• Signing bonuses for general counsel roles are increasing as companies prioritize external hires who already have experience in the role.

• Companies are moving away from promoting internally due to perceived limitations in internal talent pools.

• Highest welcome packages for new legal chiefs in 2023 were handed out by Salesforce, Oracle, Lowe’s, CVS Health, and Pinterest.

The demand for top legal talent is driving up signing bonuses for general counsel positions, with companies increasingly looking outside their ranks to fill these positions with people who already have experience in the role rather than promoting internally, according to data from the 2024 General Counsel Compensation Report released last month.

What’s Causing the Surge:

• Shareholders increasingly demand companies better align compensation with performance. “To attract this kind of talent, “you have to address the fact that they’re usually walking away from a big pile of money. (…) And a way to do that is with the signing bonus. We’re seeing more of it,” said Jason Winmill, managing partner at legal department consultancy Argopoint.

• The increasingly common sentiment that the legal chief job has grown so complicated, and the consequences of making the wrong hire so dire, that hiring a legal chief who’s never done the job before is too risky. This explains why 61% of Fortune 500 companies filled GC openings externally last year, a big shift from the 50% who did so in 2020.

The Most Attractive Packages

The welcome packages have become so large that the most-sought-after GCs often rank among the 20 highest-paid GCs in the country in the first year, before sliding down the list the next years, a Law.com report says.

Here are the ten companies that offered the largest signing bonuses in 2023:

1. Salesforce offered its new Chief Legal Officer Sabastian Niles a $3 million signing bonus and $10,160,436 in equity

2. Oracle offered Stuart Levey a signing bonus of $650,000 and $11,537,388 in equity 

3. Lowe’s offered Juliette Pryor a signing bonus of $3,050,000 and $7,884,157 in equity 

4. CVS Health offered Sam Khichi a signing bonus of $2,000,000 and $8,499,944 in equity

5. Pinterest offered Wanji Walcott a signing bonus of $750,000 and $9,071,390 in equity

6. Etsy offered Colin Stretch a signing bonus of $150,000 and $6,292,980 in equity 

7. Archer Daniels Midland offered Regina Bynote Jones a signing bonus of $630,000 and $5,620,122 in equity

8. Discover Financial Services offered Hope Mehlman a signing bonus of $3,430,000 and $2,193,878 in equity

9. HP offered Julie Jacobs a signing bonus of $2,000,000 and $2,854,080 in equity 

10. Kohl’s offered Jennifer Kent a signing bonus of $450,000 and $3,849,991 in equity

“An Abundance of Risk”

Many recruiters shrug-off signing bonuses as just the cost of doing business for big public companies.

But signing bonuses are not necessarily the main factor behind GCs switching jobs, according to Mike Evers, principal of the recruiting firm Evers Legal. If they’re moving, it’s generally because something else is motivating them, such as a new challenge or a career enhancement.

Winmill added that companies handing out such huge packages face an abundance of risk, too. “If you have to throw millions of dollars at somebody before they start work, and then they start work and it doesn’t work out, you are up the creek because you’ve paid them a lot of money. Sunk costs are exactly that—sunk.”

A Continuing Trend

Designed to avoid large cash payouts and unvested grants of stock and stock options legal chiefs forfeit when they leave their employers, the welcome packages are likely to continue to swell in size despite the risks.