2008 GC Compensation Survey: Let the Good Times Roll! - July 23, 2008

2008 GC Compensation Survey: Let the Good Times Roll!

The Corporate Counsel's 2008 GC Compensation Survey
shows that the top legal officers at Fortune 500 companies raked it in,
mainly dues to lucrative cash bonuses that swell year after year.

Bonuses Boost GC Compensation Levels. While
the average salary stayed essentially stagnant at $567,195, the average
bonus/nonequity incentive compensation jumped 17 percent, to $1.1
million. That's double their average salary.

In 2002, the
average bonus was $550,397 and exceeded the average salary of $503,545
by 9 percent. Five years later, the average bonus surpassed salary by
an eye-catching 100 percent.

As for equity -- in the popular
form of outright stock grants -- the trend also is up, by nearly 17
percent. Only two lawyers on the list did not receive either a stock
award or option: Peter Janzen of Land O'Lakes Inc. and Gregory Doody of
Calpine Corp.

Salaries Remains Low, But Steady.
Lost amid all this talk of bonuses and stock is the lowly cash salary.
In fact, salaries continue to make up the least significant portion of
GC salaries. They held steady in this year's survey. Why? Corporations
can't take tax deductions for any portion of a salary that exceeds $1
million. And if the company has a difficult year, they typically don't
trim the salaries of top earners, preferring to trim the extras like
bonuses and stock grants.

Stock Awards: Where the Money Is.
Average stock awards increased nearly 17 percent this year, to $1.3
million, up from $1.1 million in 2006. Overall, 94 GCs received stock
awards that totaled more than $124 million, a 23 percent increase over
2006. James Ellis of AT&T, who retired in 2007, got the largest
stock award of $12,389,605. That award alone was 83 percent larger than
the highest stock award last year.

Stock Options: Not As Fashionable.
Meanwhile, the less fashionable stock option, the darling of the tech
bubble years, fell 10 percent, to a relatively paltry average of
$720,470. Volatility in the stock market didn't stop 56 attorneys from
cashing out their stocks and realizing a gain of an average $2.4
million, though.

Make no mistake, though: While option grants
are falling out of favor, option cash-outs, along with stock awards,
are still making GCs very rich. Despite the ups and downs of the stock
market last year, 56 general counsel made more than $139 million when
they cashed in stock options last year. The year before, 56 GCs cashed
in their options for a total of $155 million. The biggest winner was
Donald de Brier of Occidental Petroleum Co., who made $21.6 million
when he cashed out options. The year before, de Brier made nearly $10
million cashing in.

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