Lawyer Negotiated Eye-Popping Pay Deals for CEOs

The best CEOs were like pro athletes, he argued: They were in short supply and their job security was low, so they had to lock down a fortune while they could.

The scores of big-name executives he represented included Louis Gerstner (at RJR Nabisco Holdings Inc. and International Business Machines Corp.), George Fisher (Eastman Kodak Co.) and John Sculley (Apple Computer Inc.).

Mr. Bachelder, who charged as much as $975 an hour, didn’t apologize for occasionally representing disgraced CEOs. One of his clients, L. Dennis Kozlowski, was fired by Tyco International Ltd. and convicted in 2005 of looting millions of dollars from the company, partly by billing it for such expenses as $6,000 for a shower curtain.

“Someone doesn’t have to be the most popular person in America for me to represent him,” Mr. Bachelder told The Wall Street Journal in 2003.

The CEOs who benefited from his hard bargaining often didn’t have to pay for it. He persuaded many companies to pay his fees for negotiating against them. One reason companies were willing to pay was that he was known for reaching agreements rather than letting disputes drag on. He hired people with Ph.D. degrees in mathematics to help analyze the numbers.

Mr. Bachelder was a witness when a Senate committee headed by Sen. John McCain held a hearing on CEO pay in 2003. Reports of excessive pay deals “are making a lot of Americans angry,” Mr. McCain said.

Most CEOs were worth the money, Mr. Bachelder countered. “The vast majority of directors…likely would say that the single most important factor to a company’s success over the next several years is the CEO,” he said, adding: “On the whole I do not believe CEO pay has grown outrageously.”

Part of the problem, he said, was the difficulty of assigning values to stock options, which could produce vast gains—or nothing at all if the stock market tanked, though the options were sometimes repriced to restore value when that happened.

Stock options became popular, he said, because investors and academics wanted to link CEO pay to shareholders’ interests. Then stock prices soared in the 1990s. “In a sense,” Mr. Bachelder said, “we got what we asked for: We tied CEO pay to increasing shareholder wealth and shareholder wealth overall increased dramatically.”

Joseph Elmer Bachelder III, the oldest of three children, was born Nov. 13, 1932, in Fulton, Mo. He grew up in Durham, N.H., and Princeton, N.J. His father was a sociology professor and a pollster whose clients included Richard Nixon.

He attended the Phillips Exeter Academy. At Yale University, where he majored in political science, he was suspended for skipping classes but graduated magna cum laude in 1955. He earned his law degree at Harvard three years later.

While studying at Yale, he spotted Louise Mason, a recent high school graduate and the daughter of a law professor, Alpheus Mason. She was taking a tennis lesson. Mr. Bachelder introduced himself and offered to give her free tennis lessons. They married in 1955.

In the 1960s and 1970s, he worked at various New York law firms. At times, “I was a bit aggressive in expressing my views about who ought to become partner and who ought not,” he later said.

Mr. Bachelder set up his own firm in 1980 and began focusing on executive compensation. When he represented potential new CEOs in the early days, he was often up against squads of attorneys from big law firms. “It felt like David going up against Goliath,” he recalled.

David kept adding muscle. In 1989, Mr. Bachelder negotiated with RJR Nabisco and won a signing bonus for Mr. Gerstner valued at about $13 million. That widely publicized deal attracted more clients.

Rich packages won by big-name executives tended to raise the bar for others. “Extraordinary CEOs win special arrangements,” Mr. Bachelder told the New York Times in 2000. “Then those precedents become the standard…. Charlie Snoggs wants the same perks as Jack Welch.”

During the week, Mr. Bachelder and his wife lived in a suite at the Yale Club in New York. On weekends, they returned to their home in Princeton. Summer vacations were on Nantucket Island.

Mr. Bachelder never retired and in recent years was a special counsel in the New York office of McCarter & English. Howard Berkower, a partner at McCarter, recalled Mr. Bachelder as collegial, thorough in his analysis and precise in his writing: “He was sort of like a surgeon with his words.” Mr. Bachelder adapted his advice to current law and customs, which rule out many perks and benefits common a decade or two before.

For more than 30 years, he wrote for the New York Law Journal on compensation issues. Topics included clawbacks of executive pay when misconduct is discovered and “super options” awarded to Elon Musk.

He is survived by his wife of 65 years, along with a brother, Stephan Bachelder; a sister, Jane Johnson; three daughters, and four grandchildren.

Stephan Bachelder, a lawyer who sometimes worked with his brother, recalled discussing a conference call the two had just held with another lawyer.

“He raised a good point,” Stephan Bachelder said.

“Yes,” replied Joseph Bachelder, “and then stabbed his client with it.”

On another occasion, Joseph Bachelder was asked whether he thought certain clients were lying. “They were giving truth a respectful distance,” he said.

Write to James R. Hagerty at [email protected]