For general counsel seeking a hefty paycheck, it looks as though there’s no better place to be than New York. A larger proportion of the top 100 best paid GCs in the U.S. work in New York than in any other state.
Eighteen of the top 100 best paid GCs are based in the Empire State. Texas and California tied for second place, each with 10 GCs among the top 100 in the 2017 General Counsel Compensation Survey conducted by Corporate Counsel, a New York Law Journal affiliate.
See the chart: New York and National GC Compensation
Laureen Seeger, the top lawyer at American Express Co., is the highest paid general counsel in New York, according to ALM Intelligence, which compiled the rankings based on fiscal year 2016 proxy filings. Seeger brought home nearly $6.2 million in total cash last year.
She was also the third highest paid on the overall list of top paid legal chiefs across the country, behind Altria Group’s Denise Keane, who made $9 million last year, and Alan Braverman of The Walt Disney Co. (Keane retired in June).
Paul Cappuccio, GC at Time Warner Co., was the second highest paid in New York (No. 4 on the overall list) with his a paycheck of around $6 million, and Lawrence Tu at CBS Corp. was the third highest paid in New York (No. 5 on overall list), bringing home $5 million in total cash last year.
Most of the highest paid GCs in New York work in the entertainment industry, which makes sense given the focus on media and show business in New York City. Five of the 18 GCs from New York are in entertainment. In addition to Time Warner and CBS’ lawyers, Viacom Inc., Warner Music Group and AMC Networks had lawyers who made the list.
Gerson Zweifach, top lawyer at Twentieth Century Fox, dropped from the list after topping the New York rankings with $6.3 million in total cash last year. He doesn’t appear in on this year’s list since he is no longer among the top five paid executive officers at Fox. This means his data is not included in the company’s most recent proxy statement, though there is no indication his pay has decreased.
Compensation is driven by “so many variables,” said Lee Udelsman, managing partner of the in-house practice group with Major, Lindsey & Africa. Those factors include “the nature of the company, the band in which it’s in: Fortune 100, 200, 300, 400 or 500 and what other members of the leadership team are making.”
Udelsman said that “geographic location, of course, is one as well,” noting that an employee “in Toledo doesn’t make as much as someone in New York.”
Across the country, by most metrics, general counsel in the report seem to have done well in 2016. Keane serves as a prime example. When she appeared as the list’s highest-paid GC in 2011, she had received $6.5 million in cash pay. In 2016, she made about $2.5 million more, a significant boost.
This represents a broader trend, says Udelsman. “The GC role is being embraced as part of the leadership team and their sphere of influence has really expanded,” he says. “Compensation reflects that and has continued to rise over the past five, six, seven years.”
Corporate Counsel’s data demonstrates this pattern. Average total cash compensation for GCs grew 3 percent in 2016 to north of $2.1 million, compared with an average of nearly $2.06 million the year prior. Compensation grew 21.9 percent from 2011, when the average total cash payout for lawyers on the list was about $1.74 million.
Median cash compensation for 2016 rose by 4.2 percent over 2015. The 2016 median total cash for GCs was about $1.68 million, an increase from $1.61 million the year prior and $1.32 million in 2011.
Average base pay for GCs sat at around $611,000 five years ago and jumped to roughly $699,500 in 2016, although base salaries were down about 1.1 percent in 2016 year over year.
Bonuses alone were down 13.6 percent from the previous year but bonuses combined with other nonequity compensation made up for the slight dip in salaries, rising 5.2 percent to more than $1.4 million on average, compared with about $1.02 million in 2015.
Generally speaking, the numbers are nothing to scoff at, says Michael Roche-Kelly, director with Special Counsel’s Parker + Lynch. He says he wants to share the report “with a midlevel associate in a law firm who is scared about stepping back in salary to make a move in-house because they think they’re going to get stuck making $150,000 a year for the rest of their lives. … In reality, you can do very, very well making a lot of money in-house.”
Corporate Counsel’s rankings focus on nonequity compensation, but as Roche-Kelly points out, there is a lot of money to be made in equity grants and long-term incentives such as stock options.
There are many factors that play into a GC compensation package, but Roche-Kelly says he often tells would-be in-house counsel: “You live on your base, you bank your bonus and long-term incentives pay for the kids’ college.” Granted, he says, most of the heavy hitters in the Top 100 are a few steps beyond having to worry about paying their bills.
Apple Inc. general counsel Bruce Sewell, for instance, cashed in on $75.7 million last year in stock options alone. Sometimes the only thing to really say about numbers that high is, “That’s crazy,” as Roche-Kelly puts it. Remarkably, he says, GC compensation across the board still has room for growth.
As for the industries that had high-earning performers, GCs in the tobacco industry, besides just Altria’s Keane, made out well for themselves. Marc Firestone of Philip Morris International brought in nearly $2.6 million last year while Martin Holton at Reynolds American took home almost $1.9 million.
Roche-Kelly points out that GCs in the tobacco industry can earn a sizable salary but there is a stigma attached to that field. The industry itself is a controversial one and the skill sets of lawyers there are narrowly focused, he says.
“Once you go over to tobacco, it’s very hard to go back and find jobs in other industries,” he says. “It’s a consumer product industry and there is some movement, but tobacco litigation is quite unique. It’s very product liability-oriented and there aren’t many other industries that have that type of litigation—maybe the asbestos industry—but it’s been difficult for them to move on.”
Then there were some GCs who dropped from last year’s Top 10 list. Twentieth Century Fox’s Zweifach, in addition to being the top paid GC in New York in last year’s report was also the second-highest-paid general counsel overall before his disappearance from the charts.
Thomas Mason, general counsel at Energy Transfer Equity, who appeared in last year’s rankings as the second-highest-paid general counsel for 2015, dropped to No. 92 this year, as his total cash compensation decreased to less than $1.3 million in 2016 from nearly $6.9 million in 2015. Mason’s bonus and nonequity earnings totaled $6.3 million in 2015, but equaled only about $706,000 this year.
In years to come, the degree that industries increase pay for their top lawyers will likely be determined by the level of regulation directly affecting their businesses, says Todd Sirras, managing director with executive compensation consulting firm Semler Brossy. For instance, Sirras points out that general counsel such as CVS Health Corp.’s Thomas Moriarty, No. 15 on the overall list, have recently stepped up to make their companies’ concerns known to lawmakers and regulators.
“In the political landscape we have today, there’s more uncertainty and more potential ways that the regulation could go,” Sirras says. He notes that health care lawyers and those within the financial services industry will likely find themselves with added obligations to participate in public policy debates and could therefore receive higher compensation.
If they’re not already, Sirras says, companies, particularly those challenged by the new administration, will be “paying GCs more to retain and motivate them or when those companies go to the outside to hire, they’ll be bringing in the heavy hitters.”