November 7, 2012

How Much Does a GC Make? Equilar's General Counsel Pay Study

In my experience, there is no more widely read document than one that reveals how much others in similar situations make. It's the bling baby. $$$.

So folks should be excited to read Equilar's new study on general counsel pay. Here are the key findings:

- How Much - General Counsel's pay reaches $1.4 million. The median total compensation for General Counsels at Fortune 1000 companies, as reported in Equilar's 2012 Top 25 Survey, was $1,409,982. Chief executives' pay calculated for 2011 among S&P 500 companies revealed a median total pay figure of $9.6 million.

- Growth Rate - General Counsel's pay growth outpaces CEOs and CFOs in 2011. For the 136 General Counsels at Fortune 1000 companies that participated in both Equilar's 2012 and 2011 Top 25 Surveys, median total compensation increased 2.4 percent in 2012 compared to the previous year. In 2011, the increase was 12.8 percent. That growth is more than the 6.2 and 8.9 percent growth of S&P 500 chief executive and chief financial officers over the same time frame, respectively.

- Industry Breakdown - Technology and Media CEOs replace Finance as highest paid industry. Companies in the Technology, Media, & Telecom industry ($1,679,000), Food & Beverage industry ($1,527,000) and Finance & Insurance industry ($1,521,000) paid their General Counsels more than any other industry. Last year, the Finance & Insurance industry had the highest pay. The lowest paid industries in 2012 were Retail & Consumer ($1,146,000) and Business Services ($1,161,000).

- GC vs. Others - The General Counsel role is replacing operational executives in importance. The number of General Counsels identified as named executive officers among the S&P 1500 index has grown from 494 individuals in 2007 to 591 individuals in 2011, a 20.9 percent increase. The importance of the legal position appears to be pushing out the operational executives from the five highest paid positions as the number of chief operating officers and vice presidents of operations have fallen by 13.3 percent, a decrease from 835 in 2007 to 724 in 2011.

- Equity Levels - Most GCs receive at least two types of equity vehicles. 49.9 percent of General Counsels received two unique award vehicles, while 28.6 percent received three unique vehicles. The most common vehicles are time-based stock, time-based options, and performance-based stock which were granted to 63.5, 61.0, and 62.7 percent of the General Counsels, respectively.

- Law School Matters? - Harvard tops all law schools with the most alumni serving in General Counsel roles. The top 3 law schools attended by Fortune 500 General Counsels were Harvard, Georgetown University, and the University of Virginia with 16, 12, and 9 alumni, respectively. Those Law Schools are ranked as number 3, 13, and 7 by U.S. News and World Reports' Best Law Schools Rankings, respectively. The top ranked schools, Yale and Stanford, did not appear in the top 10.

- Gender Breakdown - More women serve as General Counsels than as Chief Executive Officers. Of the 175 General Counsels disclosed in public proxy filings, 148 were male and 27 were female (15 Percent). 3 percent of chief executive officers among S&P 1500 companies are female .

- Gender Pay Gap? - Male General Counsels receive 6.7 percent more pay than their female counterparts. The difference between median total compensation for male and female General Counsels at Fortune 500 companies was 6.7 percent, $2,263,577 for males and $2,120,764 for females.

Craziest Idea of All Time? "Human Capital Discussion & Analysis"

I've held off blogging on this "Human Capital Discussion & Analysis" proposal by the Society for Human Resource Management because the thing was so laughable that I couldn't take it seriously. But last month, the SHRM issued a second draft of its proposal. Wow!

The SHRM's proposal would need to be adopted by the American National Standards Institute and would require public companies to prepare a Human Capital Discussion & Analysis, along the lines of the CD&A and MD&A except the focus would be disclosure of almost every corporate cost associated with the hiring, retention, and training of employees and contingent workers, plus detailed information regarding how the company is organized and staffed. I'm not sure exactly how they would pressure the SEC to require this. The HR Policy Association has been keeping track of comment letters submitted on this, etc.

Our New "Business Disclosure Handbook"

Spanking brand new. Posted in our "Business Disclosure" Practice Area, this comprehensive "Business Disclosure Handbook" provides a heap of practical guidance about Item 101 of Regulation S-K. This one is a real gem - 31 pages of practical guidance...

- Broc Romanek