Here at footnoted, we get that being a director at a public company is a lot harder these days than it was, say, 15 or 20 years ago. It’s just not as fun as it used to be, when the pressing business at hand seemed to be how to look like you were doing actual work while at a golf resort.
Still, even we were surprised when we caught this exhibit in International Gaming’s (IGT) 10-K that was filed last week. Since it was Exhibit 10.14 and was one of 13 separate exhibits filed, we certainly understand that it was easy to miss. Not that we’re accusing IGT of burying the fact that they’ve decided to give their directors a 130% raise in a pile of paper. We’d never — and we do mean NEVER — do anything like that!
Starting Oct. 2, the company’s nine non-executive directors will now receive $150,000 each as their annual retainer. Compare that to the $65,000 base they used to receive. As the exhibit lays out, there’s also a bunch of add-on fees, plus another $150,000 in stock. So the base salary of these nine directors is $300 K and goes up from there.
We wouldn’t be surprised under this new pay scheme to find several directors making $500K or more. Indeed, a quick skim of last year’s proxy shows that even under the lower payment plan that had directors making a mere $65K in base fees, at least two directors — Chairman Philip Satre and independent director Paget Alves — each made over $400K for their work as IGT directors. We’ll leave it for others to decide how independent one can really be when they’re making over $400K a year for what can charitably be called part-time work.
And we do mean part-time work. When we dug into the proxy a bit more, we found that the company’s directors met just four times in 2010.* Now, perhaps those meetings lasted many hours or even several days (though we seriously doubt the latter). Still, it’s hard to imagine another job that pays $100K for a day’s worth of work.
*Just to clarify, the proxy is a bit vague on how many times directors met. Here’s the actual disclosure: “During fiscal 2010, our board of directors held seven meetings and acted by unanimous written consent on four other occasions. Our non-management directors met four times during fiscal 2010.” We have contacted the company for some additional clarification.
