A survey of the highest paid Fortune 500 general counsel shows remuneration has declined across the board, and sector experts warn the figures represent the start of a new trend.

Year of decline

According to Corporate Counsel magazine’s 2012 ‘GC Compensation Survey’, it has been a ‘year of declines’ for ‘every component of GC pay’. However, the results should be put into context, and the researchers point out that this year’s statistics follow double-digit gains in most categories for the previous period.
Aaron Boyd, head of research at San Francisco-based executive pay analysts Equilar in San Francisco said: ‘After three very volatile years, what we're seeing is a return to normalcy.’
A number of other factors are linked with the slide, including the economy, poor share performance and extra shareholder scrutiny.

Target setting

Bonuses are what have made the difference to GC compensation this year, with an example being Charles Kalil – the GC of The Dow Chemical Company who occupied the number 12 spot in last years’ survey. Last year, Mr Kalil took home a $1.8 million bonus, having been paid about $2.7m in salary. However, this year he has dropped to 39th in the list after taking a $1.56 million hit in overall earnings – the result of a $1m drop in his bonus.
While the survey showed that average base pay dropped only 1.8 per cent to $611,411, many GCs have found they are now included in executive target setting. In Mr Kalil’s case, because Dow didn’t meet projected goals his base performance award was just half of what it could have been.