Director compensation is often compromised of two components: an annual advisory fee ($50k to $250k) plus a portion of the equity incentive plan.

1 2 3 $400mm TEV $200mm TEV $200mm $100mm Equity $100mm Equity $100mm Debt $100mm Debt Purchase Price Exit Price Value Created: $300 million equity proceeds $100 million equity invested $200 million value created 10% of value created(equal to $20 million in thisscenario) 40% for the CEO ($8mm)50% for other management ($10mm)10% for independent board members ($2mm) Equity IncentivePlan: Allocation ofEquity IncentivePlan:

“Senior operating executives often move to board positions toward the end of their careers because they have expertise in particular industries. They still want to contribute but don’t necessarily want to continue working full time.”

— Adam Coffey, 3x PE-backed CEO and author of The Private Equity Playbook