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outside director business definition
A member of a firm's board of directors who is not employed in another capacity by that firm. An example is the president of one firm who serves as a director of another firm. Some people believe that having some outside directors is necessary to give a board balance and to protect stockholders' interests. Compare inside director.
Case Study Outside directors make good money for part-time work. In fact, nonemployee directors of many companies are paid more than most working individuals (indeed, most working families) earn during a full year's employment. In its 2007 annual proxy statement, Wyndham Worldwide (formerly part of Cendant Corporation) stated that each nonemployee director would earn an annual retainer of $150,000. Directors earned an additional $5,000 to $20,000 for each committee assignment. Some directors were members of two committees. Nonemployee directors were paid half in cash and half in deferred stock units. In addition to the retainer and committee membership compensation, outside directors each received a $75,000 equity grant that could be exchanged for shares of common stock following retirement or termination of service from the board for any reason. Directors were also provided with company-paid life insurance.
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