Within the pecking order of a corporation, broadly speaking, where does the general counsel stand?
To shed some light on the matter, Big Law Business decided to drill down and see how GC pay matches up to other executives. Last week, we reported the 30 of the highest paid GCs — whose compensation was disclosed under Securities and Exchange Commission Rules.
See the full list, including salary and overall compensation here .
Under SEC rules, companies must disclose the chief executive officer and principal financial officer’s compensation, and the next three most highly compensated executive officers, according to several experts.
We found the companies where a lawyer ranked among these highly paid executives.
Below, is a list that shows where lawyers on our list ranked relative to others in the executive suite. As is plain below, ten of the GCs were the fourth highest paid at their company, meaning less well-compensated than at least three other executives. Then, in order, eight of the GCs were the third highest paid exec at their company, seven were in the number five spot, two were the second highest paid and so on.
Only one GC from the list ranked as the highest paid executive at his company. That would be Thomas Mason, whose title changed in December 2015 from a vice president to executive vice president and general counsel of Energy Transfer Equity, a Dallas-based natural gas storage and transportation company.
The company’s proxy statement indicates Mason received the bulk of his $9.1 million in compensation in the form of a $6.3 million discretionary cash bonus, as well as a $2.2 million equity award. His salary was $557,000. We’ve reached out to the company and will let you know if we hear back about what elevated his salary this year.
He is a former Vinson & Elkins partner in Houston. His company made headlines at the end of June when a Delaware court ruled it could escape an agreement to acquire a rival pipeline company Williams Companies in a deal that would have cost up to $6 billion. It had been described as a merger agreement that could not be broken, and yet was called off as a result of an obscure nuance of tax law, as explained by UC Berkeley School of Law professor Steven David Solomon here .
Mason’s compensation, including his bonus — reportedly paid in March 2016 — put him above the company’s president, chief operating officer and chief financial officer.
The latter category, chief financial officer, is one that has been closely watched as a point of comparison for judging how chief legal officers’ role is expanding within the corporation.
Ben Heineman, a former general counsel of General Electric, has argued that globalization and technology have increased the complexity of the business environment, which has raised the chief legal officer to equal footing with the chief operating officer.
The chart below shows how GCs on our list, shown in blue, ranked relative to the chief financial officer at their company, shown in red.
Eight CFOs were the second-highest compensated compared to three GCs; and eight CFOs were third-highest compensated compared to eight GCs, and so on.
In, general, CFOs were still better compensated than GCs, indicated by the fact that 16 CFOs were in the top three highest compared to 12 GCs
Of the GCs who were the second highest paid executives at their company, Amgen’s Jonathan Graham, Paypal’s Louise Pentland, Xerox’s former general counsel Don Liu [for a story on his hire by Target, click here ], all were paid better than the CFOs at their companies.
The number one highest paid GC on the list, Bruce Sewell, received compensation estimated in the company’s proxy to be worth more than $25 million, the bulk of which occurred through a $20 million stock award.
Sewell was tied for fourth in terms of compensation among executives, which put him in front of CEO Tim Cook, whose reported compensation was $10.2 million — one sign that pay doesn’t necessarily indicate who has power in the company.