According to an analysis of 1,475 public company proxies, Aon (NYSE: AOC) has found that increased scrutiny over corporate governance and the passage of Sarbanes-Oxley have not come without a price. A recent study showed that Board of Directors compensation has increased 23 percent across the broad market of U.S. public companies.

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Aon Consulting studied total cash compensation, total equity awards and total compensation pay levels in three market segments. Small cap companies saw the highest rise in Board compensation levels with a 25 percent increase. Large cap companies saw a trend increase of 23 percent, while mid-caps had the lowest increase at 21 percent.

Peter Lupo, New York compensation leader with Aon Consulting stated, "The time commitments and responsibilities of corporate Directors have increased, making the goal of attracting and retaining fully qualified Board members even more difficult. We already know that the time commitments for many corporate Directors will continue to increase. Next year, for example, it is highly likely that compensation committees will need to spend a substantial amount of time discussing, reviewing and revising long-term incentive compensation programs because of the likelihood that stock options will be expensed in 2005."

Because the greatest amount of committee responsibility falls on the shoulders of the committee Chair, Aon Consulting reviewed the level of Chair committee retainers and meeting fees. This analysis showed Chair retainers increasing at all levels. The only exception was the compensation committee Chair retainer for large-cap companies that was flat from 2003 to 2004. Audit and compensation committee Chair meeting fees did not increase in any market segment. In fact, regardless of the market segment, Chair meeting fees disclosed in 2003 and 2004 remained the same at $1,000 per meeting.

Lupo concluded, "Aon Consulting believes that Board of Director pay will continue to increase, with a greater emphasis on cash compensation than equity. We also expect companies to take a fresh look at the levels of committee pay. Although the trends clearly show that committee pay is increasing, does this level of compensation truly reflect the time commitments and responsibilities of committee members? Is a $5,000 annual retainer and a $1,000 meeting fee for a Chair of a Compensation Committee reasonable given the amount of time these Directors will need to spend in 2005 on compensation issues? We expect many companies will decide that it is not."

About the Study

Aon studied the corporate Director pay practices of three market segments: Small-cap companies - includes about 490 companies with revenues ranging from $100 million to $999 million, Mid-cap companies - includes about 400 companies with revenues ranging from $1 billion to $4,999 billion, and Large-cap companies - includes about 585 companies with revenues over $5 billion. The key assumptions and methodology used to construct this study are outlined below:

Board & Committee Meetings. We assumed Directors attended all regularly scheduled meetings as disclosed in the proxy statements. We did not include pay for telephonic meetings unless these meetings were disclosed as scheduled meetings. Any disclosed special meetings were also included.

Retainers. All Board and Committee retainers paid in equity were treated as cash compensation, not equity compensation.

Equity Compensation. Stock and restricted stock grants were valued based on the price of the stock at fiscal year end. Options were assumed to have a value equal to one third of a share of stock. The value of one-time equity grants was annualized over five years.

Total Cash Compensation. This assumes a director sits on two Committees and is the Chair of one Committee.

Total Compensation. This is the sum of total cash compensation plus equity.

About Aon

Aon Corporation ( http://www.aon.com/ ) is a leading provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting. The company employs approximately 51,000 professionals in its 600 offices in more than 120 countries. Backed by broad resources, industry knowledge and technical expertise, Aon professionals help a wide range of clients develop effective risk management and workforce productivity solutions.

Aon Consulting is among the top global human resources consulting firms, with 2003 revenues of $1.185 billion and 7,500 professionals in 140 offices throughout the world. Aon Consulting delivers integrated consulting solutions to help clients with employee benefits, human resources outsourcing, compensation, communication and management consulting.

   Contact:
   Dana Sohn, Aon Consulting, +1.312.381.4786, dana_sohn@aon.com
   or
   Bianca Wright, RF Binder Partners, +1.212.994.7545,
   bianca.wright@rfbinder.com

This press release contains certain statements relating to future results, which are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from either historical or anticipated results, depending on a variety of factors. Potential factors that could impact results include the general economic conditions in different countries around the world, fluctuations in global equity and fixed income markets, exchange rates, rating agency actions, resolution of pending regulatory investigations and related issues, including those related to compensation arrangements with underwriters, pension funding, ultimate paid claims may be different from actuarial estimates and actuarial estimates may change over time, changes in commercial property and casualty markets and commercial premium rates, the competitive environment, the actual costs of resolution of contingent liabilities and other loss contingencies, and the heightened level of potential errors and omissions liability arising from placements of complex policies and sophisticated reinsurance arrangements in an insurance market in which insurer reserves are under pressure. Further information, concerning the Company and its business, including factors that potentially could materially affect the Company's financial results, is contained in the Company's filings with the Securities and Exchange Commission.

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SOURCE: Aon Corporation

CONTACT: Dana Sohn of Aon Consulting, +1-312-381-4786,
dana_sohn@aon.com , or Bianca Wright of RF Binder Partners, +1-212-994-7545,
bianca.wright@rfbinder.com

Web site: http://www.aon.com/