The Financial Planning Association (FPA) will pay board members $290,000 in directors’ fees during the next year.
The decision was made at this year’s FPA annual general meeting, recently held in Melbourne.
The association currently pays the employer of the chair $50,000 per year to compensate for the time that person is away from their business.
Under the new scheme, the chairman will receive $75,000. The board felt the role of the chairman now carries greater responsibilities. Directors’ fees will be set at $15,000, while external directors receive $40,000.
The FPA says the combined fees will not exceed $290,000 in the coming year but directors will be able to vary this limit in the future.
FPA chairman John Hewison told Money Management the board was reluctant to approve the increase.
“Our external director, David Elsum, suggested we look at the fee structure, and after looking at the CPAs, Institute of Accountants and Law Society, we put together a proposal for fees,” he says.
“The directors are certainly not being paid for the time they give to the association. The payment is purely token.”
FPA chief executive Ken Breakspear says these amounts are not on par with the time and commitment that board members make to the association.
“Given the size the association has become and that the directors bear liability for the governance and running of it, we felt this was a way we could compensate board members,” Breakspear says.
“This will also compensate those members from smaller planning businesses and support their participation. Failing this, we would only have participation from larger members who can afford the commitment.”
Breakspear says the board has the powers to grant fees to members but felt it should bring this to the members at the meeting.
“There was strong support at the meeting for this proposal and some comments were made then that the sums should be higher,” Breakspear says.
The funds for the fees will be drawn from the FPA budget, according to Breakspear, and the association made the necessary allowances in anticipation. The funds would also be reported annually in line with the Corporations Law.
The FPA says that in paying these fees, it will attract board members of high quality, and the payments reflect the growth of the Association and its further steps into professionalism.
“I don’t think Association members will join the board for money. It only partially makes up for the hard work,” Breakspear says.
