November 2, 2017

GC Pay: “Cash (& Non-Cash) Rules Everything Around Me”

If you weren’t paid to read a proxy statement, would you ever think about looking at anything other than the summary comp table?  I know I wouldn’t – it’s just human nature to have a prurient interest in this kind of stuff. Maybe the Wu-Tang Clan put it best:

Cash Rules Everything Around Me
C.R.E.A.M. get the money
dolla dolla bill y’all. . .

Anyway, because they know that we’re dying to know, Equilar just issued a new study on General Counsel pay at 1,100 public companies. As with previous Equilar GC pay studies, this one isn’t publicly available, but here’s Equilar’s press release summarizing it.  Here are the key findings:

How Much – The median total compensation for General Counsels, broken out by revenue range was:
o Under $1 Billion: $918k
o $1 Billion to $5 Billion: $1.5 million
o $5 Billion to $15 Billion: $2.4 million
o Over $15 Billion: $3.8 million

– Equity Awards are a Big Part of Comp – Equity awards represented about 1/2 of total compensation at the smallest companies in the study, and nearly 2/3rds at the largest. However, it’s good to be at the top of the pyramid – GCs at the largest companies were awarded more than 7x the amount in stock value as those who worked for companies with less than $1 billion in revenue.

Pay Increases – Overall, GC pay rose 4% last year. The big winners were GCs of companies in the $1-5 billion range – they saw their comp increase by an average of 8.1%. Their counterparts at companies in the $5-15 billion range saw pay climb 3.3%, while those at the smallest companies surveyed received a 6.6% bump. GCs at the largest companies fared the worst – experiencing a decrease of 0.6% in compensation.

For data on broader in-house comp trends, check out this BarkerGilmore study.  It covers both private & public companies and addresses comp trends for the GC, managing counsel and senior counsel.

Securities Fraud: Do Not Disrespect the Wu-Tang Clan

So, “Harper’s” magazine published the transcripts of the jury selection in Martin Shkreli’s securities fraud case. Among his other antics, Shkreli purchased the only copy of Wu-Tang Clan’s “Once Upon a Time in Shaolin” album for $2 million – and then contrived to manufacture a bizarre & convoluted beef with the Clan.

The transcripts reveal that these shenanigans didn’t sit too well with Juror #59:

Juror #59: Your Honor, totally he is guilty and in no way can I let him slide out of anything because…

The Court: Okay. Is that your attitude toward anyone charged with a crime who has not been proven guilty?

Juror #59: It’s my attitude toward his entire demeanor, what he has done to people.

The Court: All right. We are going to excuse you, sir.

Juror #59: And he disrespected the Wu-Tang Clan.

Future defendants are on notice – do not disrespect the Wu-Tang Clan.

Our New Practice Area: “Wu-Tang Clan”

As we’ve shown with our recent blogs on ICOs, blockchain & cryptocurrencies, we strive to keep up with the latest developments on the securities law and capital markets front. Along those lines, there’s an emerging player on the scene that we think merits its own practice area.

If you’ve been playing along with the home version of our game today, then by now you know that I’m talking about the Wu-Tang Clan.

Scoff if you want, but shortly after the Clan’s pivotal role in Martin Shkreli’s fraud trial, a “Wu-Tang Coin” ICO was launched with the stated purpose of purchasing the band’s “Once Upon a Time in Shaolin” album from Shkreli & releasing it to the public.

As if that weren’t enough, now “Rolling Stone” reports that band member Ghostface Killah has himself jumped in to the world of crypto-finance:

Ghostface Killah has cofounded a cryptocurrency company called Cream Capital, CNBC reports. The company is looking to raise $30 million during its initial coin offering (ICO).

Cream Capital takes its name from Wu-Tang Clan’s 1993 classic song “C.R.E.A.M.,” which stands for “Cash rules everything around me.” In the case of the company, Cream Capital Chief Executive Brett Westbrook told CNBC it has been granted the trademark for Crypto Rules Everything Around Me.

The ICO “Cream Dividend” tokens will be sold in November, which can then be exchanged for Ether. Ether is the value token of the Ethereum blockchain.

And so, we proudly introduce the “Wu-Tang Clan” Practice Area. Check it out!

When it comes to acknowledging the Wu-Tang Clan’s prominence in finance & the capital markets, we concede that we’re a distant second to Dave Chappelle, whose classic “Wu-Tang Financial” sketch saw it all coming several years ago. No, I’m not going to link to it – the language is NSFW – but do yourself a favor and check it out on your own time.

John Jenkins