Businesses with revenue over $15 billion paid their GCs more than three times as much as those with revenues below $1 billion
ROCHESTER, NY (November 30, 2016) — Compensation for general counsel positions increased 6.9 percent this year, topping $1 million, according to the Equilar & BarkerGilmore General Counsel Pay Trends 2016 report, which evaluated more than 1,400 GCs for companies ranging from less than $1 million to nearly $500 billion in annual revenue. The full report can be accessed here: http://www.barkergilmore.com/general-counsel-pay-trends-2016
This increase reflects the growing importance of general counsel (GC) within the senior management team, says executive search firm, BarkerGilmore, which provided expert analysis and commentary on the report.
“Over the past 15 years, the number of companies that consider their GC a member of the executive management team has grown from 55 percent to 93 percent today,” says Bob Barker, Managing Partner for BarkerGilmore. “Today's GC typically serves as primary legal counselor to the CEO and board, while back in the 1990s, outside counsel assumed this critical responsibility. GCs are increasingly considered on par with the CFO, charged with navigating highly complex and evolving laws, regulations and public policies.”
GC compensation at S&P 500 on the rise
Pay increased 2.4 percent for GCs in the S&P 500 from 2014 to 2015, reaching $2.1 million, according to the report, which examined GC compensation at a total of 269 S&P 500 companies in 2015.
The report showed significant variability across industry sectors, ranging from $1.6 million for utilities to $3.0 million in healthcare. Median total direct compensation (TDC) in healthcare rose 32.4 percent year over year, representing the greatest sector increase, while TDC in technology tumbled from $2.5 million in 2014 to $2.2 million in 2015, representing the largest decline across sectors.
In terms of performance incentives, the financial sector was the most generous, awarding 36.4 percent of total compensation, followed by utility companies at 35.7 percent and technology companies at 35.6 percent.
"GC candidates must possess a clear understanding of how complex regulations impact long-term business strategy and day-to-day operations, especially in highly regulated industries like financial services, insurance and healthcare," says Barker. This narrows the field of available candidates, driving up demand and compensation. It's important to recognize that today's GC serves as a guardian of the company and its brand reputation, which demands paramount judgment and integrity."
When it comes to compensation, size matters
Companies that generate higher revenues pay their GC more. In fact, businesses with revenue exceeding $15 billion paid their GCs more than three times as much as those with revenues below $1 billion. In addition:
GCs at companies with over $15 billion in revenue earned a median $2.5 million in 2015, up from $2.4 million in 2014 -- 48.2% higher than those at companies with revenue between $5 billion and $15 billion.
Companies with revenue over $15 billion offered 628.1% more equity and long-term incentives at the median than companies with revenues below $1 billion.
Long-term performance incentives accounted for the largest component of pay for GCs at companies with revenues over $15 billion at a median of $682,290.
"In general, the bigger the company, the more complex the issues the GC must tackle – especially in highly regulated industries, like financial services," says Barker. "Today, the GC's worth extends far beyond financial metrics to the intellectual contributions they make to the executive team and board. And their growing compensation reflects the heightened value they bring to the business."
Webinar on general counsel pay trends
BarkerGilmore, Equilar and Willis Towers Watson will host a free webinar on Thursday, Dec. 8, at 1 pm (EST), which will explore how the GC role has shifted over the past decade and how that impacts recruitment and pay for top legal talent, based on findings from the recent report. Register at this link: http://marketing.equilar.com/36-2016-the-rise-of-the-gc-webinar-registration
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BarkerGilmore is a boutique executive search firm dedicated exclusively to the placement of General Counsel, Chief Compliance Officers and their strategic hires. Its niche concentration affords access to a specialized network of talent, allowing them to identify the best legal professionals for any assignment. BarkerGilmore prides itself on being attentive to each client’s business culture. By understanding their brand, strategy and leadership needs, they provide the highest standard of service based on long-lasting client relationships. Their industry-leading, audited metrics over the past three years include: a 96% retention rate of placements made, 44% of which are women, 24% ethnically diverse, a 96-day average timeframe to execute a search, and guaranteed results. For more information visit www.barkergilmore.com
Equilar is the leading provider of board intelligence solutions. Companies of all sizes rely on Equilar for their most important boardroom decisions, including 70% of the Fortune 500 and institutional investors representing over $13 trillion in assets. Equilar offers data-driven solutions for board recruiting, executive compensation and shareholder engagement that bring together business leaders, institutional investors and advisors to drive exceptional results while ensuring sound corporate governance. The Equilar suite of solutions includes industry-leading board education symposiums, comprehensive custom research services and award-winning thought leadership. Founded in 2000, Equilar is cited regularly by Associated Press, Bloomberg, CNBC, The New York Times, The Wall Street Journal and other leading media outlets. Learn more at www.equilar.com
For more information, contact:
Denise Whitney, Senior Director