After a plateauing of fees, the pay of non-executive directors in the UK's largest companies is back on the rise.
This is the conclusion from PwC's annual non-executive director report, which is based on information from FTSE350 and FTSE Small Cap companies.
It revealed that FTSE100 chairmen saw a 3 per cent increase in their fees in 2014 to £373,000 (up from 361,000 in 2013).
Non-executive directors saw a rise of 7 per cent for their base fees to £65,000 in 2014 (up from £61,000 in 2013).
This follows a plateauing of fees in 2013 after five years of increases for both chairman and non-executives. Fee increases previously hit highs of over 15 per cent in 2008 and 11 per cent in 2009.
However, despite the fee increase in 2014, the Big Four auditor predicts that the way non-executives are paid will change.
Fiona Camenzuli, partner in PwC’s pay, performance and risk team, explained: "Despite many non-executives seeing a return to fee increases in 2014, I believe the days of substantial fee increases every couple of years are over.
"A large number of the UK’s largest companies now have an annual review cycle for non-executive fees and are moving towards awarding increases that are more in line with any given to executives and wider employees. We therefore expect a period of more gradual increases to non-executive directors’ fees in general."
Camenzuli said that many companies are not there yet, with rises to non-executive fees still higher than the general population due to the increasing demands of the role.
"In our experience, non-executive director roles are becoming increasingly challenging, time-consuming and carry a greater reputational risk and some companies will need to make step changes to fees to reflect this if they have not done so in recent years," she continued.
"Finding the right people, with the right background and skills to navigate the increasingly complex environment can be tough and a premium will often have to be paid.
"It will be a balancing act for companies to reward non-executives for their increase responsibilities and the complexity of the role as the pace of regulatory change continues, while at the same time recognising pay increases for employees and executives."