Some corporate legal leaders were rewarded handsomely in 2020 amid a volatile year for their companies.
Apple Inc.'s Katherine Adams, Alphabet Inc.'s Kent Walker, and Amazon.com Inc.'s David Zapolsky were among the highest compensated legal chiefs last year, collectively earning a total of almost $100 million, according to corporate filings.
Bloomberg Law tracked the total annual compensation of legal chiefs in the Fortune 1000 based on company proxy statements in which the top lawyer was a named executive officer. At least 10 of those lawyers received compensation packages of over $10 million last year.
In an unusual year for executive pay due to Covid-19, some of these 10 lawyers out-earned famous CEO colleagues, like Apple’s Tim Cook and Amazon’s Jeff Bezos, in terms of annual compensation. There are legal chiefs on the list who managed to hold on to their massive compensation packages, even as their companies conducted layoffs and their CEOs took temporary salary cuts.
Executive compensation packages typically include a base salary, a cash bonus, and equity awards that vest after a few years. For many senior executives, equity and stock can comprise up to 60% of their total compensation.
“It’s important to remember that the number you see in that summary compensation table is not the same thing as what somebody puts in their pocket or into an account,” said Jannice Koors, senior managing director at executive compensation consultancy Pearl Meyer.
Koors emphasized that while cash compensation, like salaries and bonuses, reflects what an executive earned in a given year, the majority of their compensation comprises equity or stock. Equity awards are reported in proxy statements when they are granted but can take anywhere from three to 30 years to vest.
Equity grants can also be tied to multi-year performance metrics, Koors added. If an executive fails to meet those goals down the road, portions of their equity awards may never make it into their personal bank accounts.
Covid-19 proved to be an additional factor in many companies’ executive pay formulas.
“Companies took different actions based on the level that they were immediately impacted by the pandemic,” said Todd Sirras, managing director at executive compensation consultancy Semler Brossy. “Many companies cut executive salaries temporarily, and that’s especially important for companies that had real cash flow problems.”
Here are some of the general counsel and chief legal officers who were among the best compensated:
Kent Walker, Alphabet Inc.
Google parent company Alphabet Inc.’s senior vice president of global affairs and chief legal officer Kent Walker was awarded around $50.9 million in total compensation last year. Walker’s compensation package is primarily made up of over $50 million in stock awards, which will vest in four years, according to the Mountain View, Calif.-based company’s proxy filing. He joined Google in 2006 from eBay Inc.
Katherine Adams, Apple Inc.
Katherine Adams, senior vice president and general counsel of Cupertino, Calif.-based Apple Inc., received nearly $26.2 million in total compensation in 2020. She earned $1 million in base salary last year and was granted more than $21 million in stock awards, giving her a total compensation package greater than that of CEO Cook, whose comp package totaled $14.8 million. Adams joined Apple in 2017 from Honeywell International Inc.
David McAtee, AT&T Inc.
Telecommunications giant AT&T Inc.’s senior executive vice president and general counsel David McAtee was awarded more than $18.6 million in total compensation. Nearly half came in the form of a $9 million “career retention grant” that was granted in 2020 but will vest in 2030. McAtee joined Dallas-based AT&T in 2012 and became its top lawyer in 2015.
Last June, AT&T laid off thousands of employees as part of a $6 billion cost-saving plan that was given a “head start” by Covid-19. Some AT&T executives, including the company’s CEO John Stankey and chairman Randall Stephenson, opted to take salary reductions in the second half of 2020 due to “unprecedented uncertainty and global economic stress,” according to the filing, though no such reduction was disclosed for McAtee.
David Zapolsky, Amazon.com Inc.
David Zapolsky, Amazon.com Inc.’s general counsel of nearly a decade, made the Seattle-based company’s proxy statement as one of its top paid executive officers for the first time in 2020. He received a compensation package of close to $17.2 million last year, the vast majority of which was made up of stock awards. Zapolsky’s base salary was $160,000.
Zapolsky’s total compensation was greater than that of Bezos, who was granted just under $1.7 million last year, according to the proxy. Making less than the company lawyer is unlikely to trouble Bezos, who owns about 11% of the online retail giant he founded and is one of the world’s richest people.
Laura Schumacher, AbbVie Inc.
Pharmaceutical company AbbVie Inc., based outside Chicago, granted its vice chairman of external affairs and chief legal officer Laura Schumacher over $17.1 million last year, up from $15.1 million in 2019. Schumacher’s base salary was $1.2 million, and she received around $7 million in stock and option awards. Schumacher became general counsel of AbbVie’s former parent company Abbott Laboratories in 2005 and joined AbbVie following its 2013 spinoff.
Edward Nekritz, Prologis Inc.
San Francisco-based Prologis Inc., which is organized as a real estate investment trust, awarded its chief legal officer and general counsel Edward Nekritz more than $12.3 million in total compensation. Nekritz joined Prologis in 1995 as a vice president, and his compensation package includes $600,000 in base salary, a $750,000 bonus, and more than $8.8 million in stock awards. Prologis counts companies like Amazon, BMW, and PepsiCo Inc. among its clients.
Tony West, Uber Technologies Inc.
Tony West, brother-in-law of Vice President Kamala Harris and chief legal officer of Uber Technologies Inc., was awarded $12.3 million in total compensation in 2020, the first year that his compensation has been disclosed. According to San Francisco-based Uber’s proxy statement, West was granted more than $10.8 million in stock awards and received a base salary of $800,000. West was previously the top lawyer for PepsiCo Inc. before succeeding Salle Yoo at Uber in 2017.
Uber CEO and director Dara Khosrowshahi waived part of his base salary from May to December last year due to the financial strain of Covid-19, which led to a 25% decrease in Uber’s workforce, according to the proxy, though it doesn’t appear West did the same.
David Hyman, Netflix Inc.
Netflix Inc. reported record growth during the pandemic, and it rewarded its chief legal officer of nearly two decades, David Hyman, accordingly. Hyman received approximately $10.5 million in total compensation last year, an increase of more than $2 million compared to 2019. About $5.5 million came in the form of his base salary, and he was granted another $5 million in stock options. Unlike many other companies, Los Gatos, Calif.-based Netflix allows its top executives to choose their mix of cash compensation and equity awards, which are granted monthly and can be exercised within 10 years of the grant date.
Steven Rodgers, Intel Corp.
Steven Rodgers joined Intel Corp. in 2000 and became the Santa Clara, Calif.-based company’s executive vice president and general counsel in 2014. Last year, his total compensation was nearly $10.4 million, including $833,000 in base salary and about $7 million in stock awards.
Louise Pentland, PayPal Holdings
PayPal Holdings’ executive vice president and chief business affairs and legal officer Louise Pentland is the only legal boss on this highly-compensated lawyer list who earned less in 2020 than 2019.
Pentland’s total compensation last year fell to just over $10 million from around $11.2 million the year before due to fewer stock awards. Her role at San Jose, Calif.-based PayPal includes overseeing human resources, public relations, and social innovation, in addition to the company’s legal department.