Nearly 30% of new directors in the 2014 proxy year are female
Third annual Spencer Stuart U.S. Technology Board Index highlights latest trends in board composition, governance practices and director compensation for top U.S. technology companies
NEW YORK, Dec. 8, 2014 — Seventy-two percent of U.S. technology companies included in the 2014 Spencer Stuart U.S. Technology Board Index have at least one female director, an increase from 66 percent in 2013.
While there has been a slow but steady increase in female representation over the past several years, technology company boards still trail the S&P 500 in this area. Today, women represent 13 percent of the total number of directors on technology boards, compared with 19 percent of all S&P 500 directors. Nearly 30 percent of new independent directors of technology companies are women, suggesting that boards will continue to make progress in this area.
Drawing on an extensive review of proxy data, the third annual U.S. Technology Board Index explores trends in board composition and governance practices and looks at how some technology company boards are thinking about board renewal and succession planning. The index also highlights 10-year composition and governance trends among Silicon Valley technology company boards.
Forty-two percent of U.S. technology companies included in the index added a new independent director in the past year. In total, 84 companies added 127 new directors, compared to 2013 when 81 companies added 129 new directors.
The average retirement age of technology companies remains unchanged from last year at 73, the same average age as the S&P 500. Despite this similarity, technology companies are less likely than S&P 500 companies to report a mandatory retirement age — 43 percent versus 73 percent. Nearly 50 percent of the boards with mandatory retirement ages set it at 75 or older, significantly higher than the S&P 500, where 30 percent of boards with retirement ages set it at 75 or older. The average age of independent directors on technology company boards is 62, approximately a year younger than the S&P 500 average.
The number of boards with one-year director terms among top U.S. technology companies continues to rise steadily, with 72 percent of technology companies now electing directors annually, an increase from 70 percent in 2013. The average director term length for technology companies remains unchanged from 2013 at 1.6 years.
Among other findings of the report are:
– Technology boards have 8.5 members on average, about the same as Silicon Valley boards with 8.4 members.
– Sixty-seven percent of boards separate the chairman and CEO roles, a slight increase from 65 percent in 2013. Fewer than half of S&P 500 boards, 47 percent, split the two roles.
– Total annual director compensation among technology companies averages $254,676, 13 percent less than the Silicon Valley average of $287,759.
– Stock awards represent 57 percent of director compensation for technology boards, up from 53 percent in 2013, and 63 percent for Silicon Valley boards.
The U.S. Technology Board Index is available in its entirety on the Spencer Stuart website, www.spencerstuart.com.
About the U.S. Technology Board Index
The U.S. Technology Board Index examines trends in board composition, governance practices and director compensation for 200 top technology companies in the United States. The companies in this index range in size from about $300 million in 2013 revenues to more than $170 billion and represent a broad swath of technology businesses. The index compares data from technology companies to the broader S&P 500 as well as a subset of Silicon Valley-based technology companies.
About Spencer Stuart
Spencer Stuart is one of the world’s leading executive search consulting firms. Privately held since 1956, Spencer Stuart applies its extensive knowledge of industries, functions and talent to advise select clients — ranging from major multinationals to emerging companies to nonprofit organizations — and address their leadership requirements. Through 54 offices in 29 countries and a broad range of practice groups, Spencer Stuart consultants focus on senior-level executive search, board director appointments, succession planning and in-depth senior executive management assessments.