2012 Top General Counsel Compensation Report

Posted by Noam Noked, co-editor, HLS Forum on Corporate Governance and Financial Regulation, on Monday February 4, 2013 at 9:45 am
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Editor’s Note: The following post comes to us from David Chun, CEO and founder of Equilar, and is based on the executive summary of Equilar’s 2012 In-Depth Top General Counsel Compensation Report; the full publication is available here.

Companies face a growing number of legal challenges, from patent wars to increased regulation from bills like Dodd-Frank to highly scrutinized mergers and acquisitions. With all these challenges the services of General Counsels cannot be undervalued in today’s economic climate. The General Counsel’s role has grown in dimension as companies have an increasing need for their top legal officer to set patent strategy, protect the company from harmful litigation while also overseeing increasingly complex legal aspects of M&A transactions. Although typically among a company’s leading executives, often reporting directly to the Chief Executive Officer, compensation for General Counsels is not always included in proxy statements.

Equilar’s Top 25 Senior Officer Compensation Survey offers a new source of General Counsels’ compensation data at a wide range of companies. The 2012 Survey includes data from more than one-third of Fortune 1000 companies, across a representative sampling of industries. Fortune 1000 participants in the 2012 Survey reported a total of 404 General Counsels. Equilar used this data to create an in-depth look at the compensation packages received by General Counsels at these companies.

In addition to providing a summary of compensation, this report presents an analysis of perquisites and award structure, and offers an overview of differences in General Counsel pay across industry, company size, tenure level, and reporting level.

Key Findings

Compensation

  • The median total compensation for General Counsels at Fortune 1000 companies, as reported in Equilar’s 2012 Top 25 Survey, was $1,409,982.
  • General Counsels who reported directly to the CEO had a median pay of $1,549,887, 50.2 percent higher than those further down the corporate hierarchy.
  • The median General Counsel pay at companies with more than $20 billion in revenue was $2,769,250, while median pay at companies with $10-$20 billion in revenue was $1,833,752.
  • Companies in the Technology, Media, and Telecom industry, Food and Beverage industry, and Finance and Insurance industry paid their General Counsels more than any other industry.

Change in Pay

  • For the 136 General Counsels at Fortune 1000 companies that participated in both Equilar’s 2012 and 2011 Top 25 Surveys, median total compensation increased 2.4 percent this year compared to the previous year. The median value of performance-based awards also went up,
    rising 4.4 percent.

Perquisites

  • 69.1 percent of General Counsels at Fortune 1000 companies in the Survey were eligible to receive perquisites.
  • In general, perquisite eligibility shows a positive correlation with company revenue and tenure.
  • 69.3 percent of General Counsels who reported to the CEO were eligible to receive perquisites, while 68.3 percent of General Counsels who did not report to the CEO were eligible.
  • Despite having the lowest median total compensation, General Counsels in the Retail and Consumer industry had the third highest level of perquisite eligibility, at 76.5 percent.

Award Structure

  • 49.9 percent of General Counsels received two unique award vehicles, while an additional 28.6 percent received three unique vehicles.
    Public Data
  • The top 3 law schools attended by Fortune 500 General Counsels were Harvard, Georgetown University, and University of Virginia with 16, 12, and 9 alumni respectively.
  • Of the 175 General Counsels disclosed in public proxy filings, 148 were male and 27 were female.
  • There was little difference between total compensation for male and female General Counsels at Fortune 500 companies. The median total compensation was $1,111,578 for males and $1,285,063 for females.

 

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