What do people earn for a living?
It’s a question not many of us like to ask, and even fewer of us like to answer, and yet we are all desperate to know the truth.
And that is no different regarding the estimated salary of a non-executive director.
However, with the roles and responsibilities of a NED differing significantly depending on the business and the employee, it can be tricky to gauge.
Here, we will look at the average UK pay for non-executive directors, how it compares to other English-speaking countries, and what is expected of you for that remuneration.
Non-executive Director: A Deeper Dive
First, let’s quickly look at the daily duties of a non-executive director.
If you are already working as a NED, you might want to skip this section, but it could be worth checking that your current employers aren’t asking you to do anything they shouldn’t!
A non-executive director (NED) is not technically employed by the company they work for, as the aim is for them to be completely impartial in their decision-making, advice, and guidance.
As a result, NEDs don’t tend to get involved in a business’s day-to-day jobs, such as managing sales, overseeing staff, and other hands-on tasks.
Instead, NEDs play a huge role in making plans, strategising, and making policies. They tend to oversee the executive directors directly employed by the company and act in the interest of stakeholders.
Want to learn more about how to become a non-executive director? Read our guide here.
UK Non-Executive Directors Pay
So, let’s get to the question you probably came here to have answered.
What do UK-based non-executive directors get paid?
Well, as you would expect, the answer is not exact and varies depending on the size of the business, the industry of the business, and the experience of the employee.
But you already know this, as it’s the case for any role!
According to Board Appointments, the basic retainer a non-executive director can expect to get paid is around £70,000, alongside any potential additional remuneration, such as bonuses for performance or extra duties.
Booking Appointments notes that almost all the companies they surveyed offer an additional fee to any NEDs if they chair a committee, or they act as company chair, or they help out with audits and other financial duties.
As you expect, this salary is the UK average and will fluctuate depending on the experience of the employee or the business they work for.
For example, a relatively inexperienced NED working for a charity may not even receive a salary, whereas a highly reputable, experienced NED working for a large multinational will expect to be paid much more than £70.000.
Global Non-Executive Directors Pay
As you can imagine, the non-executive director’s salary differs significantly, depending on your location.
If you are interested in making the most money possible from a role as a NED, you might want to consider moving to the US.
On average, a non-executive director earns an eye-watering $300,000 per year, significantly more than the UK average.
It’s important to note that these estimates are often based on slightly biased surveys, but it gives a good example of how much can be made working as a NED in the US.
In comparison, the pay for a NED in Australia is much more in keeping with what a UK NED can expect to earn.
NED jobs in Sydney, Australia, pay anywhere from $50,000 to $80,000.
Still, not a bad living!
Finally, if you decide to move on to pastures-new and relocate to Canada, NED pay is estimated at around $135,00 CAD. The estimated salary for a relatively inexperienced Canadian NED is $85,000 CAD, and a senior-level non-executive director can expect to earn as much as $220,000 CAD.
Other Board Members: Salary Comparison
Role: The chairman is in charge of heading the committee, overseeing board meetings, and is the general lead for the company. The board members elect the chairman, although it tends to be the CEO in most instances.
Remuneration: £72,293 – According to PayScale
Role: A managing director monitors how the business functions and provides management and guidance to ensure the business continues to be profitable and successful. There is no limit to how many managing directors a business can employ.
Remuneration: £71,290 – According to PayScale
Role: An executive director is actively involved in the business operations, finances, and performance of the business. Unlike a NED, the executive director is employed by the company, is paid by the business, and is much more hands-on in the day-to-day running of the business.
Remuneration: £84,217 – According to PayScale
Final Thoughts on UK Non-Executive Director Salary
As you can see, many board appointments will earn more than a NED in the UK.
But that’s not why people become non-executive directors.
People become NEDs in the knowledge that their day-to-day decisions significantly impact how the business operates.
If you are interested in learning more about how you can start a career path that will help you become a NED, or you have noticed your pay does not match the UK average, and you feel undervalued, contact us today, and we’ll help you find your dream career move.
Frequently Asked Questions About Non-Executive Director Remuneration
Do you get paid as a non-executive director?
When working as a non-executive director, you get paid in the same way as the company’s employees, but you are not technically classed as one.
Instead, your pay is identified as “dividends” or “directors‘ fees.”
What is a non-executive director’s UK salary?
In the UK, on average, non-executive directors earn £40,000, depending on the company. NEDs can earn as little as £26,000, or senior independent directors can earn as much as £78,000.
What does a non-executive director do?
NEDs offer independent oversight of how the business should be run, ensuring it stays within all the necessary rules and regulations. They also provide support with implementing strategies that will help the business continue to move forwards.
Is a non-executive director a CEO?
No, a non-executive director and a CEO are two separate roles. Where a CEO handles the day-to-day running of the business, a NED takes a less hands-on approach, taking a more holistic approach.