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Attorneys in the energy sector in Texas certainly understand the meaning of "black gold" considering data shows seven of the top 10 highest-paid legal department leaders in the state come from the energy sector, according to ALM Intelligence's General Counsel Compensation data.

"It's an internally competitive sector for talent. There is always a push to be paying as competitively as other similarly sized and prominent energy companies," Stacy Humphries, president of Pye Legal Services in Houston, said.

ALM Intelligence examined the legal executive compensation statistics of Fortune 1000 companies from 2018 Securities and Exchange Commission filings. Salaries, bonuses and non-equity incentives were taken into account when developing the list. Sixty of those general counsel and chief legal officers were from Texas.

Thaddeus W. Miller, the executive vice chairman and chief legal officer of Calpine Corporation, brought in $5,902,743 in 2018 and was the highest-paid attorney in the Texas energy sector, according to the data. The executive vice president and general counsel of Phillips 66 Company, Paula Johnson, brought in $5,322,325.

The level of compensation for the five other energy attorneys who made the list of the top 10 highest-paid GCs in Texas is not much lower. Marcia Backus, the senior vice president, general counsel and chief compliance officer of Occidental Petroleum, made $5,175,958 in 2018. P. Anthony Lannie, executive vice president and general counsel of Apache Corporation, made $4,423,423. K.B. Rose, senior vice president of legal, general counsel and corporate secretary of ConocoPhillips, made $4,407,016 in 2018. Sean N. Markowitz, general counsel and corporate secretary of Cheniere Energy, made $4,386,332. Amanda M. McMillian, executive vice president and general counsel of Anadarko Petroleum Corporation, made $4,350,094.

The most highly compensated general counsel in Texas overall in 2018 was David R. McAtee II, who serves as the senior vice president and general counsel of AT&T Inc. In 2018 his total compensation was $12,849,276.

The average total compensation for general counsel and chief legal officers in 2018 was $2,665,825, which is is a 2.8% decrease from what general counsel and chief legal officers in Texas made in 2017, according to data previously collected. In 2017, the average compensation package for those leading legal departments in Texas was $2,744,148.  2018 marks the first decline in average compensation in two years.

"I would say much of the compensation of these highly compensated executives is money on the backend. The base pay tends to be very low," Amy Krasner, founding principal at Avalon Legal Search in Houston, said.

The salaries for the seven highest-paid energy GCs in Texas in 2018 ranged from $241,938 to $913,321. However, Miller, Johnson and Backus had nonequity incentive compensation of over $1 million, which brought up their total compensation packages.

Tyler Marvin, metro market manager for Robert Half Legal in Houston, said the energy sector in Texas is one "of the largest influencers in the region."

"Most employees, in general, are well paid in oil and gas and GCs are no exception," Marvin said. "Add to that the lowest unemployment in U.S. history, the competition for talent is driving up salaries across the board."

Humphries said the ability to navigate tricky regulation and meet the needs of the energy business is why compensation is so high.

"The energy industry, particularly companies in the upstream sector, that is exploration and production, rely very heavily on their legal departments and they tend to have larger legal departments in general and stronger general counsels," Humphries said.

As the laws surrounding the energy industry become more complex, the role of the general counsel will be more essential to the success of the business. Krasner said the compensation for legal leaders in the energy industry will continue to rise because of the skills needed.

"They have developed expertise in areas that are tied to the success of these energy companies," Krasner said. "They are heavily involved in the business. The best GCs are not just excellent lawyers. They are good lawyers and understand how to drive the business."

Marvin echoed the sentiment that the energy industry demands more attention, therefore more compensation will be paid to in-house lawyers.

"GCs in this industry are typically more highly paid than their counterparts in other industries due to the complexity of these companies as well as the consistent M&A activity taking place in both good and bad economies," Marvin said.

The work these legal leaders put in for their companies is well worth the compensation, Humphries said.

"The energy industry, particular companies in the upstream sector, that is exploration and production, rely very heavily on their legal departments and they tend to have larger legal departments in general and stronger general counsels," she said.