Supervisory Board Members differ on remuneration

By Mijntje Lückerath | February 6, 2016 | 2 min read

Supervisory board members do not agree on the desired amount of their remuneration or the usefulness of variable remuneration for directors. However, a large majority of them believe that the fear that directors will be leaving as a result of the pay debate is exaggerated.

This is evident from the National Supervisory Board Member Survey. Researchers Prof.dr. Mijntje Lückerath-Rovers (TIAS School for Business and Society) and Prof.dr. Auke de Bos RA (Erasmus University) published for the 9th time the results of the annual National Supervisory Board Member Survey.

This time, the survey included 387 supervisory board members from various sectors, making this the most comprehensive research in the Netherlands. The 2015 National Supervisory Board Member Survey focused specifically on remuneration. 

Remuneration of supervisory directors

Despite the fact that 51% of the supervisory board members are satisfied with their current compensation, 43% of the supervisory board members think that, in order to improve the quality of internal supervision, the remuneration  must increase. On average, supervisory board members at a listed company earn the most – over 56,000 euros. This figure is (considerably) lower in other sectors. Supervisory board members in non-listed companies, cooperatives, family businesses, and pension funds earn between 20,000 and 26,000 euros. In healthcare institutions, housing associations, and educational institutions the average is respectively 9,000, 12,000, and 6,000 euros. 

On average, the supervisory board members think a 25% increase in remuneration would be appropriate. This is called for because of a (markedly) expanded range of duties and increased activities. The current remuneration ranges from 45 to 220 euros per hour. A supervisory board member spends, on average, more than two days per month (18 hours) on his/her supervisory duties. This has been on the increase for several years. Supervisory activities at listed companies and cooperatives are the most time-consuming (around 30 hours per month, approximately one day per week).

Variable remuneration for directors
Although a large number of supervisory board members indicate that a (limited) form of variable remuneration for directors is acceptable, they are critical of and also divided over the instrument. For example, 42% of supervisory directors think that variable remuneration is ineffective, while 33% think the opposite. Fifty-three percent believe that variable remuneration offers perverse incentives, but 25% completely disagree. Half (50%) of the supervisory board members also think it does not help set the right priorities, while 28% say that it does.

Fear of directors leaving
Both in the private and the public sectors, supervisory board members think the fear of directors leaving for abroad because of the debate on remuneration exaggerated, with 67% and 70% respectively. Of the supervisory board members at listed companies, whose directors may be the most in demand abroad, 43% think that this fear is exaggerated, but 20% think it is real. 

The researchers say that "the results show that executive compensation is still a topic that can be viewed from different perspectives. It is important that we let each other know what these perspectives are, so we can conduct an open and transparent dialogue. The debate seems to get bogged down often in generalities and biased views."

The 2015 National Supervisory Board Member Survey contains many more results in terms of remuneration-related issues. The Dutch language report can be downloaded free of charge.

Knowledge area's

Grow at TIAS

At TIAS we believe in Life Long Development, continuous personal, professional and network development during and after your studies. With more knowledge, better skills and a broader network, you will be able to create more impact and be successful.

More about learning at TIAS » 

Brochure TIAS School for Business & Society

Get to know TIAS: The business school for tomorrow's leaders.