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In Brief

Today's Top Story

Inaugural ACC Global Compensation Report: Outside Experience Leads to Higher Total Pay

A new report from the Association of Corporate Counsel (ACC) providing benchmarking on salary and compensation found that the compensation gap between men and women is significant at the highest levels of law department leadership and smallest among entry-level in-house lawyers. According to the ACC 2018 Global Compensation Report, at the chief legal officer (CLO) and general counsel (GC) level, median total compensation for women is US$210,000, while the median total compensation earned by men holding these titles is US$270,000. However, the report found that the gap may be diminishing. The difference in median compensation among GCs who received a law degree after 2010 is less than half of the gap among GCs who graduated law school before 2000, reports ACC (10 July). "While it was not a surprise, it was certainly disheartening to see the extent of gender pay disparities in the in-house community," said Veta T. Richardson, president & CEO of ACC. "Yet we are optimistic that the gap appears to shrink for newer generations of corporate counsel leaders and hope the data in the survey will yield more transparency." The report found that entry level in-house lawyers have more pay equality than other positions, with women earning 91 cents on the dollar compared to their male colleagues. Meanwhile, the pay gap culminates for lawyers who have 11 to 20 years of in-house tenure; female in-house lawyers receive 69 percent of their male counterparts' compensation. The report includes salary and benefits data from more than 5,000 in-house counsel and legal operations professionals in 65 countries.

From "Inaugural ACC Global Compensation Report: Outside Experience Leads to Higher Total Pay"
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Legal Actions

Citi Settles Charges Over Bad Controls, Supervision

The U.S. Securities and Exchange Commission (SEC) said Citigroup agreed to pay US$10.5 million to settle two separate complaints. The first complaint is related to bad loans made by Banamex, its Mexican subsidiary, between 2008 and 2014. The other complaint concerned a trader mismarking illiquid positions and unauthorized proprietary trading by Citigroup Global Markets Inc. (CGMI) from 2013 to 2016, the regulator said. Citigroup and CGMI settled the allegations without admitting or denying the SEC's findings, reports Reuters (16 August, Lambert, McCrank).

From "Citi Settles Charges Over Bad Controls, Supervision"
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Regulatory Developments

RBC Whistleblower Protections Under U.K. Scrutiny

The U.K.'s Financial Conduct Authority (FCA) is scrutinizing whistleblower protections at Royal Bank of Canada (RBC) after a former trader at the bank won his case for unfair dismissal and at least five more potentially similar cases came to light. The London-based RBC staff involved allege to have been dismissed without due process after highlighting legal and compliance problems across a range of businesses, according to people familiar with the matter. The FCA scrutiny comes as the regulator tries to demonstrate it takes the treatment of whistleblowers seriously, reports the Financial Times (17 August, Martin, Binham). "For individuals to have the confidence to come forward, it is vital that firms have in place adequate policies on dealing with whistleblowers and that a senior manager takes responsibility for overseeing these policies," the FCA said.

From "RBC Whistleblower Protections Under U.K. Scrutiny"
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Mergers and Acquisitions

Australia's Giants Plan to Get Richer by Shrinking Fast

Some of Australia's biggest and oldest companies are trying to shrink in a bet that simpler and more focused operations can deliver bigger returns. Next year, Commonwealth Bank will spin off its wealth-management business, valued at as much as AU$10 billion. Meanwhile, in November, Wesfarmers plans to spin off supermarket chain Coles, with an estimated market value of AU$18 billion, in a deal that unwinds Australia's last big conglomerate. Wesfarmers investors are already benefiting from the company's smaller footprint, even before Coles officially departs. The stock has soared 30 percent from a February low after the company quit home-improvements in the U.K., exited coal and auto repairs, and announced the Coles spinoff, reports Bloomberg (16 August, Whitley). "You go through these periods where companies are urged to get bigger and accumulate things," said Brian Han, an analyst at Morningstar Inc. in Sydney. "And then you reach the other end of the cycle where investors and directors start thinking it's more efficient to spin them off."

From "Australia's Giants Plan to Get Richer by Shrinking Fast"
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Board/Management Relations

Anadarko Names General Counsel

Amanda M. McMillian has been named executive vice president and general counsel of Anadarko Petroleum Corp., effective immediately. Robert K. Reeves, the company's executive vice president, law and chief administrative officer, will remain in his role until his retirement at the end of 2018. McMillian has served in various positions since joining Anadarko in December 2004, reports E&P (16 August).

From "Anadarko Names General Counsel"
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Labor and Employment

Are Job Ads Targeting Younger Workers Breaking the Law?

Several pending lawsuits seeking to determine whether employers are breaking the law by posting job ads targeting younger workers could help improve job opportunities for older Americans, according to National Public Radio (16 August, Noguchi). One suit filed by the Communications Workers of America claims T-Mobile, Facebook, and other companies discriminate by excluding older workers from seeing their ads. In December, a Facebook official contended that tailoring ads is not unlawful, provided the recruitment campaign overall is designed to reach all demographic groups. Although workplace civil rights law bans discrimination against workers 40 and older, employee advocates say recruiters sometimes exclude older workers by narrowing how and where they seek candidates. Other recent lawsuits have challenged whether an employer can recruit exclusively on college campuses and the legality of capping the number of years of experience an applicant can have. "We see that this is one of the factors that keeps older workers out of the job market after a job loss," says the Communications Workers of America's Jody Calemine. She calls targeted advertising a new frontier for discrimination. "Hiring discrimination is very difficult to prove, because the applicant is on the outside looking in," notes AARP Foundation attorney Laurie McCann. In such cases, applicants do not allege the employer discriminated against them personally, but that the recruiting process itself is biased. "The issue is whether or not workers can even get into the courthouse door to challenge that practice that clearly screens out older workers," McCann says.

From "Are Job Ads Targeting Younger Workers Breaking the Law?"
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Chinese Hackers Targeted U.S. Firms, Researchers Say

According to cybersecurity firm Recorded Future, hackers operating from China's Tsinghua University probed U.S. companies and government departments for espionage opportunities after a U.S. trade delegation visit to China earlier this year. The hackers specifically looked at U.S. energy and communications companies, as well as the Alaskan state government, in the weeks before and after Alaska's trade mission to China, reports Reuters (16 August, Bing, Stubbs). Organizations involved in the trade mission were subject to focused attention from Chinese hackers, underscoring the tensions around an escalating trade war between Washington and Beijing. In its report, Recorded Future said that the websites of Alaskan internet service providers and government offices were inspected by university computers looking for security flaws, which can be used by hackers to break into normally locked and confidential systems. A Tsinghua University official said the allegations were false. It is unclear whether the targeted systems were compromised, but the highly focused and extensive scanning activity indicates a "serious interest" in hacking them, said Priscilla Moriuchi, director of strategic threat development at Recorded Future.

From "Chinese Hackers Targeted U.S. Firms, Researchers Say"
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AMP Back in Inquiry Hot Seat as Pension Transfers Challenged

An inquiry into Australia's financial system has found that AMP, the country's largest retirement and wealth management firm, paid hundreds of millions of dollars from customer accounts to subsidiaries without proper documentation, reports Reuters (16 August, Duran). Richard Allert, chairman of AMP Super, said the paperwork detailing the revelation was a surprise to him. However, investigators also discovered that AMP Super had little oversight and Allert was not involved in reviews of company funds. A legal expert says the inquiry will likely raise additional questions about whether AMP was complying with laws to act in the interest of clients.

From "AMP Back in Inquiry Hot Seat as Pension Transfers Challenged"
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Corporate Structure

Maersk to Spin Off Drilling Unit

A.P. Moeller-Maersk on Friday announced it will seek a separate listing of its drilling unit in 2019, aiming to generate cash proceeds of approximately US$1.2 billion by floating the entire unit, reports the Wall Street Journal (17 August, Chopping). The move is part of the Danish freight carrier's efforts to reshape itself into a global supply chain player. Maersk Drilling's fleet of drilling rigs was put on the selling block back in 2016 when the company rolled out a strategic plan to transform itself from a sprawling shipping and energy conglomerate into an integrated container logistics firm. Company officials had set a deadline to sell or list Maersk Drilling by the end of this year. But on Friday, the company said a listing in Copenhagen next year would offer the best prospects for its shareholders, offering them the possibility to participate in the value creation opportunity of a globally leading pure play offshore drilling company with long-term development prospects.

From "Maersk to Spin Off Drilling Unit"
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Venezuela Pays Settlement With Mining Company Using Bonds

Venezuela made a payment to a mining company using government bonds instead of cash, which could be the first time it has done so since U.S. sanctions last year blocked similar transactions. Gold Reserve Inc., a mining company incorporated in Canada and headquartered in Spokane, Wash., said that it had received Venezuelan government bonds with an estimated value of around US$88.5 million, reports the Wall Street Journal (16 August, Wernau, Scurria). The payment was part of a settlement agreement that calls for the Venezuelan government to pay the mining company around US$1 billion related to a project in the country.

From "Venezuela Pays Settlement With Mining Company Using Bonds"
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Trump Encourages Government to Sue Opioid Companies

President Trump on Thursday called on Attorney General Jeff Sessions to sue opioid companies, reports the Wall Street Journal (16 August, Ballhaus). In a cabinet meeting Thursday, Trump asked Sessions to bring federal lawsuits against certain companies supplying opioids to hospitals instead of joining state lawsuits. He also charged Sessions with investigating fentanyl coming from China and Mexico. More than a dozen states, as well as municipalities and Native American tribes, have filed over 1,000 lawsuits against drugmakers, claiming an aggressive marketing of prescription painkillers contributed to the opioid addiction epidemic. Among the companies targeted are Johnson & Johnson, Purdue Pharma, and Teva Pharmaceuticals. Many suits have also targeted drug distributors, such as Amerisource Bergen and McKesson, contending those firms failed to properly control shipments of opioids to pharmacies.

From "Trump Encourages Government to Sue Opioid Companies"
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Elite CEO Pay Jumps to Average of US$19 Million

Top executives of the largest U.S. companies saw their average annual pay increase 18 percent to US$18.9 million last year, according to a new report by the Economic Policy Institute (EPI) and cited by the Washington Post (16 August, Stein, McGregor). The jump in CEO pay shown in the report by the left-leaning think tank is driven primarily by big increases in the stock market over the last year. The bulk of CEO compensation is made up of stock grants or stock options, which can lead to substantial paydays for chief executives when companies perform well in the market. EPI's US$18.9 million figure is an average of CEO compensation among the 350 largest U.S. companies and includes the value that CEOs have realized from stock options, as well as salary, bonus, restricted stock grant awards, and other long-term incentive payouts. Consequently, that figure appears different from other CEO pay analyses.

From "Elite CEO Pay Jumps to Average of US$19 Million"
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Corporate Social Responsibility

Google Employees Protest Work on Censored Search Engine for China

Hundreds of Google employees have signed a letter demanding more transparency after the company decided to secretly build a censored version of its search engine for China. In the letter, employees wrote that the project and Google's willingness to abide by China's censorship requirements "raise urgent moral and ethical issues." They also said they do not have enough information on the project to make "ethically-informed decisions" about their work, projects, and employment. According to three people familiar with the project, the letter is circulating on Google's internal communication systems and is signed by about 1,400 employees. In April, Google's employees spoke out against its involvement in a Pentagon program that uses artificial intelligence to improve weaponry. A couple months later, Google said it would not renew a contract with the Pentagon for artificial intelligence work, reports the New York Times (16 August, Conger, Wakabayashi). The internal activism is an obstacle for Google as it tries to return to China eight years after it withdrew from the country in protest of censorship and government hacking.

From "Google Employees Protest Work on Censored Search Engine for China"
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