Photo by Kārlis Dambrāns

Huawei Technologies sued Samsung Electronics on claims of infringement of smartphone patents, the Chinese firm’s first intellectual property challenge against the world’s top mobile maker, reports Reuters.

“Huawei has filed lawsuits in the United States and China seeking compensation for what it said was unlicensed use of fourth-generation (4G) cellular communications technology, operating systems and user interface software in Samsung phones,” according to the report.”

“The lawsuit marks a reversal of roles in China where firms have often been on the receiving end of patent infringement disputes. In smartphones, makers have grown rapidly in recent years but different intellectual property laws outside of China have slowed overseas expansion,” writes Yimou Lee and Anne Marie Roantree.

Read the article.

The Rock Center for Corporate Governance at Stanford University recently conducted a nationwide survey of 1,202 individuals — representative by gender, race, age, political affiliation, household income, and state residence — to understand public perception of CEO pay levels among the 500 largest publicly traded corporations.

“74 percent of Americans believe that CEOs are not paid the correct amount relative to the average worker,” the survey found. “Only 16 percent believe that they are. While responses vary across demographic groups (e.g., political affiliation and household income), overall sentiment regarding CEO pay remains highly negative.

Key takeaways are:

• CEOs are vastly overpaid, according to most Americans
• Most support drastic reductions
• The public is divided on government intervention

Download the survey.

Masimo Corp. founder and CEO Joe Kiani

The top 500 chief executive officers in American companies earned 340 times the average worker’s wage last year, taking home $12.4m on average, according to an analysis by the AFL-CIO, reports The Guardian.

The union’s analysis found that the pay of executives leading the S&P 500 index of top companies actually dipped last year. The figure in 2014 for the same group was 373 times more than their workers, earning on average $13.5m.

“The marginal drop in pay comes despite some eye-watering payouts for the three highest-paid CEOs – Masimo Corporation’s Joe Kiani, Timothy Walbert of Horizon Pharma and Gamco Investors’ Mario Gabelli – who took home nearly $3bn between them, according to the AFL-CIO,” the Guardian story says.

The average production worker who does not hold a supervisory role,earned about $36,900 a year in 2015.

Read the article.

A Delaware judge has dismissed a lawsuit by Wal-Mart Stores Inc. shareholders who accused the board of the world’s largest retailer of trying to cover up bribes paid by company executives in Mexico, according to a report by Reuters.

The Delaware judge ruled that an earlier dismissal by an Arkansas judge of a nearly identical lawsuit by another group of shareholders precluded the Delaware case from going forward.

“He said that while the Arkansas plaintiffs may have chosen to rush their case rather than fully investigate alleged wrongdoing, their haste did not disqualify them from representing Wal-Mart shareholders,” Reuters reported.

In 2012, The New York Times reported that found Wal-Mart had engaged in a multi-year bribery campaign to build its Wal-Mart de Mexico business.

Read the article.

Foley & Lardner LLP announced that Lou Cohen and Elgie Sims Jr. have joined the firm’s Business Law Department as of counsel in the Chicago office.

“We are thrilled to welcome Lou and Elgie. Together, they add unique transactional and public policy experience combined with a deep understanding of the Chicago market that will significantly enhance our offerings to clients,” said Myles Berman, managing partner of Foley’s Chicago office.

In a release, the firm said Cohen has led and handled high-profile real estate transactions for international and domestic lenders, developers, real estate investment trusts, public pension funds, pension fund advisors, insurance companies and governmental entities. He served as lead counsel for the owner and redeveloper of the Chicago Soho House Club, and represented the City of Atlanta in negotiations surrounding the development of the $1.4 billion stadium for the Atlanta Falcons. His practice is focused on commercial real estate development, including acquisitions and dispositions, venture structuring and formation, leasing, lending, restructuring and workouts.

“Lou is an accomplished and well-known real estate attorney in Chicago and the Midwest. His ability to manage complex real estate transactions will be a great service to our institutional and other major real estate clients,” said Fred Ridley, chair of Foley’s Real Estate Practice.

Sims, who is currently the Illinois state representative for the 34th District, will focus on government affairs and municipal finance as a member of the firm’s Government & Public Policy and Public Finance Practices. Sims has an extensive background representing clients and spearheading complex legislative initiatives before various branches of federal, state and local governments. Several of his legislative accomplishments include passage of Illinois’ film tax credit, which helped the film industry generate over $330 million in spending in 2015, and changes to Illinois’ nursing home reimbursement model. As state representative, he was the chief House sponsor of Senate Bill 1304, which established a clear policy and guidelines for police body-worn cameras and police reform initiatives. He currently serves as chairman of the Illinois House Judiciary Criminal Committee and a member of the Business and Occupational Licenses, Elementary & Secondary Education; Curriculum and Policies, Higher Education, Transportation, Regulation and Roads and Revenue and Finance Committees.

“As a lawyer and legislator, Elgie’s knowledge of the intricacies behind local and state government policies will benefit a broad range of our clients, from Fortune 500 businesses to health care companies to non-profit organizations. We look forward to adding his Midwest expertise to our established national bench,” said David Ralston, chair of Foley’s Government & Public Policy Practice.

Prior to joining Foley, Cohen was a partner at Locke Lord.

Some U.S. companies are now paying a top hourly rate of $2,000 to partners at the country’s biggest law firms, according to a report on a survey released by BTI Consulting Group.

The report says the top rate of $2,000 an hour in 2015, up from $1,600 last year, represents a 25 percent one-year increase.

BTI conducted more than 300 independent, individual interviews with CLOs and general counsel at Fortune 1000 companies and large organizations.

The company said GCs pay the highest rates for:

• Bet-the-company IP work
• Enterprise level M&A related litigation
• Large-scale government investigation
• Defense against high-profile activist hedge funds

Read the article.

The amount of time board directors spend on their work and commit to strategy is rising, but in a new McKinsey Global Survey, few respondents rate their boards as effective at most tasks or report good feedback or training practices, according to an article on McKinsey’s website.

“Directors say they dedicate more time now to their board duties than ever before and that, since 2011, they’ve cut in half the gap between the actual and ideal amount of time they spend on board work,” the report says. “In the newest McKinsey Global Survey on corporate boards, the results confirm that strategy is, on average, the main focus of many boards. Yet directors still want more time for strategy—more than any other area of their board work—when they consider its relative value to their companies.”

Read the article.

Cablevision’s top 10 executives may find themselves without a job after the company’s new owner, Netherlands-based Altice NV, completes the purchase of the Long Island-based company, possibly later this month, reports The New York Post.

The 10 Cablevision executives include General Counsel David Ellen and CEO James Dolan.

“Altice founder Patrick Drahi told Cablevision staff when the deal was first announced last year that he would seek to cut executives earning more than $300,000,” The Post reports.

Read the article.

Photo by Mike Mozart of JeepersMedia

Regulators fighting the merger plan of Office Depot and Staples face a decision from a judge that may hinge on the veracity of the government’s relevant product market, reports Policy and Regulatory Report, a Mergermarket Group company. The issue of whether the Federal Trade Commission (FTC) gerrymandered its market has repeatedly surfaced during the government’s pursuit of a preliminary injunction against the proposed merger.

PaRR Global (Policy and Regulatory Report) spoke to various independent sources to assess holes in the arguments of both the FTC and the merging companies.

In its case, the FTC defined the relevant product market as “consumable office supplies,” such as pens and paper, which constitute a so-called cluster market, according to the PaRR analysis.

A cluster market is used in antitrust theory to group separate individual relevant product markets, such as the individual market for paper and the individual market for pens, into a wider market for analytical convenience.

Clustering is appropriate “only when the individual products face similar competitive conditions,” according to the government’s proposed findings of fact.

Read the article.

Exari, a provider of cloud-based contract lifecycle management solutions, has announced the release of its Contract Risk Playbook: Risks Hiding in Plain View, an advanced guide for Corporate Boards and Senior Executives.

Contract risk is a board level issue that has been difficult to quantify, Exari says on its website. Understanding contract risk requires a comprehensive business plan to capture, organize, analyze and improve the contract management process across the entire enterprise. By understanding the rights and obligations contained in contract assets, board directors and executives can better determine the underlying risk profile of their firm. As a result, they can take definitive action to reduce risk and improve long-term sustainability.

The Contract Risk Playbook breaks down the risks for Boards and Executives who lack control over monitoring their contracts. The playbook gives step by step guidance on how to assess contractual risk from an enterprise level, take action and move forward proactively.

Exari says firms often lack the right tools and processes for managing contractual relationships, which can result in major risks, such as regulatory compliance and expensive outside legal costs. Risk exposures need to be managed proactively at an enterprise level in order to reduce risk and improve operational excellence before a crisis emerges. Most companies store contracts electronically but are unable to understand the relationship between contract terms across all their contracts.

Download the playbook.

The National Association of Corporate Directors (NACD) has published for download “How to Ensure Organizational Resiliency,” a featured article in the latest issue of NACD Directorship magazine.

The article explores what directors think boards can do to ensure a company’s survival — despite high rates of business failure.

NACD Directorship magazine, a leading source of boardroom intelligence and corporate governance information for board directors, is an exclusive benefit of NACD membership, but General Counsel News readers are invited to download a complimentary copy.

Download the article.

In a new on-demand video, TK Kerstetter, host of “Inside America’s Boardrooms,” reviews three areas where many boards can improve their performance and effectiveness. Topics include board composition & leadership, board evaluations, and shareholder engagement.

Kerstetter also discusses PwC’s recent Annual Corporate Directors Survey, which reported that 39 percent of directors feel that at least one fellow board member should be replaced.

Ty Francis, EVP & Group Publisher of the Ethisphere Institute, joins in the discussion.

Watch the video.

Photo by Brian Solis

Facebook announced that it plans to issue a third class of shares, Class C, that will not include voting power for its shareholders.

The purpose is to allow co-founder, chairman and CEO Mark Zuckerberg and his wife, Priscilla Chan, to pursue their dream of giving 99 percent of their shares to charity, without losing any of his voting control, according to a report in The Los Angeles Times.

“Shareholders will have to vote on the arrangement, but because non-Zuckerberg voting power already is a joke, we can assume it will pass,” The Times says.

Read the article.

One in three U.S. board members and executives are “very concerned” that the climate of uncertainty and volatility may pose a significant threat to their corporate strategy, and more than three in four worry that management tends to use outdated assumptions in setting strategy, according to a survey by the Board Leadership Center of KPMG LLP, the audit, tax and advisory firm.

KPMG’s latest Roundtable Series gathered over 1,200 corporate directors and senior executives across 17 cities to share their views on the board’s role in calibrating strategy. Thirty-two percent of those surveyed said they are “very concerned” that management tends to use “more of the same” assumptions regarding key factors and uncertainties in setting strategy, and another 46 percent said they are “somewhat concerned.”

Survey respondents ranked economic uncertainty (61 percent), technology and innovation (58 percent), and government regulation (57 percent) as having the most significant impact on the company’s strategy or the assumptions underlying it.

Read the article.

Live Conference:
Tuesday, May 3, 2:30 p.m.,
New York, NY

Bloomberg BNA will present a live conference titled Big Law Business Diversity & Inclusion Conference: A Call to Action, the third in the series of Diversity & Inclusion events, where Big Law Business will begin to take the next steps toward driving results and holding our profession accountable for progress.

The event will be on Tuesday, May 3, 2016 in New York, NY, beginning at 2:30 p.m. EDT and ending with an hour-long reception at 5:30 p.m. It will be at  the Harold Pratt House at 58 East 68th Street. General Counsel News readers may attend at no charge. (Registration form)

General counsel and their legal teams play a unique and important role in the conversation regarding Diversity & Inclusion in the legal profession – as the buyside of legal services, they are well-positioned to drive and influence the quality of legal services they receive. They are also currently moving more legal work in-house and the department’s ability to ensure diversity of ideas and thought leadership within their own teams is critical.

During this exclusive event, Big Law Business will convene chief legal counsel and their corporate senior diversity officers as well as law firm managing partners to focus on actionable results, accountability, and drive movement forward toward diversity in the legal profession.

The event is an opportunity to explore the success Big Law practices are having meeting their own workforce diversification goals, plus:

• Interviews and presentations on best practice
• Methods law schools, law firms, and the judiciary can utilize to collaborate to feed the in-house pipeline
• Ideas to take back to legal departments for immediate and long-term action

The conference agenda is available online.

Register for the conference.

“How to Ensure Organizational Resiliency,” a featured article in the latest issue of NACD Directorship magazine, explores what directors think boards can do to ensure a company’s survival — despite high rates of business failure.

NACD Directorship magazine is an exclusive benefit of membership in the National Association of Corporate Directors, but NACD has made this article available without a subscription.

The article discusses roundtables co-hosted by NACD and Dentons to explore directors’ perspectives on what contributes to the resiliency of an organization.

Prior to the dinners in Scottsdale, Chicago, and New York, each group of the invited directors was asked to consider the following questions:

• What is the board’s role in assessing threats, determining responses, and in educating or monitoring employees?
• How are risks presented to the board by management?
• How are risk assumptions challenged?
• How does the board approach the identification of new risks?
• What are the common threads running through business failures such as Arthur Andersen, Barings Bank, Enron, Lehman Bros., and others, and what can be learned from them?
• How do you assess insider threats?

Read the article.

Now more than ever, corporate directors are finding themselves named in lawsuits, says Katherine Henderson, veteran insurance board advisor and partner with Wilson Sonsini, in a video posted by Boardroom Resources LLC.

“Today, any major decision from the company or board level seems to result in some form of legal action,” Boardroom Resources says on its website. “All this increased litigation begs the question – what’s the level of personal liability for directors on public boards and how can their liability be mitigated?”

In the video, Henderson discusses the current state of board liability, along with what you need to know about your D&O policy. She also outlines what steps to take to mitigate your risk of being sued.

Watch the on-demand video.

The argument for corporate longevity is quite simple: achieving something strategic, significant, and sustainable almost always takes time, writes Wendell P. Weeks, chief executive officer of Corning, in an article posted by McKinsey & Company. Longevity is particularly important for innovation because time and sustained investment are needed to solve really tough problems. To help explain why, he considers an example from the history of his company.

He tells the story of Corning’s early experiments with optical technology in an effort to solve the problem of strained copper lines for phone carriers.

“Today, more than two billion kilometers of optical fiber have been installed worldwide, and a single fiber can transmit the entire collection of the US Library of Congress from Florida to London in less than 25 seconds. This life-changing invention would not have been possible without a long-term focus and sustained investment—a pattern that has repeated itself throughout Corning’s history,” he writes.

Read the article.

Veteran real estate lawyer William “Bill” Ellis has joined Akerman LLP‘s Los Angeles office as a partner in the Real Estate Practice Group.

Ellis is former general counsel of global real estate conglomerate Reading International Inc. Prior to Reading, Ellis was a real estate partner at Sidley Austin, and he began his career at Morgan, Lewis and Bockius in Los Angeles.

“Bill is an industry veteran, who is known for his experience in complex real estate transactions for institutional investors and lenders,” said Richard Bezold, Real Estate Practice Group Chair. “He brings tremendous market knowledge in the hospitality and retail sectors, and adds important depth to our fast-growing practice in Los Angeles and across the region.”

In a release, the firm said Ellis has more than 30years of transactional real estate experience handling workouts and restructurings, leasing, acquisitions, dispositions, financings, joint ventures and developments across the United States. He works with private equity funds, global financial institutions, investment banks, real estate investment trusts, investment funds and private developers based both in New York and on the West Coast. He also has significant experience in corporate and securities transactions, including corporate mergers and acquisitions and initial public offerings.

Ellis previously served as general counsel and NASDAQ-listed Reading International Inc., the successor to Reading Railroad and now developer, owner and operator of retail and commercial real estate in Australia, New Zealand and the United States, including entertainment-themed retail centers, multiplex cinemas and live theater assets in Chicago and New York.

The National Association of Corporate Directors (NACD) has recently released its annual report on director compensation – a valuable guide NACD members use to benchmark their board’s compensation practices.

Determining what constitutes fair director pay is no easy task, the association says in a release. It’s important to periodically review your board’s compensation practices and to understand how they compare to those of your industry peers.

Compiled in partnership with Pearl Meyer, the report provides a comprehensive overview of non-employee-director pay practices across a wide range of industries and company sizes. The report also includes six leading practices for director compensation from the Report of the NACD Blue Ribbon Commission on Director Compensation.

Download the report’s summary.