At our recent Seattle event with in-house counsel — by the way, thanks to all the attendees and to Recommind, our sponsor — I asked the panelists about what they most enjoy about in-house practice. Christi Muoneke of DocuSign and Brad Toney of Classmates Media both discussed the satisfaction they get from working for a single client on interesting issues that call for both legal and business judgment.
Of course, there are many other good things about working as an in-house lawyer (which is why in-house posts are so coveted). Liberation from the billable hour is one big advantage. Healthy pay packages are another.
At junior levels, Biglaw associates who go in-house might take a pay cut (although not necessarily). But many of the top dogs of the in-house world earn amounts that far outstrip average partner pay.
Let’s take a closer look at Corporate Counsel’s recently released rankings of the nation’s best-paid general counsel. Some GCs enjoy pay packages that make Biglaw partners look like paupers….
General Electric Company didn’t mince words in its most recent proxy statement. Summing up general counsel Brackett Denniston III’s performance, it says: “Mr. Denniston had a strong year in 2012.”
It must have been a very strong year indeed. In fact, Denniston, GC of the Fairfield, Connecticut–based company since 2004, took home $10.9 million in total cash compensation in 2012. After a three-year absence from Corporate Counsel’s GC Compensation Survey, Denniston returned in style — finishing ahead of the year’s other 99 highest-paid legal chiefs.
He’s not alone. There can be just one winner, but there was plenty of good news to go around. After across-the-board declines the previous year, compensation bounced back up in 2012 in every category of GC pay that we measure. Average total cash received rose 6.7 percent to $1,853,671, which is the highest figure we’ve seen to date. (Note: highest since 2000, anyway.)
Good news indeed. Compare that 6.7 percent increase to the dips we saw last year. This year, general counsel compensation improved on multiple fronts:
- Average base salary: $656,607, up 7.4 percent.
- Average bonus: $1,117,400, up 50 percent.
- Average bonus plus nonequity incentive compensation: $1,197,065, up 6.4 percent.
- Average stock option award: $888,313, up 21 percent.
- Average stock award: $2,350,219, up 64.8 percent.
What drove the huge increase in average stock award? According to Corporate Counsel, “Apple Inc.’s Bruce Sewell can take most of the credit for the drastic swing. He received a $66,571,750 stock grant in 2012.” (Given its high-priced talent, Apple shouldn’t stress over that “Apple should protect me from my porn addiction” lawsuit.)
Bruce Sewell’s situation highlights one quirky aspect of the Corporate Counsel rankings. The top 100 list is ordered by 2012 cash compensation (salary plus bonus). But for some GCs, like Sewell, take-home pay is dwarfed by stock grants and stock options exercised.
Another important caveat, which we’ve noted in years past, relates to methodology. As Corporate Counsel explains, it gathers information on GC compensation from the annual proxy statements of public companies, which list the five highest-paid executives. This approach will cause some highly paid in-house lawyers to get overlooked:
Some well-paid top lawyers did not make our list simply because there were other executives who made more; if the GC wasn’t among the top five, we don’t have his or her compensation data. We miss other chief legal officers because of timing. If their company filed its proxy statement after June 1, we couldn’t report it because of our publishing deadline. Plus, businesses that are in bankruptcy or have merged might not file proxies. And Fortune 500 corporations that are not publicly traded don’t file proxy statements with the SEC.
That’s who didn’t make the list; which general counsel did show up? Flip to the next page for observations on selected GCs, plus Corporate Counsel’s top ten highest-paid general counsel….