This post is part of an ongoing series that examines the way stock exchange independence rules relate to director compensation. We are for the most part including companies from 2017’s Fortune 500 and using information found in their 2017 proxy statements.

NASDAQ and the NYSE have similar rules with respect to director independence. NYSE Rule 303A.01 requires that each listed company’s board of directors be comprised of a majority of independent directors. A director does not qualify as “independent” if he or she has a “material relationship with the company.” NYSE Rule 303A.02(a). In addition, the director is not considered independent under NYSE Rule 303A.02(b)(ii) if the director received more than $120,000 in direct compensation, other than director’s fees, during any of the previous three years. The NYSE imposes a higher independence standard for directors serving on the company’s audit committee by requiring them to comport with Rule 10A-3 (C.F.R. §240.10A-3) (see Rule 303A.06) and requires consideration by the board of directors of certain specified factors in designating directors for the Compensation Committee. See NYSE Rule 303A.02(a)(ii).

Finally, as the Commission has noted with respect to director independence:

All compensation committee members must meet the general independence standards under NYSE’s rules in addition to the two new criteria being adopted herein. The Commission therefore expects that boards, in fulfilling their obligations, will apply this standard to each such director’s individual responsibilities as a board member, including specific committee memberships such as the compensation committee. Although personal and business relationships, related party transactions, and other matters suggested by commenters are not specified either as bright-line disqualifications or explicit factors that must be considered in evaluating a director’s independence, the Commission believes that compliance with NYSE’s rules and the provision noted above would demand consideration of such factors with respect to compensation committee members, as well as to all Independent Directors on the board.

Exchange Act Release No. 68639 (Jan. 11, 2013); see also Exchange Act Release No. 68641 (Jan. 11, 2013).

Independent directors are compensated for their service on the board.  The amount of “total compensation” can be seen from examining the director compensation table from the Metlife (NYSE: MET) 2017 proxy statement.  According to the proxy statement, the company paid the directors the following amounts:

 

Name

Fees Earned or Paid in Cash

($)

 

Stock Awards

($)

 

Option Awards

($)

 

All Other Compensation

($)

 

Total

($)

Cheryl W. Grisé

219,519

150,023

0

1,635

371,177

Carlos M. Gutierrez

150,000

150,023

0

1,635

301,658

David L. Herzog*

96,841

96,841

0

447

194,129

R. Glenn Hubbard, Ph.D.

175,000

150,023

0

6,635

331,658

Alfred F. Kelly, Jr.

185,000

150,023

0

6,635

341,658

Edward J. Kelly, II

168,269

150,023

0

1,635

319,927

William E. Kennard

170,000

150,023

0

6,635

326,658

James M. Kilts

180,000

150,023

0

6,635

336,658

Catherine R. Kinney

150,000

150,023

0

6,635

306,658

Denise M. Morrison

170,000

150,023

0

1,635

321,658

Kenton J. Sicchitanto

190,000

150,023

0

4,135

344,158

Lulu C. Wang

150,000

150,023

0

1,635

301,658

*David L. Herzog was appointed to the Board of Directors in 2016 after that year’s Annual Meeting. As a result, the Company paid Mr. Herzog a prorated annual retainer fee in advance for services from his appointment through the 2017 Annual Meeting. Approximately 50% of the retainer, or $96,841, was paid through the grant of 2,088 Shares at a grant date fair value of per Share of $46.38, the closing price of a Share on the NYSE on the grant date. The rest of the retainer was paid in $96,841 cash. For directors who were members of the Board of Directors in 2015, the retainer fee for the portion of 2016 prior to the 2016 Annual Meeting was paid in 2015.

Director Compensation. In 2016, the Board held ten meetings and the Board Committees of MetLife held a total of 39 meetings. Each of the current directors who served during 2016 attended more than 75% of the aggregate number of meetings of the Board and applicable Committees.

Director Tenure. In 2016, Ms. Grisé was the company’s lead director and the most tenured, serving on the board since 2004. Mr. Herzog held the shortest tenure, as he joined the board in 2016. All but one of the directors sit on other boards: Ms. Grisé serves as a director for PulteGroup, Inc., Mr. Gutierrez serves as a director for Occidental Petroleum Corporation and Time Warner, Inc., Mr. Herzog serves as a director for Ambac Financial Group, Inc. and DXC Technology Company, Mr. Hubbard serves as a director for Automatic Data Processing, Inc. and BlackRock Closed-End Funds, Mr. Kelly Jr. serves as a director for Visa Inc., Mr. Kelly III serves as a director for CSX Corporation and XL Group plc, Mr. Kennard serves as a director for Duke Energy Corporation, AT&T Inc., and Ford Motor Company, Mr. Kilts serves as a director for Pfizer, Inc., and a Non-Executive Director for Nielsen Holdings plc, Unifi, Inc., and Conyers Park Acquisition Corp., Ms. Kinney serves as a director for MCSI Inc. and QTS Realty Trust, Inc., and Ms. Morrison serves as a director for the Campbell Soup Company.