By Blake Edwards and Gabe Friedman with special assistance from Brandon Kochkodin
In recent years, there’s been a lot of discussion about the increasing influence of general counsels: once looked at merely as sources of legal counsel, GCs have become strategic partners who help shape and drive the visions and futures of top companies.
And yet there’s been a scarcity of data on how GCs are compensated, despite endless coverage on law firm compensation, with stories on associate pay raises and the latest profits per partner stats.
Big Law Business set out to add to this discussion, by producing its first Report on General Counsel Compensation — a list of 30 of the highest paid GCs in the country. The report is below.
Most companies do not disclose the GC’s compensation in their proxy report to shareholders. In fact, the Securities and Exchange Commission only requires that companies disclose the compensation received by the chief executive officer and principal financial officer, and the next three most highly compensated executive officers, according to compensation experts we spoke to for this story.
Still, using the Bloomberg terminal, we picked through the SEC filings of the largest U.S. public companies as ranked by revenue, and found the ones that identified a legal officer among their highest paid executives.
The 30 GCs listed below represent the top legal officers whose compensation was disclosed. They earned between $25 million and $4.7 million in total compensation in 2015, which immediately puts them on par with the highest paid Big Law partners.
One glaring fact: some salaries are barely higher than a first-year associate with a prestigious clerkship under his or her belt.
Take KKR’s secretary and general counsel David Sorkin, who earned a reported $300,000 salary, and $7.76 million in total compensation. His situation highlights the fact that GCs’ compensation is often a rich mix of stock, options, pension benefits and perks, with cash representing only a small component. This contrasts with law firm partners’ cash-heavy compensation.
Nor can GCs necessarily expect their compensation to remain consistent from year to year. At Hertz, a spokesperson wrote to tell us that the $11.6 million received by Thomas Sabatino, the company’s recently departed GC, reflected aspects of his employment agreement specifically related to his departure. Sabatino is now GC at Aetna.
Similarly,at Raytheon, newly minted GC Frank Jimenez received $627,000 salary and total compensation of $5.4 million. But a spokesman pointed out this included nearly $100,000 for relocation expenses, and a $450,000 cash bonus and $1.5 million in restricted stock options in consideration of compensation he gave up at his past company in order to join Raytheon.
All this is to say that the GC’s compensation is more nuanced than just a cash payment.
Another glaring fact from this list: the top echelon of the GC club is still dominated by white males. Five out of 30 GCs on this list are women, and though we didn’t venture an official guess at ethnic diversity, it doesn’t look good on that front, either.
Below, we’ve broken out salary and total compensation.