The placement firm, Patrick O’Callaghan and Associates and Korn/Ferry International has published a study that shows that income trust directors are receiving low pay that directors on traditional corporate boards. The study says that income trust directors earn an average of $34,823 a year compared with $54,662 at comparable corporations.  That is 57% less for a trust director, despite the comparable role and responsibility when working for the trust and corporation.

Specifically, the study compared 290 of Canada’s largest companies including all of hte companies listed in the benchmark S&P/TSX index during 2005 with one quarter of those companies being income trusts.

The authors suggested that many trusts may be large in capitalization, but are young in terms of organizational development.  And they have developed simpler (and smaller) compensation plans for directors, many based on cash only.

Only 60% of the trusts included equity incentives as part of their compensation programs for directors whereas approximately 85% of the corporations bundled in share units or stock options as part of the pay. Trusts further reported that only 6% of their directors accepted trust units when offered them as part of the cash retainer as a director, approximately 1/4 of the proportion of corporate directors who accepted equity ownership as part of their pay.

The pay for directors at a few trusts sit at the top of the Canadian corporate heap with traditional company, EnCana Corp. offering the largest pay package at $292,800. The big-pay trusts:

#3 on the list - Yellow Pages Income Fund - $223,000

#5 - Fairborne Energy Trust - $208,000

The recruiting firm said in their report that many trusts may increase their pay for directors, but particularly given the potential need for additional meetings to consider the structure for their business given pending taxes on distributions.