A survey of in-house legal officers for multi-billion dollar US companies has revealed a 20 per cent increase in average pay for 1996, a rate which outstrips increases for any other group of executives in this sector and pushes their earnings through the one million dollar mark.
The report, published by consultants Pearl Meyer & Partners, revealed that top legal officers earned $1.18m on average in 1996 compared to $987,700 in 1995.
The survey looked at the average pay for various executives including chief executive officers, chief financial officers and human resources executives at a selected group of service and industrial companies with average revenues of £15.5bn.
The survey found that "as a group, top legal officers are among the most highly paid corporate executives".
Claude Johnston, managing director of Pearls, said: "We're not surprised by the pay increase for top legal officers. Major corporations are increasingly in competition with top law firms for legal talent."
A breakdown of the top legal officer's pay shows that up to 69 per cent is variable and made up of elements such as bonuses and stock options.
Salary, the only fixed portion of pay, increased by only 7 per cent to $363,600.
As an overall share of pay, the salary element is falling: in 1996 it made up 31 per cent of total pay; in 1995 it was 34 per cent; and 30 years ago it was 100 per cent.
"There's no doubt that chief legal officers, like CEOs, are being paid for performance," said Johnston. "A full 69 per cent of a top legal officer's pay is at risk - it is not an environment for the faint of heart."