Fees paid to investment trust boards soared in 2014

Fees paid to investment trust boards soared in 2014

The fees paid to investment trust board members increased substantially in 2014 as non-executive directors increasingly commanded a premium price.

Although there has been significant downward pressure on the fees paid to managers of investment trusts, research from Trust Associates has found the opposite is true when it comes to trusts’ boards.

The research, which examined 216 trusts with average net assets of £487m, found the average fee paid to non-executive directors rose by 4.7 per cent in 2014.

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The amount paid to non-executive directors (NEDs) has now nearly doubled in the past decade, with the average salary for trust chairmen having risen from around £18,000 in 2004 to more than £34,000 in 2014.

Trust Associates said the trend looks to have continued into 2015, with two-thirds of the trusts who have so far announced their fees for NEDs this year having raised them.

Trust Associates said NED fees “clearly needed to rise over the last decade” due to increased responsibilities around issues such as corporate governance.

But it warned in the future “increases above inflation may be hard to justify in the current environment of very low inflation, unless such increases are more than matched by growth in the capital value or the dividend.”