The compensation disparity between General Counsels (GCs) and CEOs seems to be diminishing. A recent report by research firm Equilar reveals that GC compensation is increasing at a quicker pace than CEO compensation, thereby decreasing the existing pay gap. In 2022, CEO compensation was found to be 4.1 times that of General Counsels, a decrease from 4.3 times in 2018. The study sampled from the 500 largest public firms that listed GC pay in their publicly available proxy statements, with results from 179 firms in 2022. The report attributes this financial trend partially to a rising demand for legal chiefs to possess a wide array of skills that are rare to find in one individual.
The broader scope and versatility of the role is in line with the changing demands of today’s corporations. A deeper insight into corporate strategy, intricacies of risk management, regulatory compliance, and providing competent counsel on M&A deals are among many skills now expected of GCs. As companies struggle to find these capabilities in one person, their willingness to offer higher compensation to those suited to the role has grown, which has in turn led to the narrowing wage gap between CEOs and GCs.
This transformation from a specialized role to a multi-disciplinary one is reflective of an emerging trend within corporate leadership, where legal chiefs are evolving to become jacks-of-all-trades. The evolving role of GCs and their growing influence in strategic decision-making illuminates the implicit strategic importance of in-house legal departments within today’s corporations.