Waste Management Inc. rose to 13 from 172 in 2011 after the board decided to pay itself for two years at once, for tax purposes. Lynn Brown, a spokeswoman for for Houston-based Waste Management, didn’t respond to requests for comment.
“There’s no independent directors’ committee that doesn’t have any directors on it,” said BHJ Partners’s Hodgson. “So it’s them sitting down and deciding they don’t want to pay taxes, for example.”
One main reason directors probably feel justified in raising their own pay is that the average number of hours has increased at least a third in the last several years to about 250-300 hours annually, said Stephen Mader, vice chairman and managing director at executive search firm Korn/Ferry International in Boston.
Regardless of its level, board compensation should be linked to the stock’s performance, said Nell Minow, a corporate- governance consultant at GMI Ratings.
“That’s a lot of money, and you don’t want to give them too much money, but I’m more concerned that we don’t tie pay to performance,” Minow said.