline for both industries since then. The sharpest decline in prevalence of board meeting fees occurred in the Basic Materials industry, which decreased from 61.4% of companies with board meeting fees in 2008, to only 36.4% in 2012. The Technology industry remained the most consistent with a 16.8%, from 44.4% of companies in 2008 to 27.7% today. Board meeting fees are most widely used within the Utilities and Financial industries with 56.6% and 46.0% of companies, respectively. The Consumer Goods and Technology sectors have the smallest prevalence of use with 34.7% and 27.7% of companies paying meeting fees, respectively. As the chart above demonstrates, the general trend away from board meeting fees has occurred across all industries. The Utilities and Financial sectors have continued to lead in Meridian Analysis: Companies have been steadily moving away from per-meeting fees in an effort to simplify and streamline the non-employee director pay programs. Additionally, the threat of being called-out by proxy advisors or failing to be re-elected due to poor attendance is greater incentive to attend meetings than the $1,500 to $2,000 payment. Companies have realized this, and have opted to ease administration by folding these fees into cash retainer values or equity. S&P 1500 Board Profile: Board Fees (Part 1) 12

BOARD MEETING FEES ANALYSIS Further analysis of meeting fees indicates that change in prevalence may have an effect on retainer values. In a breakdown of companies that have meeting fees either now, or did have them in 2008, and companies that had no meeting fees during the same period, the data highlights a significant change in median retainers occurred when there was either a change to using meeting fees, or a change to no longer pay meeting fees. For companies that had meeting fees in 2008 and no meeting fees by 2012, median retainers increased from $133,000 to $175,235, a 31.8% increase. Interestingly, for the five companies that had no meeting fees in 2008 and used meeting fees by 2012, the median retainer increased 160.3%, from $48,212 to $125,500. For companies that had meeting fees in 2008 and kept them in place through 2012, and companies that have never had meeting fees, the increase in median retainer was 10.0% and 10.1%, respectively. S&P 1500 Board Profile: Board Fees (Part 1) 13

APPENDIX Total Board Retainer Fees Total Board Fees per Director Total Board Meeting Fees Total Assets ($MM) Board Per Meeting Fees # of Board Meetings # of Cos. Board Size Revenue ($MM) Mkt. Cap ($MM) 3 Year TSR All Companies - 2012 Basic Materials 110 10 $3,099 $3,748 $5,919 8.3% $193,722 $200,000 $2,000 $13,750 7 Consumer Goods Financials Healthcare Industrial Goods Services Technology Utilities Average 10 th Percentile 25 th Percentile 50 th Percentile 75 th Percentile 90 th Percentile 121 10 $3,721 $2,546 $3,169 14.2% $178,442 $175,000 $1,500 $12,000 6 200 11 $886 $3,101 $10,735 9.6% $129,296 $127,750 $1,500 $12,125 8 80 9 $2,586 $3,680 $3,454 12.1% $229,000 $235,000 $2,000 $12,600 8 122 9 $2,090 $3,053 $2,707 14.9% $167,959 $165,914 $1,775 $14,000 7 196 9 $3,386 $3,319 $2,823 15.2% $170,417 $160,000 $2,000 $13,500 6 159 8 $1,128 $2,733 $1,745 11.8% $178,234 $185,000 $2,000 $12,000 7 53 11 $3,922 $2,916 $10,327 12.3% $160,000 $150,000 $1,700 $14,500 8 10 $10,351 $13,248 $28,501 12.3% $173,366 $173,697 $2,204 $17,118 8 7 $378 $587 $551-7.1% $81,278 $80,000 $1,000 $7,500 4 8 $803 $1,219 $1,413 3.0% $121,500 $120,820 $1,500 $10,500 5 10 $2,255 $3,185 $4,156 12.2% $170,899 $168,270 $1,750 $13,200 7 11 $7,708 $10,179 $14,265 20.8% $216,619 $220,000 $2,000 $18,000 9 13 $23,595 $29,812 $42,433 31.8% $260,125 $270,000 $3,000 $25,000 12 2012 S&P 500 Basic Materials 53 10 $11,683 $3,230 $18,090 6.5% $246,200 $260,000 $2,000 $18,000 7 Consumer Goods Financials Healthcare Industrial Goods Services Technology Utilities Average 10 th Percentile 25 th Percentile 50 th Percentile 75 th Percentile 90 th Percentile 51 11 $10,880 $2,662 $10,176 14.4% $209,688 $212,750 $1,500 $15,750 7 74 11 $6,191 $2,820 $55,833 11.3% $185,237 $190,000 $1,500 $19,500 9 39 10 $7,708 $4,803 $13,206 12.7% $245,360 $247,500 $2,000 $17,000 8 39 11 $10,191 $2,466 $11,795 14.1% $205,430 $207,500 $2,500 $17,500 7 73 11 $13,300 $2,726 $9,781 21.1% $202,629 $220,000 $1,750 $13,750 6 51 10 $8,006 $2,412 $12,679 13.2% $238,578 $250,000 $2,000 $22,000 8 28 11 $8,607 $3,206 $27,321 11.7% $189,977 $170,000 $2,000 $19,625 8 11 $23,336 $10,735 $66,933 12.9% $220,427 $223,135 $2,644 $22,950 8 8 $2,567 $612 $4,289-3.6% $150,713 $148,944 $1,500 $9,000 5 10 $4,394 $1,177 $7,808 5.2% $185,968 $185,000 $1,500 $12,125 6 11 $9,998 $2,932 $17,143 13.1% $214,143 $220,000 $2,000 $17,750 7 12 $22,825 $7,905 $43,060 20.2% $246,171 $250,000 $2,000 $22,000 9 13 $58,858 $20,668 $113,802 29.4% $294,237 $292,250 $3,000 $30,000 11 S&P 1500 Board Profile: Board Fees (Part 1) 14

APPENDIX Total Board Retainer Fees Total Board Fees per Director Total Board Meeting Fees Total Assets ($MM) Board Per Meeting Fees # of Board Meetings # of Cos. Board Size Revenue ($MM) Mkt. Cap ($MM) 3 Year TSR 2012 S&P MidCap 400 Basic Materials 33 9 $2,535 $3,911 $3,441 8.8% $162,667 $165,001 $1,650 $12,750 7 Consumer Goods Financials Healthcare Industrial Goods Services Technology Utilities Average 10 th Percentile 25 th Percentile 50 th Percentile 75 th Percentile 90 th Percentile 28 10 $3,019 $7,288 $2,387 11.9% $171,718 $172,500 $1,500 $13,500 8 66 10 $690 $3,060 $7,019 8.9% $117,077 $125,410 $1,500 $10,800 6 18 9 $1,593 $2,955 $2,213 9.8% $203,557 $210,000 $2,000 $16,000 8 35 9 $2,228 $3,327 $3,034 17.3% $178,572 $175,000 $1,875 $16,000 6 53 9 $2,821 $3,262 $2,575 17.5% $171,041 $160,000 $2,000 $13,200 6 43 8 $1,108 $3,887 $1,881 13.2% $189,500 $193,000 $2,000 $10,500 8 15 10 $2,310 $2,049 $6,682 12.3% $138,137 $125,000 $1,500 $12,000 7 9 $2,935 $15,156 $5,465 12.8% $165,463 $166,293 $2,186 $16,680 8 7 $563 $604 $1,157-5.2% $92,667 $80,000 $1,080 $7,700 4 8 $881 $1,276 $1,879 3.6% $126,693 $129,949 $1,500 $10,500 5 9 $1,866 $3,327 $3,386 12.8% $161,250 $160,000 $1,750 $12,250 7 10 $3,199 $14,349 $6,149 21.1% $193,997 $194,600 $2,000 $18,000 9 12 $5,522 $32,859 $12,473 30.9% $239,757 $245,000 $3,400 $25,750 11 2012 S&P SmallCap 600 Basic Materials 24 8 $841 $3,913 $1,228 10.40% $140,767 $135,000 $2,000 $12,000 7 Consumer Goods Financials Healthcare Industrial Goods Services Technology Utilities Average 10 th Percentile 25 th Percentile 50 th Percentile 75 th Percentile 90 th Percentile 42 8 $864 $2,249 $743 15.10% $109,260 $102,918 $1,500 $10,500 6 60 10 $308 $3,839 $4,141 8.10% $84,931 $81,625 $1,500 $12,000 8 23 8 $411 $2,854 $435 15.90% $161,667 $159,625 $1,500 $10,500 8 48 9 $1,169 $3,663 $956 12.40% $131,857 $128,246 $1,625 $13,500 6 70 8 $925 $4,059 $742 3.30% $121,455 $125,020 $2,000 $13,300 7 65 7 $376 $2,391 $538 7.60% $131,914 $130,000 $1,650 $10,000 7 10 11 $1,097 $4,018 $3,369 13.50% $129,837 $113,938 $1,500 $13,500 7 9 $1,046 $14,649 $1,880 11.20% $123,817 $121,316 $1,905 $13,301 8 6 $190 $569 $286-10.90% $58,438 $54,014 $1,000 $6,000 4 7 $339 $1,179 $460 0.30% $87,660 $84,835 $1,500 $9,200 5 8 $706 $3,460 $911 10.10% $118,666 $119,280 $1,500 $12,000 7 10 $1,272 $10,870 $2,004 20.30% $153,234 $150,000 $2,000 $15,000 9 11 $2,066 $29,649 $4,252 35.10% $182,964 $189,009 $3,000 $20,000 13 S&P 1500 Board Profile: Board Fees (Part 1) 15

APPENDIX Cash Total Equity % Cash % Equity Cash Total Equity % Cash % Equity All Companies - 2012 Basic Materials $70,000 $125,000 40% 61% 2012 S&P MidCap 400 Basic Materials $60,000 $90,234 39% 61% Consumer Goods $65,000 $115,000 41% 60% Consumer Goods $65,000 $105,550 40% 60% Financials $50,000 $76,000 41% 60% Financials $40,000 $75,000 41% 61% Healthcare $60,000 $152,954 29% 71% Healthcare $50,000 $135,000 26% 74% Industrial Goods $58,000 $100,000 40% 60% Industrial Goods $60,000 $106,666 37% 65% Services $55,000 $103,502 37% 64% Services $56,000 $100,000 39% 62% Technology $50,000 $125,000 29% 72% Technology $50,000 $143,000 27% 74% Utilities $55,000 $90,000 40% 60% Utilities $50,000 $75,000 40% 60% Average $61,819 $117,932 39% 64% Average $57,693 $115,339 39% 65% 10 th Percentile $30,000 $50,000 20% 50% 10 th Percentile $30,000 $54,920 18% 50% 25 th Percentile $40,000 $75,000 29% 56% 25 th Percentile $40,000 $76,114 29% 57% 50 th Percentile $60,000 $107,415 38% 63% 50 th Percentile $53,334 $100,000 38% 63% 75 th Percentile $80,000 $140,000 46% 72% 75 th Percentile $72,000 $127,050 44% 72% 90 th Percentile $100,000 $200,000 50% 82% 90 th Percentile $85,000 $187,038 50% 84% 2012 S&P 500 2012 S&P SmallCap 600 Basic Materials $90,000 $165,654 39% 61% Basic Materials $60,000 $80,000 43% 58% Consumer Goods $88,000 $125,000 41% 59% Consumer Goods $41,000 $76,037 42% 61% Financials $75,000 $120,000 40% 60% Financials $36,750 $42,000 50% 56% Healthcare $75,000 $165,900 31% 69% Healthcare $45,760 $115,000 29% 71% Industrial Goods $90,000 $112,971 45% 55% Industrial Goods $48,750 $75,000 40% 61% Services $75,000 $137,287 36% 64% Services $40,000 $83,565 35% 65% Technology $70,000 $175,000 29% 71% Technology $40,000 $88,480 29% 71% Utilities $70,000 $100,000 41% 60% Utilities $42,500 $58,908 41% 59% Average $79,145 $147,132 37% 64% Average $44,589 $83,479 41% 64% 10 th Percentile $50,000 $85,000 20% 50% 10 th Percentile $24,000 $33,324 21% 50% 25 th Percentile $60,000 $110,000 29% 57% 25 th Percentile $32,000 $50,000 29% 55% 50 th Percentile $75,000 $130,000 38% 62% 50 th Percentile $40,000 $75,000 39% 63% 75 th Percentile $100,000 $167,545 44% 71% 75 th Percentile $53,000 $100,002 49% 73% 90 th Percentile $110,000 $220,000 50% 80% 90 th Percentile $70,000 $139,744 61% 82% S&P 1500 Board Profile: Board Fees (Part 1) 16

Equilar Contacts For more information, contact Aaron Boyd, Director of Governance Research, at aboyd@equilar.com. The contributing author of this report is Belen E. Gomez, Content Marketing Manager, bgomez@equilar.com. Report Partners: Founded in 1946, the Society of Corporate Secretaries and Governance Professionals, Inc. (the "Society") is a non-profit organization (Section 501(c)(6)) comprised principally of corporate secretaries and business executives in governance, ethics and compliance functions at public, private and not-for-profit organizations. Members are responsible for supporting their board of directors and executive management in matters such as board practices, compliance, regulation and legal matters, shareholder relations and subsidiary management. The Society seeks to be a positive force for responsible corporate governance, providing news, research and "best practice" advice and providing professional development and education through seminars and conferences. The Society is administered by a national staff located in New York City, by members who serve on board and standing committees and through the member activities of 21 local chapters. David Martin Vice President, Business Development & Research dmartin@governanceprofessionals.org 212-681-2014 We are independent executive compensation consultants providing trusted counsel to Boards and Management at hundreds of large companies. We consult on executive and Board compensation and their design, amounts and governance. Our many consultants throughout the U.S. and in Canada have decades of experience in pay solutions that are responsive to shareholders, reflect good governance principles and align pay with performance. Our partners average 20+ years of executive compensation experience and collectively serve over 300 clients, primarily at the Board level. As a result, our depth of resources, content expertise and Boardroom experience are unparalleled. Our culture is one in which we regularly share our consulting experiences with each other to the benefit of all of our clients. This knowledge management approach creates shared learning and increases our effectiveness in solving challenging client issues. Our scale means that we have the ability to help companies through all phases of the economic cycle, as well as transactions and special situations. Jon Szabo Senior Consultant jszabo@meridiancp.com 972-996-0627

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