NED Compensation Benchmarking

NED Capital Knowledge Centre  |  Adrian Lawrence FCA, Founder  |  Updated June 2026

Non-executive director fees in the UK vary substantially by company type, size, sector, committee responsibilities and geography. This guide provides current market benchmarks for NED compensation across the main UK board appointment categories — from FTSE 100 companies through to PE-backed businesses, private companies, housing associations and NHS trusts. The data reflects NED Capital’s direct market knowledge from active NED placement across all these sectors and is updated periodically to reflect market movement.

This guide covers fee structures, committee supplements, chair premia, equity participation in PE and private company contexts, the tax treatment of NED fees and practical guidance on setting and negotiating NED compensation.

How NED Fees Are Structured

NED compensation is structured differently from executive remuneration. Understanding the structure is important before examining the specific benchmarks.

Base NED fee. The core annual fee for the standard NED role — attendance at board meetings, preparation, committee membership and between-meeting engagement. This is the reference point for all other fee supplements. It reflects the basic time commitment of the NED role, typically 15–30 days per year for most appointment types.

Committee chair supplement. NEDs who chair a board committee — audit, remuneration, nomination or any other committee — receive an additional fee over and above the base NED fee. Committee chair roles carry greater time commitment and governance responsibility than standard committee membership, which the supplement reflects.

Senior Independent Director supplement. The Senior Independent Director (SID) — the NED designated as the primary governance contact for shareholders seeking to raise concerns outside the normal chair-CEO-CFO channels — typically receives an additional fee over the base NED fee. The SID role carries specific responsibilities including leading the chairman evaluation process.

Chair fee. The non-executive chair of the board is compensated at a substantially higher level than a standard NED — reflecting the chair’s greater time commitment (typically 30–60 days per year), the leadership responsibility of the role and its seniority in the governance structure. Chair fees are set separately from NED fees rather than as a supplement to the base NED fee.

Equity component. In PE-backed companies, growth equity-backed businesses and some private company contexts, NED compensation includes an equity component alongside the cash fee — share options, sweet equity participation or co-investment rights that align the NED’s financial interests with the company’s exit outcome. Listed company NEDs do not typically participate in LTIP or share incentive plans, though some receive share-based fees settled in company shares.

Expense reimbursement. All NEDs are entitled to reimbursement of reasonable out-of-pocket expenses incurred in connection with their duties — travel, accommodation and similar costs. Expense reimbursement is not remuneration and is not subject to income tax where it meets the criteria for allowable expenses under HMRC rules.

FTSE 100 NED Fees

FTSE 100 NED fees reflect the governance responsibility, reputational risk, time commitment and regulatory scrutiny of serving on the boards of the UK’s largest publicly listed companies. The FRC Corporate Governance Code requires that at least half of a FTSE 350 board (excluding the chair) should be independent NEDs, creating a baseline demand for high-calibre independent directors. Committee chair fees reflect the additional time commitment and governance accountability of committee leadership — audit committee chairs in particular face increasing demands from auditors, regulators and investors.

FTSE 250 NED Fees

AIM and Smaller Listed Company NED Fees

AIM-listed company NED fees reflect the smaller market capitalisation and lower revenue base of most AIM companies compared to FTSE companies, but the governance requirements are substantive — QCA Code independence criteria, audit committee obligations and increasing investor ESG expectations create real governance demands that the fees must reflect. The wide range at AIM level reflects the significant variation in company size, sector and governance complexity across the AIM market.

Private Equity-Backed Company NED Fees

PE-backed NED compensation reflects the commercial intensity of PE board governance and the equity upside potential that distinguishes PE mandates from commercial company NED roles. The cash fee at PE level is typically lower than the equivalent listed company fee — PE portfolios are private and their NEDs are not subject to public pay disclosure scrutiny — but the equity component can be materially valuable at a successful exit. A NED who receives 0.5% sweet equity on a business with a 3x return on a £50m enterprise value has generated £750,000 in equity value on a single mandate — a return that dwarfs the cumulative cash fee.

The equity structure varies considerably by deal size and PE firm — from nominal share options at smaller deals to meaningful co-investment rights at larger transactions. We advise NED candidates on whether the equity component of a proposed PE mandate is structured appropriately given the deal economics and the NED’s governance contribution.

Private Company NED Fees

Private company NED fees reflect the company’s revenue, complexity, governance maturity and the specific expertise the NED brings. The lowest end of the SME range — sub-£10,000 — is typically found in very early stage businesses where the NED’s contribution is more advisory than formal governance. Private company NED fees are not publicly disclosed, creating greater negotiation flexibility than listed company benchmarks where fee data is publicly available in annual reports.

Private companies increasingly include an equity component in NED compensation — particularly where the business is approaching PE investment or where the founder wants to align the NED’s financial interests with the business’s growth. Share options, nominal equity or profit-sharing arrangements are all used in the private company market, and the appropriate structure depends on the company’s stage, ownership and governance objectives.

Not-for-Profit, Housing Association and NHS NED Fees

The not-for-profit sector has the most significant variation in NED compensation of any sector. Most charity trustee roles in England and Wales are unremunerated — Charity Commission for England and Wales (CCEW) guidance prohibits payment of trustees without specific authorisation or express power in the governing document. The exception is a small number of large, complex charities that have obtained CCEW authorisation to pay trustees where governance complexity justifies it.

Housing associations regulated by the Regulator of Social Housing have moved substantially toward remuneration of board members over the past decade — reflecting the increasing complexity of their governance obligations, the scale of their development and asset management activities and the difficulty of recruiting qualified board members on a purely voluntary basis.

NHS trust and foundation trust non-executive director fees are set by DHSC remuneration guidance and vary by trust size and complexity. NHS NED remuneration has increased modestly over recent years but remains significantly below commercial equivalents for comparable governance responsibility — a factor that affects the available candidate pool for NHS NED appointments.

Committee Chair Supplements — Typical Market Ranges

Committee chair supplements are paid in addition to the base NED fee and reflect the additional time commitment and governance accountability of the committee chair role. Typical ranges across the listed and regulated company market:

Audit committee chair supplement: £15,000–£40,000 above the base NED fee, reflecting the increased time commitment, the statutory responsibilities under the UK Audit Regulation and Governance Bill and the demand for finance-qualified candidates. Audit committee chair supplements are the highest of the committee chair supplements across most company types.

Remuneration committee chair supplement: £10,000–£30,000 above the base NED fee. Remuneration committees face increasing investor scrutiny and more complex executive pay structures than a decade ago — the supplement has increased accordingly.

Nomination committee chair: Often chaired by the board chair at no additional supplement, or £8,000–£20,000 where chaired by an independent NED.

Risk committee chair: Increasingly common in financial services and regulated sectors, £10,000–£25,000 above the base NED fee.

Fee Trends — How NED Compensation Has Moved

NED fees in the UK listed company market have increased broadly in line with inflation over the past decade, with above-inflation increases at the upper end of the market driven by increasing governance complexity, time commitment and reputational risk. The most significant drivers of NED fee inflation have been:

Audit committee time commitment. The increased demands of the audit regulatory environment — engagement with the FRC, the requirements of the Audit, Reporting and Governance Authority (ARGA) as it develops, increased expectations for audit quality monitoring — have materially increased audit committee chair time commitment and driven fees upward.

ESG and sustainability reporting. The addition of TCFD-aligned climate disclosure requirements, sustainability reporting obligations and the board’s oversight responsibility for ESG data has added governance scope without a corresponding reduction in existing committee responsibilities.

Director liability awareness. Increasing awareness of personal director liability exposure — from Competition and Markets Authority enforcement, FCA regulatory actions and the expanding scope of directors’ personal accountability — has contributed to upward pressure on NED fees as the risk premium of board service is more explicitly priced.

In the PE and private company market, fee increases have been more variable — driven less by regulatory requirements and more by the supply-demand dynamics of experienced PE NEDs, which have remained tight given the rapid growth in the PE-backed company market relative to the pool of genuinely experienced PE governance candidates.

Tax Treatment of NED Fees

NED fees are subject to income tax and National Insurance Contributions. The specific treatment depends on how the NED engagement is structured.

NEDs who receive fees directly as individuals — through PAYE operated by the company — are taxed at their marginal income tax rate on the fee income. The company deducts income tax and employee NIC at source and pays employer NIC on the fee. NEDs in the additional rate bracket (income over £125,140 in 2026/27) pay 45% income tax on their NED fee income.

NEDs who receive fees through a personal service company (PSC) need to assess the IR35 off-payroll working rules. HMRC’s position is that genuine NED office holders — who do not provide their services under a contract of service — should not be caught by IR35. However, HMRC’s application of this principle to specific NED engagements has been subject to challenge, and NEDs operating through PSCs are strongly advised to take specialist tax advice on their specific arrangements.

Expense reimbursement is not subject to income tax where the expenses are properly incurred in connection with the NED duties and claimed in accordance with HMRC’s allowable expenses guidance. NEDs should maintain records of all expenses claimed to support any HMRC enquiry.

Negotiating NED Fees — Guidance for Candidates

NED candidates who are offered a compensation package below the market benchmarks for the specific appointment type should understand their negotiating position and the market context.

Research the market before negotiating. The benchmarks in this guide provide a reference point, but specific fee levels depend on the company’s size, sector and governance complexity, the candidate’s specific experience profile and market demand for the NED profile at the time of appointment. A candidate whose specific profile is in high demand — a finance-qualified candidate for an audit committee chair role at a PE-backed business in a specialist sector — has stronger negotiating leverage than a generalist candidate for a standard NED role.

Consider the total package. In PE and private company contexts, the equity component of the compensation package may be as significant as the cash fee over the mandate’s duration. A candidate who focuses exclusively on cash fee negotiation may miss the more valuable compensation element. Conversely, a candidate who accepts a below-market cash fee in exchange for an equity component that turns out to be structured unfavourably has made a poor negotiation.

Use an independent search firm’s market knowledge. NED Capital advises candidates on the appropriateness of offered compensation packages as part of our placement process. Candidates who are being approached directly by companies without search firm involvement do not always have access to current market data — which creates an information asymmetry that favours the company. Knowing the current market benchmarks is the first step in any fee negotiation.

Related guides: What Is a Non-Executive Director?  |  NED Roles for Candidates  |  The Role of a PE NED  |  NED Knowledge Centre

NED Capital recruits non-executive directors across all sectors and company types. For current market fee guidance on a specific appointment, call 0203 137 2496 or see our NED Recruitment Agency page.