Mutual fund director compensation

Abstract We examine director compensation using a large sample of hand‐compiled U.S. mutual fund data. We find that director compensation is positively correlated with observable productive characteristics—workload, experience, and demographics—that capture the benefits from the directors’ monitoring effort. We also find that family‐wide policies contribute to higher director pay. However, we find no evidence that more lucrative director compensation is associated with fund performance or fees. These findings lend empirical support to the idea that mutual fund directors may play more of an administrative or compliance role.