For the second consecutive year, compensation for outside directors at the nation's largest corporations increased modestly, according to an annual analysis of Fortune 500 companies by global professional services firm Towers Watson. Although overall pay levels were stable, companies are continuing to refine the design of their director pay packages in response to both internal and external pressures, it says.

Towers Watson found that total compensation for directors in 2011 climbed 5% over 2010 levels, on par with a 6% median increase in director compensation in 2010. Much of the increase was attributed to rising levels of stock compensation and higher stock prices. Total direct compensation (including cash pay and annual or recurring stock awards) increased in 2011 to a median value of $220,000, up 5% from 2010. More than half (55%) of director pay came from equity in 2011, while 45% was from cash.

The survey found a continuing trend to eliminate board and committee meeting fees in favor of fixed retainers. In 2011, less than one-third (32%) of companies paid board meeting fees, half of those that did in 2004. In fiscal 2011, 30 companies evaluated in the study eliminated per-meeting fees while increasing their annual cash retainers by a median of $27,500 to offset the loss.

Rather than eliminating meeting fees entirely, some companies have adopted a policy under which directors are paid a per-meeting fee beginning after they've attended a specified number of meetings each year, according to Towers Watson. Nine companies adopted this kind of policy in the past year, up from three the year before.

The study points out that since the passage of the Dodd-Frank Act in 2010 there has been speculation about an increase in compensation committee pay given their increased responsibilities. It found, however, that while this pay has increased modestly it still lags behind pay for audit committee members, “who have received a premium ever since the passage of Sarbanes-Oxley.”

The retainer paid to governance committee members increased, with the median value for service on this committee grew to $7,500 in fiscal 2011, up from $6,200 in the prior year. This is seen, potentially, as a sign that “the pay gap among the audit, compensation and governance committees is closing,” according to the study.

Among the other survey findings:

40% of companies separate the roles of CEO and board chair, roughly the same as in 2010. At the median, non-executive board chairs received an additional $150,000 in incremental pay above and beyond what was paid for regular board service.

More companies established stock ownership guidelines and retention policies for their director pay programs. In 2011, 87% of companies had either or both types of mandates, up 4% from 2010.However, the median value of stock ownership required for directors subject to stock ownership guidelines remained unchanged at $300,000.

The study was based on compensation for outside directors at 468 publicly owned Fortune 500 companies that filed their fiscal year 2011 proxy by June 30, 2012.