General counsel comp continues to rise, study finds
General counsel at large US public companies continue to make steady gains in compensation, according to new research, as the job evolves into a more strategic and business-focused role.
A report by Equilar and search firm BarkerGilmore states that over the past five years there has been a 7.4 percent increase in general counsel median total compensation. That figure stood at $2.6 million in 2018, a 3.7 percent increase from the previous year. The study covers the 500 largest – by reported revenue – US-headquartered companies that trade on either Nasdaq, the NYSE or NYSE American.
Across industries, the median total compensation for general counsel at healthcare companies is the highest, at $4 million in 2018. Technology ranks second, at $3.2 million, and financial services ranks third, at $3.1 million. The lowest-ranked industries are consumer goods ($2.15 million), utilities ($2.18 million) and services ($2.38 million).
Performance incentives have become the largest component of general counsel compensation packages. Their median value in 2018 was $718,000 compared with $565,000 in salary, $461,000 in annual cash bonus targets and $301,000 in stock awards. In 2014 salary was the most valuable component.
According to BarkerGilmore managing partner John Gilmore, long-term performance incentives for general counsel tend to be linked to the company’s performance. But short-term performance incentives are more personalized and may include factors such as controlling the legal department’s spending, reaching diversity goals or reducing litigation, he tells Corporate Secretary.
‘I rarely talk to a general counsel who complains about not earning enough money,’ Gilmore says. General counsel typically switch jobs not to gain greater compensation but to gain greater responsibility, to take a job where they can have more of an impact, he adds.
Commenting on the persistent, steady rise in median compensation, Gilmore notes that general counsel in the past did not have quite the ‘seat at the table’ they do now. They have taken on more business and strategic leadership roles, and this in turn has created a strong bond with boards of directors that rely on them.
This helps explain the diminishing gap between general counsel and CEO compensation and is also a reason why general counsel are increasingly going on to become CEOs, or interim CEOs, of their companies, Gilmore comments.