Several factors influence board member compensation, including location, experience, and education. Learn more about how this works.
Board members typically receive compensation for their service, but similar to independent directors, they often don’t earn a salary or hourly wage. Instead, they often receive compensation via retainer fees, stock options, stock grants, and more. The amount of compensation varies depending on the size, type of organization, as well as the individual’s level of experience and expertise.
Board Member Salary
If you’re thinking about joining a board, you’re likely wondering: Do board members get paid? Yes, in most cases, but they usually receive compensation as per diem payments, stock options, or reimbursement for expenses incurred while performing their duties, not a salary.
The compensation is set by the organization’s bylaws or governing documents and may vary depending on the size and budget of the organization. In some cases, board members may receive a stipend or honorarium for their services.
Do HOA board members get paid because they serve or do they also work as volunteers? Typically not, as the primary motivation for serving on a homeowner’s association board is the opportunity to impact the community rather than benefit financially.
How Much Do Board Members Get Paid?
The average compensation for board members in the United States varies widely depending on the organization and the specific role of the board member. According to Salary.com, the median salary for board members in the United States is $74,121, but the compensation ranges between $57,137 and $91,538.
It’s also important to note the IRS has specific rules governing the payment of board members. According to the IRS, payments to board members may be considered taxable income if they are “reasonable” and “for services rendered.”
The IRS considers several factors in determining the reasonableness of board member compensation, including the time and effort required to perform the duties, the organization’s budget and resources, and the going rate for similar services in the local area.
As for the board member, the amount depends on various factors, including experience, education, certification, and additional skills.
Efficiently track and document board decisions with our Meeting Minutes Template
Factors Influencing Board Member Salary
Several factors can influence the amount of compensation a board member receives. These factors may include the following:
1. Location
The location of an organization can influence the amount of compensation a board member receives in many ways. For example:
- The cost of living in a particular location may affect the compensation amount. If a board member resides in a city with a high cost of living, they may receive higher compensation to cover their expenses.
- The going rate for similar services in the local area can influence the benefits a board member receives. If the going rate for board member services in a particular location is high, board members in that location may be more likely to receive higher compensation.
2. Years of Experience
The more experienced a board member is, the higher compensation they are eligible to receive. Seasoned board members bring a wealth of knowledge and expertise to the organization and may be better suited to understand and address the complex issues the organization may face.
In addition, board members with a great deal of experience often demonstrate strong leadership skills and a track record of success, which can be valuable assets to an organization.
3. Education
Education can influence the compensation a board member receives in various ways. For instance:
- Proficiency: Board members with advanced degrees or specialized training in a particular field may be more valuable to an organization. As a result, they may be more likely to receive higher compensation.
- Administrative skills: Board members with strong administration skills and a track record of success may be more likely to receive higher compensation.
- Ability to attract funding: Board members with a strong network of contacts and the ability to attract financing for an organization may be more likely to receive higher compensation.
4. Performance History
Strong performance history as a board member can demonstrate the knowledge, skills, and experience needed to contribute to the organization’s mission and goals. In this case, they’re inclined to receive more benefits.
In addition, a strong performance history can be critical for attracting funding and support for the organization. Funders and donors may be more likely to support an organization if they believe that it has a competent board of directors with a track record of success.
To maximize performance, organizations should consider using board intelligence software. For example, nonprofit organizations can use nonprofit board management software, which can help the nonprofit board of directors’ fiduciary duties.
OnBoard Drives Board Intelligence
Board meetings play a crucial role in achieving business success. Investing in software to enhance meeting effectiveness can help streamline the process, reduce time spent in meetings, and improve communication and collaboration among team members.
OnBoard features and capabilities easily align with your organization’s goals and objectives. Core OnBoard features include the customizable Agenda Builder, Secure Messenger with built-in 1-on-1 messaging, collaboration tools, secure document storage, and video conferencing capabilities.
Additionally, OnBoard is the most secure, simple, and effective tool to run your board meetings. The software helps board leaders improve decision-making, uncover fundamental insights, and enhance governance.
Try our meeting minutes template to ensure all necessary information is captured in a consistent and organized manner at your next board meeting. You’ll save time with a ready-made framework for recording and organizing key points of the meeting.
Frequently Asked Questions (FAQ)
The comprehensive blueprint for selecting a results-driven board management vendor.
Ready to upgrade your board’s effectiveness with OnBoard the board intelligence platform? Schedule a demo or request a free trial.
About The Author
- Adam Wire is a Content Marketing Manager at OnBoard who joined the company in 2021. A Ball State University graduate, Adam worked in various content marketing roles at Angi, USA Football, and Adult & Child Health following a 12-year career in newspapers. His favorite part of the job is problem-solving and helping teammates achieve their goals. He lives in Indianapolis with his wife and two dogs. He’s an avid sports fan and foodie who also enjoys lawn and yard work and running.
Latest entries
Board Management SoftwareApril 12, 2024Board of Directors Compliance Training: 5 Best Programs
Board Management SoftwareApril 10, 20245 Best Compliance Training Programs
Board Management SoftwareMarch 28, 20245 Advantages of an Initial Public Offering
Board Management SoftwareMarch 26, 2024Initial Public Offering Examples: 3 Companies That Went Public
