As the role of top legal officers at public companies continues to evolve, their median total direct compensation (TDC) increased 4%, according to the Equilar & BarkerGilmore General Counsel Pay Trends 2017 report, examining more than 1,100 small, mid and large cap-public companies. When analyzed by revenue range to identify variances, General Counsel at companies with between $1 billion and $5 billion in revenue received the largest percentage increase of 8.1% from fiscal years 2015 to 2016, or a median $1.5 million in total compensation. Comparatively, GCs at companies reporting $5 billion to more than $15 billion in revenue experienced a 3.3% rise in total compensation to $2.4 million. GCs at companies on the lowest end of the revenue spectrum, with less than $1 billion in revenue, evidenced a 6.6% increase in median pay to $918,000, while those at top revenue generating companies with over $15 billion saw a pay decrease of 0.6%, or a median of $3.8 million in 2016.
Observing the quickly changing role of today’s GCs, Robert Barker, Managing Partner for BarkerGilmore, a boutique executive search firm exclusively focused on the placement of General Counsel, Chief Compliance Officers and their strategic hires, commented: “Top legal officers continue to be tasked with broader responsibilities beyond the legal, compliance and governance functions, to include government relations, human resources, communications, and even business oversight, and as a result, compensation follows suit.”
Stock grants remain an integral component of the total compensation package for GCs, especially as they ascend to the executive team, as John Gilmore, a Managing Partner at BarkerGilmore notes: “The reflection of the newly found power of the GC is apparent in the transition of their title to Chief Legal Officer, indicating they have taken a seat at the boardroom table to join other C-suite executives who are compensated with significant equity grants.” Large-cap companies, as part of TDC, awarded GCs seven times the stock value compared to companies with less than $1 billion in revenue. In 2016, salary was the largest part of the compensation package for GCs at companies generating the lowest revenue, with stock grants the largest median pay component for those at companies from $1 billion to over $15 billion in revenue.
When TDC compensation is viewed from an industry specific perspective in this recently released report, the median for GCs at Equilar 500 utility, and consumer goods and services companies experienced the largest increase of over 12% between 2015 as 2016. Conversely, GCs at financial, healthcare, industrial goods and technology companies in the Equilar 500 experienced compensation declines ranging from -7.2% to -18.7%, while the median for all Equilar 500 industry sectors changed less than 0.5% from the 2015 median.
Click to view the 2017 Equilar & BarkerGilmore General Counsel Pay Trends Report.