US general counsel saw salary packages climb 5% last year despite the economic downturn, says survey

Salaries for US general counsel rose last year despite the global financial crisis, according to new research by Legal Week sister title Corporate Counsel.

The magazine's 2009 GC compensation survey, which is based on in-depth research into the 2008 salary packages of the 100 best-paid general counsels in the US, found that average salaries increased by 5% to $596,393 (£354,685), while average bonuses also increased marginally – rising by just less than 1% to $1.16m (£689,870).

Bonuses differed markedly between different sectors, with GCs in the struggling auto industry making $530,230 (£315,337) on average in bonuses, compared with an average of $1m (£595,000) in the oil industry and $2.2m (£1.3m) at financial institutions. The growth in bonus and salary took the average payout to $1.8m (£1.07m), up 2.6% on 2008.

While salaries and bonuses were up, company shares, which have historically been an important component of GC compensation, plunged. The drop, unsurprising in a bear market year that saw the Dow Jones average sliding by 38%, meant average stock awards fell for the first time in years, dipping 18% to $1.1m (£654,900), with stock option awards dropping by 7% to $669,719 (£398,294).

Most of the top earning legal chiefs were in the finance industry – with an average pay of $2.8m (£1.67m), closely followed by telecoms GCs on $2.4m (£1.3m).

The highest earner was Gregory Doody of power company Calpine Corporation, who raked in $9.74m (£5.79m), with the overwhelming majority coming as a bonus.

He was closely followed by Donald Rosenberg (pictured) of telecommunications company Qualcomm Incorporated, who made his debut in the ranking with a package worth $9,676,940 (£5.71m) in salary and bonuses.

The increase despite the economic downturn did not surprise Peter Zeughauser, a California-based law firm consultant, who says that GC pay is catching up to that of outside counsel. He commented: "Maybe it would have increased another percent or two if the economy had been better."

The salary packages of GCs in the US dwarf the average earnings of most UK-based GCs, who generally earn £100,000 to £140,000, plus bonuses of between approximately 20%-30% of base salary (although GCs at the top UK blue chip companies and banks can earn packages of up to £600,000-£700,000). Amounts earned through stock options are also said to be considerably less in the UK.

Information from in-house lawyers and recruiters specialising in this area suggests that UK GC earnings have largely remained flat over the last year, with bonuses down in many instances.

Ricky Mui, director of the legal division at Robert Walters, said that while bonuses have plummeted in certain areas such as banking, they have remained steady in industries hit less hard such as energy and telecommunications.

He added: "Having gone through a number of salary and headcount freezes last year, when the market picks up we anticipate a significant lift getting underway for in-house earnings."

General counsel compensation – in numbers

  • $596,393 – average salary for a US GC
  • $1.1m – average stock award
  • $1.16m – average bonus
  • $2.2m – average 2008 bonus of GCs in financial institutions
  • $9.74m – total package of top earner, Calpine Corp's Gregory Doody
  • $9.1m – size of Qualcomm's Donald Rosenberg's 2008 bonus

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