In Shift Toward Performance-Based Compensation, Salaries Out, Bonuses In
- Posted by Geoffrey G. Gussis on July 18th, 2007
- Filed in Law Department Management
With bonuses like these, who needs salary? The trend towards performance-based compensation continues:
For the first time in the 14 years weve reported compensation for the top legal officers of the nations Fortune 500 companies, the average bonus topped $1 million. In another first, average stock awards topped $1 million as well. The dual rise of these two forms of compensation can be tied directly to the increasing number of companies opting for pay-for-performance arrangements for GCs and other top executives.At the same time, compensation not tied directly to corporate performance — such as salaries and stock options — has stayed flat or become less popular. Experts say that these changes will stick around for the long haul. The implications for top legal officers? Theres a lot of controversy over how effective pay-for-performance arrangements are in general. And no one has addressed whether they even make sense for general counsel, whose law departments usually arent considered profit centers. As a result, GCs can expect to see their fortunes ebb and flow with the financial health of the company they counsel.
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