How much do directors earn?

Director compensation across Australia varies widely according to sector, size and region, with nearly half of roles still unpaid. Our report’s findings underscore growing pressures on boards and highlight the need for tailored remuneration strategies.

AICD has released its 2025 Director Remuneration Report, in partnership with Godfrey Remuneration Group (GRG), offering a detailed overview of non-executive director (NED) payment practices across Australia's private, not-for-profit (NFP), government, and listed sectors. This report, the first update since 2016, draws on responses from 1,352 AICD members surveyed in late 2024.

Key findings show remuneration is primarily determined by role complexity, organisational size, and sector. Notably, the number of paid directorships in the NFP sector have doubled over the past decade. However, almost half of all NED and chair positions remain unpaid, particularly within charities and NFPs, highlighting continued reliance on volunteer leadership.

AICD Managing Director & CEO, Mark Rigotti, highlights that while director remuneration is a vital topic of discussion for the governance community, there is no one-size-fits-all approach. “Individual organisations must consider their unique circumstances when determining appropriate arrangements for their boards,” he says in his introduction to the report.

Size dependent

Survey data reveals organisations generating under $10 million annually offer relatively modest median board packages: $25,000 for NEDs and $40,000 for chairs. Main board packages (MBP) typically include base board fees, superannuation contributions, equity grants, committee fees, and additional allowances for leadership roles such as chair positions.

As company revenue increases, compensation rises markedly. In the $10 million to $50 million range, median chair remuneration jumps to $50,000, almost double the corresponding NED pay of $27,000.

This upward trend continues sharply for larger entities. For organisations earning $200 million to $1 billion, chairs receive a median package of $145,000, more than twice the $70,000 paid to NEDs. At the highest end, for entities with revenue exceeding $1 billion, chair remuneration reaches a median of $180,000, significantly higher than the $105,000 received by NEDs.

Overall, the data underscores the strong link between organisational scale and board compensation, reflecting the greater complexity and responsibility inherent in governance roles within larger corporations.

Cheryl Hayman FAICD, non-executive director and remuneration committee chair for the ASX-listed Ai-Media, agreed with this encapsulation. Addressing a webinar to launch the report, she said, “Complexity and company size play a large role, particularly with ASX-listed companies, which obviously pay significantly more than smaller private or non-profit entities.”

Arts compensation at the bottom

“Industry sector also matters,” Hayman highlighted. “Sectors with high regulatory demands and complexity, like finance, healthcare, and tech, often carry higher fees due to their higher risk levels.

According to the survey’s median pay rankings, the information media and telecommunications industry leads NED pay, offering a median main board package of $85,000. It is followed by the construction, transport, postal and warehousing, mining, and financial and insurance services sectors.

For board chairs, the financial and insurance services industry tops the scale with a median package of $105,000, followed closely by electricity, gas, water and waste services; information media and telecommunications; mining; and manufacturing.

At the other end of the spectrum, arts and recreation services offer the lowest median package for NEDs, at just $12,750. Meanwhile, chairs in the education and training sector receive the lowest median pay, at $25,000.

To pay or not to pay

Additionally, the report finds that over one-third (34 per cent) of respondents hold unpaid roles, with an extra nine per cent receiving only expense reimbursements.

Listed companies are most likely to provide remuneration, followed by government bodies, private companies, NFPs, and charities. Surprisingly, some larger organisations with revenues between $1 billion and $2 billion still have unpaid NED and chair roles, challenging assumptions about compensation norms in large enterprises.

Across the regions

The report also underscores substantial regional variations. Queensland offers the highest median chair remuneration at $70,500, closely followed by overseas roles at $70,000. South Australia ranks third ($62,500), with New South Wales and Victoria both at $60,000.

For NEDs, overseas positions offer the highest median compensation ($60,000), with Western Australia second domestically at $53,000. The Australian Capital Territory (ACT) ranks lowest, providing a median package of $27,500, demonstrating a considerable geographic remuneration gap.

Workload

NEDs typically spend around two days per month on board duties, balancing governance, strategic oversight, and compliance, the report finds. At larger organisations, specifically those with revenues of $1 billion or more, this commitment rises to a median of three days monthly.

Monthly board meetings typically last around three hours, but the report highlights substantial variations at Australia's largest organisations, where chairs can spend up to 11 hours and NEDs up to seven hours per month in meetings.

"Compensation increased in line with workload," the report notes. At the lower end, NEDs attending meetings up to three hours per month received a median main board package of approximately $13,771, compared to $20,000 for chairs.

For NEDs at organisations with revenues exceeding $1 billion, spending up to nine hours monthly, remuneration rose significantly to a median of $117,000. The report did not include corresponding figures for chairs in these larger organisations. Mid-sized organisations, earning between $50 million and $200 million, offered median packages of around $40,000 for NEDs and $67,500 for chairs, according to the research.

Flexibility and times of change

Typically, board fees and expected commitments are outlined clearly when directors join a board, often through a position description provided by the search firm or the company itself. But, as Hayman pointed out, workloads can rapidly escalate during periods of change like transactions.

“The time commitment can sometimes far exceed what you initially sign up for, depending on what's happening at the organisation,” Hayman flagged.

“Governance environment and market trends are crucial as well. Increasingly, stakeholders closely scrutinise remuneration, which has meant remuneration increases for directors in Australia have moved quite slowly.”

Drawing on a live example, she explained: "We're in such a transition right now, meeting more than monthly by a long shot - every couple of weeks, sometimes every couple of days, for special-purpose meetings." This variation in workload underscores why directors must consider their personal capacity for handling challenging periods. "During COVID, everyone was working triple time, yet fees, if anything, went down to help manage workforce issues," Hayman observed.

The report findings underscore the diverse approaches to director compensation across Australia's corporate landscape, reflecting differences in organisational size, sector, and specific board responsibilities.

You can download the full report here and register to watch the recorded webinar, Director Remuneration – Understanding your value and market trends, here.

CLARIFICATION: This article initially ran in the June edition of Company Director under the headline ‘Director earnings revealed: where do you rank’. The article contained some data that had been attributed incorrectly.