Board member compensation can include pay, shares of stock, stock options and expense reimbursement. Compensation varies based on company size, whether it is a for-profit or nonprofit corporation, and whether it is a startup or a mature company.
Board members of startups may also be company founders and perform much of the work needed to make the company operational. These members may receive pay and shares of ownership for their roles as employees or consultants but not receive additional compensation as board members.
Investors on the board may not receive personal compensation above that coming to their investment firm, which is initially in the form of shares and later may include monetary payments. Board members of small businesses and nonprofit organizations may get no compensation. Independent board members, who are neither employees nor investors but who are on the board for their expertise or network, typically receive money or shares commensurate with the value they bring to the company, assuming the company is able to compensate its board.
Some companies offer a vesting plan in which compensation is based on years of service. The company may offer 0.25 percent in stock options initially, increasing this to 1 percent after four years.