The cost per hour of highly-paid general counsel and methods to value stock options

The most recent data on highly-compensated general counsel, from the blog of American Lawyer Media, covers 100 general counsel. Assume each of them logs a generous 2,000 hours of chargeable work per year (See my post of Sept. 25, 2005 on 1,850 as a normal assumption for in-house chargeable hours.). Based on total cash compensation in 2006, not any other overhead benefits or perquisites, the median general counsel cost $591 an hour. The most costly general counsel topped out at $2,617 dollars per hour while the bargain-basement GC ran at a mere $410 an hour

Of the hundred lawyers, 13 of them received option awards worth nothing; at the wealthy extreme 18 received option awards worth more than $1 million, the largest being $4.58 million dollars (See my post of Nov. 25, 2006 on stock options and 11 references cited.).

Three companies were noted as having used the Black-Scholes method to value its option awards (See my posts of Aug. 3, 2005 and Jan. 17, 2006 on Black-Scholes.), while one calculated the value of option awards by using what was called the binomial method. The summary does not identify the method the remaining companies used to value their option awards.

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