NEW YORK–LAWFUEL – The Law Newswire
ALM’s Corporate Counsel magazine reported today that compensation for the top in-house lawyers at the nation’s largest corporations again set new records last year, thanks mainly to the rise of pay-for-performance incentives. The magazine’s thirteenth annual survey of the 100 best-paid chief legal officers in the U.S., published today, reveals that, while salaries stayed roughly flat for the second consecutive year at an average of $561,000, the average combined cash bonus and restricted stock grant received by the group topped $2 million. Complete survey results are available in the August issue of Corporate Counsel and on the Web at www.corpcounsel.com.
Seventy-six of the GCs in the top 100 received incentive compensation, as defined by revised SEC reporting rules, while just 41 got discretionary bonuses. The average 2006 bonus of $1 million was up an impressive 66 percent from just three years ago. In addition, 86 chief legal officers received stock grants in 2006, up from 61 in 2005.
Jon Walton, general counsel of specialty metals manufacturer Allegheny Technologies Incorporated, saw his total pay package increase more than 400 percent, to $5.2 million, earning him the number one position on the ranking. Walton’s bonus and non-equity compensation of just over $4.8 million (more than twelve times his annual salary of $400,000) ranked as the biggest total bonus package in the survey.
However, thanks to a rising stock market and sale of existing holdings, many GCs took home considerably more cash last year. While the average GC in the group took home $3.1 million in cash, general counsel Charles Wall of Altria Group, Inc. cashed in stock options and took home more than $20 million in cash in 2006.
AT&T Inc. general counsel James Ellis topped the list for stock awards, receiving $6.8 million worth of AT&T shares, last year. Stock option grants, despite backdating scandals and shareholder pressure, remained a popular form of compensation for GCs and other top executives. Last year, 87 GCs were awarded options, up from 73 the year before. But this year, the average stock option award declined to $778,000, a 33 percent drop from last year’s average of $1.2 million. The biggest award, $4.6 million to John Finneran at Capital One Financial Corporation, was 36 percent smaller than the top option grant of 2005.
“General counsel, just like CEOs, are finding that, more and more, their compensation is intertwined with their company’s performance. If the economy weakens dramatically, however, and corporate profits slide, GCs may experience the downside of pay-for-performance, too,” said Robin Sparkman, editor in chief of the magazine.
Corporate Counsel has ranked the nation’s 100 best-paid GCs since 1994. GCs are ranked based on publicly available cash compensation data drawn from examination of proxy statements for all Fortune 500 companies. Public companies must disclose pay packages for their CEOs and their four other highest-paid executives; in 2006, there were 193 GCs listed among their company’s top five earners. Survey data includes cash and bonus packages, as well as the value realized on stock cash-outs. The list also provides GC equity, including restricted stock grants, option grants, and exercisable options.
The award-winning Corporate Counsel, the nation’s leading magazine for general counsel and in-house attorneys at corporations across the country, is published monthly by ALM and is available on the Web at www.corpcounsel.com.
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