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They may not have groupies, but Benjamin Heineman Jr., Joseph Flom, and Harvey Pitt are the heartthrobs of the legal world. If one of them were to leave his prestigious perch (Heineman is General Electric Company’s GC; Flom is a famed partner at Skadden, Arps, Slate, Meagher & Flom; and Pitt is the chairman of the Securities and Exchange Commission), a bevy of CEOs would try to lure the free agent in-house. So obsessed is American business with brand names, says Paula Todd, a principal at consulting firm Towers Perrin in New York, that corporations are beginning to resemble movie studios. Companies want to hire “a proven box-office winner,” explains Todd, because executives “are risk-averse and willing to invest big bucks for proven return.” For the Mel Gibsons and Nicole Kidmans of the law, that means the ability to name their price. Most aspiring GCs, though, find that companies still dictate the terms when it comes to compensation. The reason: Lawyers are not perceived as adding to the bottom line; they’re usually just another cost on the balance sheet. “The GC is not like the guy who runs merchandising for Sears,” observes recruiter Meyer Haberman of New York’s InterQuest Inc. Besides, there are too few top jobs and too many lawyers trying to fill them. Being the top legal honcho at a major corporation is a coveted job. And why not? According to our survey, the 100 highest-paid GCs received an average compensation (salary and bonus) of more than $1 million last year. A partner at one of the nation’s 100 highest-grossing firms earned on average about $700,000 in 2000. Even the very top GCs earn a few million less than their CEOs do. But three of the top 10 highest-paid lawyers in our survey were the second-highest-paid executives in their companies: Conseco Inc.’s former GC John Sabl ($1,750,000); UST Inc.’s Richard Verheij ($1,390,000); and Sequa Corporation’s Stuart Krinsly ($1,372,810). Usually, though, it’s the chief financial officers that GCs should compare themselves to, says recruiter Robert Major Jr., of San Francisco’s Major, Hagen & Africa. GCs can expect to make about 15-20 percent below what a CFO makes, Major says. Who determines GC pay? In large companies, if the GC is one of the top five executives, the compensation committee or human resources department sets the price; otherwise, the CEO decides. Even where there’s CEO involvement in the process, the head of HR has great input, adds Beth Olesky, legal specialist for New York-based executive search firm Russell Reynolds Associates. But once the recruiting process starts, the compensation is pretty much set — unless the company is staring at major litigation or antitrust problems, or is embarking on acquisitions. Of course there are some who wouldn’t dream of haggling over money. Honeywell International Inc. GC Peter Kreindler says, “I have never negotiated on my compensation … . I always felt I’ve been treated very fairly.” That obviously works for Kreindler, who last year pulled in $755,000 in salary and bonus (not counting $15.2 million he made on exercised options). Others, though, might be tempted to do a little nudging. How much candidates can push depends on the company, their star wattage, and, perhaps most important, what’s being discussed. So, a little advice from the experts on what to ask for: � Forget the hard stuff. Before the stock market tanked, many top executives were besotted with stock options. That affair is over. Now job candidates chant, “Give me cash!” But few are getting as much as they would like. While companies might cough up big signing bonuses to lure law firm partners, it’s generally hard to negotiate for fat base salaries and guaranteed bonuses. Companies would rather give stock, because so many are strapped for cash. � Dip into as many bonus pools as possible. San Francisco recruiter Katharine Patterson reports that high-tech companies, such as Intel Corporation, offer some employees as many as three types of bonuses (based on seniority as well as the company’s and the individual’s performances). In the traditional manufacturing and service fields, says recruiter Haberman, corporations (like New York’s Colgate-Palmolive Company) also use long-term incentive plans (in which bonuses are distributed over a longer period of time — every five years or so) to keep valued executives in place. The best way to get these plums is to enter the company at the highest level possible, advises Haberman. Once you’re in the job, he warns, “it’s hard to argue for a special bonus.” Management consultant Susan Sneider of Somerset, N.J.’s Hildebrandt International agrees: Don’t even think about it, she says, “unless you’ve saved the company.” � Think “alimony.” A good severance package now tops many candidates’ wish lists. Such agreements cover change-of-control scenarios, such as when a company gets sold, or is taken over, or when a new CEO is installed. A great severance package, says Sneider, is one year’s salary, but “not many people can make that kind of deal.” Often GCs can’t get a severance deal at all. In the high-tech sector, says Patterson, there’s usually “no expectation of a parachute … . You do your own due diligence, and you take the risk.” � Hide the hired gun. Some top GCs, like star athletes, turn to lawyer-agents to sweeten their deals. But retaining a compensation expert can backfire, Sneider warns. If you must, retain legal counsel to review your deal, but keep that attorney under wraps. Even New York lawyer Joseph Bachelder, who counsels celebrity executives (his clients include International Business Machines Corporation CEO Louis Gerstner Jr.; Bank One Corporation chairman Jamie Dimond; and former president of AT&T Corp. Alex Mandl), admits that his pricey service ($975 an hour) has limited value for most company lawyers. GCs might want to save the hotshot employment lawyer for the day when they’re moving from one major company to another and leaving significant stock provisions, supplemental pension plans, and bonuses behind. � Snoop around. The ultimate weapon in negotiations is knowledge: Find out how other GCs in comparable positions are paid. The public availability of information on lawyers’ salaries, says Sneider, has helped boost in-house compensation in recent years. And so we offer this year’s Corporate Counsel GC Compensation Survey as ammunition for your next round of negotiations. Catherine Aman contributed to this story.

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