GC Pay Is Up for Many but More in Some Sectors Than Others: Survey
While most GCs have been getting raises, the money varied based on the size of the company and the industry in which it operates.
October 29, 2018 at 02:08 PM
4 minute read
Paychecks got bigger last year for many of the top lawyers and executives at some of the nation's largest companies—though some groups have been receiving larger pay bumps than their colleagues, according to a new study.
General counsel received a larger percentage increase than their bosses, though CEOs were paid much more to start: The total median pay for CEOs who work for Equilar 500 companies, a revenue-based index of publicly traded companies in the U.S., increased 3.5 percent from 2016 to 2017, while general counsel at those same companies saw a 6.7 overall pay increase.
But CEOs at companies with between $10 and $20 billion in revenue made four times more than their GCs.
That's according to Equilar's latest “General Counsel Pay Trends” study, which is based on SEC filings from fiscal year 2016 to 2017.
The biggest takeaway from the study is that compensation “increased substantially” for general counsel from the previous year, when they saw a more modest overall pay increase of about 4 percent, according to Robert Barker, a managing partner at executive search consulting firm BarkerGilmore. He contributed to Equilar's report.
“It has to do with the fact that the economy is doing well and GCs are being asked to do more,” Barker said. “They're taking on additional roles in the company, such as government affairs and chief administrative officer.”
While most GCs have been getting raises, the size of the company and the industry in which it operates had a lot to do with how much they received, with GCs at smaller companies getting larger percentage increases.
The average overall pay for GCs at smaller companies with less than $5 billion in revenue grew by nearly 22 percent. GCs at larger companies had more modest pay increases: 6.6 percent at businesses with $10 to $15 billion in revenue and 0.9 percent at companies with more than $20 billion in revenue.
GCs at the larger companies unsurprisingly earned more than their colleagues at smaller operations, however: Median total compensation at companies with revenue greater than $20 billion was $4.5 million, nearly $2 million more than the median pay at companies with revenue between $10 and $20 billion.
Meanwhile, top lawyers at companies with revenue between $5 and $10 billion saw their total median compensation fall by 3.3 percent.
What's behind that development is not exactly clear. But the study notes that “determining the actual worth of a general counsel is not cut and dry. Several factors including leadership ability, internal equity, scope of responsibility, industrial sector, sophistication of legal challenges, regulatory concerns, strength of internal relationships and shareholder return all come into play.”
Things were brighter in the basic materials sector, where GC pay jumped more than 27 percent. Top lawyers for tech and industrial companies also saw overall pay increases of 26 and 25 percent, respectively.
But continuing the best-of-times worst-of-times trend, pay for GCs in the utilities and financial sectors declined by 16.4 percent and 6 percent, respectively.
Larger companies tied more compensation to performance incentives. The largest companies with more than $20 billion in revenue gave their GCs almost twice as much in performance incentives than companies in the $10 to $20 billion revenue realm.
“Companies with a revenue greater than $5 billion tend to grant anywhere from $275,000 to $300,000 in stock awards to their GCs, while companies with below $5 billion in revenue grant about half that amount,” the study states.
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