Law Department Management Blog
In Corp. Counsel, Vol. 15 Aug. 2008 at 76, Amy Miller reports on the Fortune 500 general counsel who were among their company’s five highest-paid officers in 2007. I assembled the averages of their cash and equity compensation in a previous post (See my post of Aug. 12, 2008: handsome rewards for GCs at huge US companies.). Some other observations come from that same article.
Fewer stock options are being handed out because rules issued by the Financial Accounting Standards Board in 2006 require companies to list the value as expenses, thus making them much less appealing than before (See my post of Nov. 25, 2006: deduction of options and 11 references.).
Of the 100 general counsel highlighted in the report, for 2007 94 percent of them received stock awards, 87 percent of them received stock option grants.
As for cashing out stock options and stock awards, 56 of the general counsel did so and realized an average gain of $2.4 million. The same number of general counsel did so the previous year.
One reason salaries barely increase is that corporations can’t deduct from their taxable income any portion of a salary that exceeds $1 million (See my post of Sept. 5, 2007: no deduction over $1 million in salary.).
If we take the average compensation value for these general counsel — $3.6 million – and divide that amount by 2,000 chargeable hours assumed to have been worked in 2007, their companies compensated them at an average rate per hour of $1,800. Thirty dollars a minute (See my post of Jan. 30, 2008: per hour cost of senior lawyers.)!