November 21, 2013

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 at Fortune 1000 companies. Here are the key findings:

How Much – The median total compensation for General Counsels at Fortune 1000 companies was $1,613,654.

Direct Reporting to CEO – General Counsels who reported directly to the CEO had a median pay of $1,676,098, 33.2% higher than those who do not.

Impact of Company Size – General Counsel median pay at companies with more than $20 billion in revenue was $2,472,037, while median pay at companies with $10-$20 billion in revenue was $2,134,026.

Growth Rate – For the 262 General Counsels that participated in both Equilar’s 2013 and 2012 surveys, median total compensation increased 4.9% this year.

Perks – Nearly three quarters of General Counsels in the survey were eligible to receive perquisites. There was a difference in perquisite eligibility between General Counsels who report to the CEO and those who do not. Of General Counsels who reported to the CEO, 71.6% percent were eligible to receive perquisites, while 76.7% percent of General Counsels who did not report to the CEO were eligible.

Industry Breakdown – Despite not being a top five industry for highest median total compensation, General Counsels in the Food & Beverage industry had the highest level of perquisite eligibility, at 94.1%.

Gender Pay Gap – Of the 357 General Counsels disclosed in proxy filings, 295 were male and 67 were female. There was a difference in total compensation between male and female General Counsels, with a median total compensation of $1,683,694 for males and $1,534,629 for females.

Transcript: “Drilling Down – Statistical Sampling for Pay Ratios”

We have posted the transcript for our recent webcast: “Drilling Down – Statistical Sampling for Pay Ratios.”

ISS & Glass Lewis: December Deadlines For Your Peer Group Updates

As Mike Melbinger blogged yesterday on, it’s that time of the year. Here’s a note from Georgeson:

The major proxy advisory firm vote recommendations on “say-on-pay” and other executive compensation proposals are highly influenced by those advisory firms’ selection of the peer groups used to analyze a company’s pay-for-performance relative to its peers. Often the advisory firm-selected peer groups overlap with the peer group that appears in the company’s proxy statement, but there can be substantial differences that may lead to unexpected vote recommendations.

ISS and Glass Lewis consider input from companies as to what companies should appropriately be considered peers for compensation. While many issues influence the advisory firms’ recommendations on say-on-pay votes, the focal point of the analysis is pay-for-performance and peer-group selection plays an integral part in the vote analysis and recommendations. Therefore, Georgeson recommends companies take the opportunity to update these advisory firms on any changes in their selected peer groups.

Glass Lewis
Glass Lewis partners with compensation data provider, Equilar, which generates Equilar Market Peers that are subsequently used to prepare Glass Lewis’ pay-for-performance quantitative analysis. Companies in the Russell 3000 Index can submit their peer groups on Equilar’s website, and here is background on their process. To be included in Equilar’s January calculations, the deadline for updating your peer group is December 31, 2013. The next updates will not be calculated until July 2014.

The timeframe for Russell 3000 companies with meetings in spring and early summer of 2014 updates began today, November 20, and will end at 5:00 p.m. ET on December 9, 2013. Here is where you can provide peer group feedback.

If a company does not inform ISS of any such changes, ISS will typically use the peer group information as disclosed in the prior year’s proxy statement (i.e., for meetings in 2014, ISS will typically use peers disclosed in 2013). If a company has not made any changes to its peer group since its last proxy statement, no action is necessary.

As you consider submitting information on your peer group changes, please note the following:

– ISS Research will use the information as an input to its peer group formulation for purposes of its pay for performance analysis in the proxy research report, and will not share it with any third party within or outside of ISS prior to the publication of its report.
– The list of peer group companies submitted to ISS should match the list as disclosed in the 2014 proxy statement. Otherwise, ISS may apply additional scrutiny to the variance in the peer groups, as part of its pay for performance analysis.
– The peer group indicated should be the peer group used for benchmarking CEO pay for FY2013. If a company does not use peer group in setting pay for its CEO, it may still be useful for the company to provide ISS with a list of representative peers, provided the list will be disclosed in the 2014 proxy statement. If a company uses a market index or broad survey, then it can indicate to ISS the index or survey used, but ISS will not directly use such information in its peer selection.

Here is the complete list of FAQs by ISS on this topic.

– Broc Romanek