Study on the remuneration of non-executive directors in Belgian non-listed companies
How Are Directors Compensated in Belgian Non-Listed Companies?
Determining the right compensation for directors is no easy task. That Belgian companies struggle with this is evident from the fact that more than 40% report that they are likely paying less to their non-executive directors than their sector peers. Furthermore, an overwhelming majority of these companies admit to paying less than foreign companies. This is remarkable, as appropriate remuneration is crucial for attracting the right directors. Often, inadequate remuneration stems from a lack of insight into the general remuneration practices of other companies.
Therefore, over the years, GUBERNA has conducted several studies on the compensation of non-executive directors. This new remuneration report, created in collaboration with our partner Hudson, highlights the most recent picture of director compensation in Belgian non-listed companies. It delves deeper into the remuneration practices and levels for members, chairpersons, and even members and chairpersons of board committees. A distinction is made based on the size of the companies (micro, small, medium, and large enterprises). The report provides an update on previous research conducted in 2016.
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Here’s a sneak peek of some key findings:
- Non-executive directors are not always compensated. The smaller the company, the greater the likelihood that these directors are not compensated. In micro-companies, this even represents a majority. In large companies, it is less than 10%.
- There is a relatively strong correlation between revenue and the (increasing) compensation of these directors. However, there is no clear correlation between the remuneration of non-executive directors and the number of FTEs or total assets.
- There are significant differences in median amounts depending on the type of remuneration. Non-executive directors who only receive variable compensation typically receive considerably lower sums compared to those with fixed remuneration. Non-executive directors who receive a combined form of remuneration (both variable and fixed components) receive the highest salaries.
- As companies grow, they more frequently opt for a combined form of remuneration (both variable and fixed components). This somewhat correlates with the presence of a remuneration committee and the complexity of such compensations.
- Some companies have specific compensation schemes for chairpersons and for members/chairpersons of committees. These are also discussed in the study.
- Compared to the previous study (2016), we see that smaller companies have started paying significantly more. An interesting observation is that in some cases, smaller companies are paying their non-executive directors more than larger ones. Nonetheless, the total cost of a board remains higher for larger companies due to the larger number of directors.
Your Investment
The detailed study on the remuneration of non-executive directors is available upon request for the following prices.
- You are an Institutional or Journey member or Research Partner at GUBERNA: free
- You have another type of membership at GUBERNA: €250, excluding VAT.
- You have another or no membership at GUBERNA: €500, excluding VAT.
Customised Benchmarks
Would you like to compare your remuneration policy with a reference group? You can also opt for a customized remuneration benchmark. Please contact us for a quote.
Please note that GUBERNA has also published a study on the remuneration of directors in listed companies. More information can be found here.
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