While the economy hit some sour notes, many directors of Chattanooga area public companies didn't sing the blues last year.
Four of every 10 nonexecutive directors of the companies saw increases in their compensation in 2009, a review shows.
In the cases in which director pay fell, it was often due to the value of company shares dropping, according to Securities and Exchange Commission documents and an expert in the field.
"Some of what they're paid is in stock. If there is change in stock value, that could impact what they're making," said Paul Hodgson with the Portland, Maine-based Corporate Library, which does corporate governance research.
About 60 nonexecutive directors serve on boards of the nine Chattanooga area companies. Some executives serve on their company boards as well, though they're not usually compensated specifically for those duties.
Topping nonexecutive compensation in the area last year was Jon S. Fossel, chairman of the board of Unum Group, Chattanooga's biggest publicly held company.
He received compensation valued at $318,039 in 2009, up from $310,416 in 2008, SEC reports show.
Most of the increase came in the "all other compensation" category. This could include matching gifts made by the company on behalf of the director to nonprofits or educational institutions, according to the insurer. Or, a company filing said, the amount could be related to travel expenses of a spouse or guest in connection with board meetings.
Including Mr. Fossil, most of Unum's 11 directors received increases, though the amounts were relatively small.
Fees paid for attending meetings, the value of stock awards and other compensation for Unum directors were "generally flat," said Jim Sabourin, the insurer's vice president for corporate communications.
Mr. Sabourin said that with more than a dozen consecutive quarters of profitability, Unum directors "earn every penny."
He said Unum, like many other companies, benchmarks its board pay with similar businesses, and directors' work is more than attending four meetings annually.
"There are far more committee meetings. There are on-site visits they do...midnight phone calls. There's a lot that goes into being a board member that's not obvious to the lay person," he said.
Each of Unum's board members were compensated in the range of $157,000 to $189,000 except for Mr. Fossil.
Mohawk Industries
Larry W. McCurdy, a board member for floorcovering giant Mohawk Industries, was next in non-executive compensation in the region.
Mr. McCurdy drew $116,925 last year, according to Mohawk's SEC report. That was down from $162,823 the year before.
All of Mohawk's non-executive directors, except one, received less compensation in 2009 than the year before, reports show. The value of stock option awards were cut sharply while the company dealt with the housing downturn.
Also listed in Mohawk's SEC documents under director compensation was Frans G. De Cock. He brought in over $785,000, according to the company's filing.
The company said Mr. De Cock did not receive fees or remuneration for his services as a member of the board, but he drew compensation for consulting services.
The Calhoun, Ga.-based business reported that his compensation included fees related to a service agreement concerning Mohawk's earlier buyout of Unilin, which Mr. De Cock formerly headed. Mr. De Cock retired as president of Unilin effective Jan. 1, 2009.
Among other area companies, all of the directors of banking company First Security Group received increases last year, as did directors of tow truck maker Miller Industries.
At FSG, its six non-executive directors drew between $43,000 and $61,000, according to SEC documents. That's up from a range of $35,000 to $51,000 in 2008.
Rodger Holley, the bank's chief executive, said its directors are working harder because of the recession, and they are meeting more.
While option awards fell last year at FSG, fees earned or cash pay grew, documents show.
At Miller, all three non-employee directors received $74,300 in compensation last year. That's up from $68,000 the prior year.
Meanwhile, all the non-executive directors at Chattanooga-based shopping center developer CBL & Associates Inc. received less compensation. That also held true at carpet company Dixie Group.
Experts said board compensation has been rising in recent years. But, Mr. Hodgson noted that he expected 2009 director pay to follow executive pay down amid the rocky economy.
A recent analysis by Hewitt Associates showed total director compensation at over 700 public companies was down about 4 percent last year.
Paul Lapides, who directs the Corporate Governance Center at Kennesaw State University in Kennesaw, Ga., said board members are working harder to comply with federal regulatory requirements such as Sarbanes Oxley, the heart of the government's response to accounting scandals at Enron and WorldCom.
"They're expected to do more work," he said.
Online: Hear Paul Hodgson talk about director compensation. Comment.