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Information for our annual GC Salary Survey is gleaned from corporate proxy statements, which, by law, disclose the compensation of corporations’ five highest-paid executives. New York’s Joint Information Inc. combed the proxy statements of the largest publicly held companies (the Fortune 1,000) for information on chief legal officers. Corporate Counsel reporters checked and augmented this research. Corporate Counsel ranks general counsel by their total annual cash compensation (salary plus bonus). But equity-based compensation (restricted stock, stock options, or other long-term awards) represents a big slice of the compensation pie. So we also list the value of restricted stock grants and stock options awarded in 1999; the gains on options exercised in 1999; and the value of options that could have been exercised in 1999 but were not. To show how much GCs pocketed in 1999, we tally the gains on options exercised and the total cash compensation. Determining the value of stock options can be tricky. The Securities and Exchange Commission permits two methods for reporting their value. One, the Black-Scholes model, is a complex formula involving the stock’s historic volatility, as well as other factors that are not uniform and involve assumption-making. For all the numbers we present, we’ve used the second permissible method: We presuppose an annualized 5 percent increase in the stock’s value throughout the option’s term (as noted on the proxy statements). Options typically take 10 years to vest. The resulting numbers are, of course, estimates. An option’s actual value — the difference between the strike price and the stock’s market value when exercised — depends on the market value at the time it’s exercised. Please note: This is not a survey of the 320 best-paid GCs in the United States. We survey only publicly held companies and have compensation figures only for those general counsel who are among their companies’ five highest-paid executives. Other GCs may well have been paid more, but if they were not among the five highest-paid within their companies, their pay packages are not disclosed in proxy statements. Despite these limitations, Corporate Counsel‘s GC Salary Survey traditionally is one of, if not the most, comprehensive and detailed looks at individual general counsel’s compensation. This year we have made it even more so by going beyond our usual top 100 to reveal — for the first time — the pay of all SEC-disclosed GCs in the largest 1,000 companies in the United States.

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