Compensation for general counsel working at big Texas companies went up—way up—in 2017.

The average GC pay package at 52 big Texas companies increased by 9.9 percent in 2017, coming in at $2,744,148, according to Texas Lawyer's annual Corporate Roster. That hefty compensation compares quite favorably with an average of $2,497,311 in 2016 for 48 GCs who were among the best paid executives at their companies.

It's the second year in a row for improvement in GC compensation at the big Texas companies that appear on the Fortune 1000 list. Average compensation improved by 6.5 percent in 2016 compared with the year before, Things weren't as rosy in 2015, when average GC pay packages at big Texas companies declined by 11 percent compared with 2014.

To put the pay packages into context, compare them to what big firm partners in Texas make. The general counsel who are among their company's highest-paid executives make a lot more money on average than the average partner in large firms based in Texas. In 2017, profits per partner at the 20 highest-grossing firms in Texas averaged $1,180,450, according to Texas Lawyer's Annual Report on Firm Finance. Those average profits per partner are certainly nothing to scoff at, but the amount is less than half of what the average big-company GC got in total compensation in 2017.

View the Chart: Texas' Best-Paid General Counsel

Executive compensation consultant Brent Longnecker, chairman and chief executive officer of Longnecker & Associates of Houston, said the increasing responsibilities of general counsel at big companies go a long way toward explaining why pay packages are increasing.

“It would be easy to say that we are enjoying some good boom times in Texas, so everybody's pay is up, but I think the GC position is becoming more and more valuable out there,” Longnecker said.

He noted that GCs now have greater responsibility for areas such as corporate strategy and cybersecurity.

View the Chart: Option Exercises and Stock Vesting

The strength of the oil and gas industry, which has recovered over the last year or so in Texas, is another factor contributing to higher pay packages for GCs at big Texas companies because so many of them are in the energy sector, said Longnecker.

David Bixby, managing director in Houston for Pearl Meyer & Partners, another executive compensation consulting company, also pointed to the recovery in the oil and gas business over the last year or so as a factor contributing to the higher executive compensation.

For 2017, Robb Voyles, executive vice president, secretary and general counsel of Houston-based Halliburton Co., racked up the highest total compensation for GCs at big Texas companies, with $8,845,674, including equity compensation valued at $3,802,108. For part of 2017, Voyles also served as interim chief financial officer at Halliburton.

Voyles, who had been a senior partner with Baker Botts before joining Halliburton in 2013, did not immediately respond to an email seeking comment

Robert Reeves, executive vice president, law, and chief administrative officer at Anadarko Petroleum Corp. in The Woodlands, was second on the list, with total compensation in 2017 of $6,265,083, including equity valued at $3,747,575.

David McAtee II of AT&T of Dallas, Paula Johnson of Phillips 66 Co. of Houston, and Marcia Backus of Occidental Petroleum Corp. of Houston round out the top five. Each of the five highest-paid GCs received total compensation in excess of $5 million. [view chart]

Of the 52 general counsel on the Corporate Roster chart, all but three of them earned  compensation in 2017 totaling at least $1 million, including the value of their equity compensation.

The total compensation for John Ale, senior vice president, general counsel and secretary of Southwestern Energy of Spring, more than doubled in 2017, compared with 2016, giving him the largest percentage increase for the year. His  compensation totaled $2,601,455 in 2017, including equity valued at $1,713,295. Ale did not immediately return a telephone message.

Others with big pay hikes for the year include Scott Peterson, former vice president, general counsel and secretary of Benchmark Electronics of Angleton, who saw his total compensation increase by 94.9 percent in 2017. His pay package totaled $1,519,031 including equity valued at $649,259.  John Killea, president, chief legal offices and chief compliance officer of Stewart Information Services of Houston, whose 2017 total compensation of $1,832,714 included equity valued at $1,081,379, marked an 82.8 percent improvement.

Robert Walls, executive vice president and general counsel of iHeartMedia, whose pay package increased by 83.5 percent in 2016, posted another large increase of 77 percent in 2017. His compensation totaled $4,622,500, including no equity compensation but a large bonus.

Texas Lawyer has reported on general counsel compensation since 1993, when it reported on the 1992 compensation of Texas GCs on the Fortune 500. This year's Corporate Roster reports on the pay packages going to GCs at 52 Texas companies on the Fortune 1000.

METHODOLOGY

To compile the Corporate roster, Texas Lawyer examined executive compensation at the 94 Texas companies on this year's Fortune 1000, with ALM Legal Intelligence providing research. Compensation information is included in the financial reports the companies file each year with the U.S. Securities and Exchange Commission. The pay package information is reported in proxy statements or 10-k reports.

In the SEC filings, the companies report the total compensation going to their chief executive officer, chief financial officer and the three other highest-paid executives. Their pay packages include salary and bonus, and the value of equity compensation that can include time-based and performance-based restricted stock or unit awards and stock or unit options.

The Corporate Roster includes two charts. “Texas' Best-Paid General Counsel” lists the total compensation paid in 2017 to the 52 GCs at Texas companies where the chief legal officer is among the five highest-paid executives. “Option Exercises and Stock Vesting” reports on the best-paid general counsel who exercised stock or unit options during 2017, or who had restricted stock or units that vested during the year.

General counsel from other Texas companies on the Fortune 1000 do not appear on the best-paid chart because they are not among the five highest-paid executives with compensation reported in their companies financial filings. A few Texas companies do not have a general counsel.