The 2020 GC Compensation Survey: A New Cash King
The Walt Disney Co.'s Alan Braverman has dethroned Morgan Stanley chief legal officer Eric Grossman as the highest-paid chief lawyer in the land.
July 27, 2020 at 09:00 AM
9 minute read
Cash is king and The Walt Disney Co. general counsel and senior executive vice president Alan Braverman wears the crown. Braverman has dethroned Morgan Stanley chief legal officer and executive VP Eric Grossman as the highest-paid chief lawyer in the land. Grossman dropped to the No. 2 spot after holding the title as top cash earner for the past two consecutive years. The 2020 General Counsel Compensation Report is based on Corporate Counsel affiliate ALM Intelligence's analysis of Fortune 1000 companies' 2019 Securities and Exchange Commission filings and compilation of their top lawyers' compensation data. |
- Chart: Who Made the 2020 Top-Paid GC List?
- Chart: Who Are The Top Industry Earners In 2020?
- Chart: Who Topped the 2020 Charts?
Because not every general counsel is named on their company's proxy filing, not every lawyer in the Fortune 1000 is included on our list. Our ranking is based on cash compensation, which includes salary, bonus and nonequity incentives, a post-Dodd-Frank Act form of performance-based pay. Braverman, who is based in Burbank, California, took Grossman's crown by raking in $8 million in total cash compensation last year. He earned $6,340,000 nonequity incentive compensation on top of his $1,660,061 salary. He also received more than $3 million in stock awards and $2 million in option awards. Walt Disney representatives did not respond to a request seeking details about the factors behind Braverman's pay. Meanwhile, Grossman's total cash compensation fell back down a little closer to Earth after rocketing to $8,057,786 in 2018. Last year, he made $6,938,750, which is on par with his 2017 cash compensation of $6,948,750. Grossman's salary has held steady at $1 million, but his bonus payout dropped from $7,045,000 in 2018 to $5,938,750 last year. He also didn't receive nonequity incentive comp for 2019. Morgan Stanley declined to comment on Grossman's pay history. Finance Pays, But Media Money's Not Too Shabby The financial industry continues to throw more cash at legal executives than any other sector. Last year, top lawyers in finance were paid a total of more than $90 million in cash compensation, up more than 35% from the $63 million in 2018. "It's not a surprise that finance is the top in terms of total cash," said Eliza Stoker, executive director of in-house counsel recruiting for Major, Lindsey & Africa in New York. "If you want to move in-house without a pay cut, you're probably moving to a financial services company." Of course, there's also plenty of money to be had as a top lawyer for a media firm. Braverman wasn't the only media legal exec to take home millions in cash last year. In fact, three of the top five highest-paid GCs run legal departments for media firms. Viet Dinh, chief legal and policy officer for Fox Corp., was the third highest-paid GC last year with $6 million in total cash compensation. He narrowly topped Bruce Campbell, chief development, distribution and legal officer for Discovery Inc., whose cash compensation totaled $5.9 million. "The media industry is going through a level of disruptive change due to digitization and the emergence of new platforms and content providers," noted Jason Winmill, managing partner of Argopoint, a legal department consulting firm based in Boston. "Senior leaders of media companies see value to having top talent to help them navigate these complicated new markets and assist with regulations, dynamic changes and mergers and acquisitions and industry restructuring," he said. "They're willing to pay a premium for that. There may in fact be a bit of a bidding war for legal talent within the media industry." He added, "You're not just giving away $6 million at Fox or $5 million at Discovery because you like your general counsel. It's probably because those people have a very high market value and compelling, attractive options outside your organization." Retail's Moves Beyond 'Psychic Income' Technology, energy and health care rounded out the top five highest paying industries for legal executives. But retail ranked seventh in this year's survey for having paid out more than $27 million in total cash, which was unexpected news for Stoker—even though she placed retail's highest-earning general counsel: Leigh Harlan of Tiffany & Co. Harlan made nearly $3.4 million in total cash comp. The next highest-paid retail general counsel was Don Liu of Target Corp. He took home $1.4 million. "Retail is one of those industries where I learned the phrase 'psychic income.' If you're an employee of a well-branded organization and you can point to a product on the shelf or some branded concept that your friends and family will all recognize, a lot of employers include that in how they view your compensation," Stoker said. "So it surprises me to see retail so high, because that's an industry where psychic income comes into play for the most part: 'Oh, I work for Kate Spade.'" Looking ahead, Stoker predicted that the biotech industry, which has been lumped in with the health care sector, will be so "explosively active" that it will demand its own category in the compensation rankings. "It's where the investments are being made. It's where all the hiring is happening. And it's forcing us to rethink industry sectors," she said. "As biotech continues to get stronger and stronger, it will have to be treated as its own industry and it will take a place at the top of the list." Relatively Good News on the Gender Pay Gap Just like last year, two women ranked among the top 10 highest-paid general counsel this year—Laureen Seeger of American Express Co. and Karen Seymour of Goldman Sachs Group Inc. They each brought home about $4.5 million. But the latest report suggests that the gender pay gap is narrowing. The average male general counsel's total cash compensation in 2019 was $1,216,118, while female legal executives averaged $1,136,486, a difference of about 6.7%. In 2018, the average cash compensation gap was nearly 16%, with men earning $1,277,971 while women received $1,088,788. Meanwhile, the median bonus pay for female general counsel was 1.6% higher than males last year. And the median stock awards for women legal executives were 1.9% higher than the median awards for men. "It's encouraging to see the gap closing," said Josephine Gartrell, director of Willis Towers Watson's talent and rewards practice in San Francisco. "I think it's reflective of a push on companies' parts, not only at the executive level but also the director level, to include more women and minorities in all of those different roles." John Gilmore, co-founder and managing partner at legal recruiting firm BarkerGilmore in Rochester, New York, suggested that public companies "are doing whatever they can to make sure that parity is there," at least partly because "their numbers are out there for everyone to see." "When it's time to replace a GC, these companies are doing a fantastic job of putting more women and minorities into these positions," he said. "The GCs are doing a fabulous job of making sure women and minorities who are part of the succession are getting exposure to the board, which is exactly what they need to earn that trust and be ready for the next appointment." Gilmore noted that Wells Fargo & Co. named former TD Bank Group global general counsel Ellen Patterson, an ex-partner at the New York law firm of Simpson Thacher & Bartlett, to succeed Allen Parker as general counsel in March. Parker ranked seventh in this year's report with more than $5.9 million in total cash compensation. "So already right there next year you're going to have a woman replacing Allen Parker," Gilmore said. "She did exactly the type of progression that I'm referring to. She goes from large law, goes in-house as a GC, she pays her dues, and the next thing you know she's tapped on the shoulder and goes to Wells, a much bigger organization." 'We're all wondering what to do' Salaries for legal execs have remained pretty stagnant over the last several years. The median salary for a general counsel in 2018 was $498,677. Last year, the median salary was $504,434. Only a 1.2% increase. In 2017, the median salary was $500,000. The median total cash compensation dropped 3.7%, from $988,237 to $951,688. But bonuses were a different story. The median bonus for general counsel jumped from $250,000 in 2018 to $345,302 last year, an increase of about 38%. "One way to increase your comp as a GC in 2019 wasn't to negotiate hard on the salary, it was to go after your bonus," Winmill said. During COVID-19 times, amid political and social unrest and an unpredictable financial market, it's difficult to say what might happen next week or even tomorrow. But it's worth noting that a growing number of in-house leaders, along with other executives, have already taken salary reductions this year as part of cost-cutting measures, including furloughs and layoffs, amid the coronavirus pandemic. For instance, Dinh, Fox's top lawyer, announced in April that he was giving up his entire salary through September. Meanwhile, over at Disney, Braverman's salary was reduced by 30% this year. Of course, both Dinh and Braverman, like virtually all legal executives, make the bulk of their money through stock awards, incentive compensation and bonuses. "It's hard to envision a world right now where bonuses will be up," said Todd Sirras, managing director at Semler Brossy in Los Angeles. "We would expect bonus levels to fall, but by how much is anyone's guess." He added that next year's general counsel compensation report reflecting on 2020 is bound to be "fascinating." "We're all wondering what to do—even the boards that we work with," he said. "It feels like a long time before the end of the year. So much can happen."
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