Compensation

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I think that the GCs at Big Pharma have hacked into my Zoom account. First, some background. Earlier this week, I asked my students in UM’s Lawyering in a Pandemic course to imagine that they were the compliance officers or GCs at the drug companies involved in Operation Warp Speed, the public-private partnership formed to find a vaccine for COVID-19 in months, rather than years. I asked the students what they would do if they thought that the scientists were cutting corners to meet the government’s deadlines. Some indicated that they would report it internally and then externally, if necessary.

I hated to burst their bubbles, but I explained that the current administration hasn’t been too welcoming to whistleblowers. I had served on a non-partisan, multi-stakeholder Department of Labor Whistleblower Protection Advisory Committee when President Trump came into office, which was disbanded shortly thereafter. For over a year after that, I received calls from concerned scientists asking where they could lodge complaints. With that background, I wanted my students to think about how company executives could reasonably would report on cutting corners to the government that was requiring the “warp speed” results in the first place. We didn’t even…

At a time when many boards may be thinking of tax planning and possible M & A deals, they may have to start focusing more on the unseemly topic of their executives' sex lives because the flood of terminations and resignations due to sexual misconduct shows no signs of slowing down. One of the most shocking but underreported terminations in 2017 related to VISA. The CEO, one year into the role, chose to terminate one of his most valuable executives after an anonymous tip about sexual misconduct.  He wanted his employees to know that the corporate culture and values mattered. Board members should look closely at the VISA example.

We will continue to see the rise of the #MeToo movement spurred on in part by the messaging from a star-studded task force  formed to address Hollywood issues and the establishment of a multimillion-dollar legal defense fund to help blue-collar workers. Even Supreme Court Chief Justice Roberts addressed sexual harassment in the court system in his Year-End Report on the Federal Judiciary.  More people than ever may now choose to come forward with claims of harassment or assault. Whether companies choose to terminate wrongdoers or the accused choose to…

Last weekend, retired NFL receiver Calvin Johnson made news when he revealed that he was not pleased with the Detroit Lions and how they handled his retirement. Johnson is apparently frustrated that the Lions required him to pay back about 10% of the  unearned $3.2 million remaining on his $16 million signing bonus from his 2012 contract. This is apparently a thing for the Lions, who sought all of the unearned signing bonus money remaining on Barry Sanders' contract when he abruptly retired in 1999.

This is in contrast to Tony Romo's retirement, in which the Dallas Cowboys released him, making the $5 million remaining on the signing bonus Romo's.  Cowboys owner Jerry Jones said he was following the “Do Right Rule” when he allowed the team to release him.  The Seattle Seahawks made a similar decision with Marshawn Lynch.  

Some have argued that Johnson is being "pettier" than the Lions in this spat.  Mike Florio, a sports writer and graduate of WVU College of Law, where I teach, argued that "while Johnson has every right to be miffed at the Lions, Johnson also should be miffed at himself. Or at whoever advised him to retire instead of biding his time until…

The Washington Post reports: 

Back in 2015, Salesforce CEO Marc Benioff admitted something many CEOs wouldn't: The company had found a pay gap between the men and women who worked for the cloud computing giant, and it was spending $3 million to fix it. Now after acquisitions and rampant growth at the company brought in 7,000 new employees in the past year, he's doing it again, announcing Tuesday that the company has spent another $3 million to adjust for a pay gap that affects 11 percent of its more than 25,000 employees.

In an interview with The Washington Post, Benioff said he believed the re-opened gap was largely because of the company's acquisitive streak — it bought 14 companies in its last fiscal year, the largest in its history. When companies acquire others, Benioff said, "you buy their pay practices, and this pay practice — of, basically, gender discrimination — is quite dramatic through our industry and other industries," he said.

If one cares about equal pay, and I think people should (beyond just today), one needs to account for it in the purchase price of another entity.  This is a great reminder about the due diligence process. We need to think about all the things that…

If you were at the SEALS Conference panel on crowdfunding last summer, you heard me talk a bit about women’s athletic apparel company Oiselle and the interesting running team part of their business.

In addition to building a team of amateur runners, Oiselle sponsors a number of professional athletes. Kate Grace was the first of the sponsored athletes, signing with Oiselle in 2012. Last year Kate won the U.S. Olympic Trials in the 800m, and she made the Olympic finals in the same distance.

Kate Grace’s sponsorship contract with Oiselle expired at the end of 2016, and Oiselle recently posted a classy goodbye.

A 2011 Yale University graduate, and now an Olympian, Kate Grace is talented, promising, and instantly likeable. She has already accomplished a great deal in the running world, but she is likely to accomplish even more. Kate Grace is on record as praising Oiselle as incredibly supportive of her and full of people with whom she has strong relationships.

So why didn’t Kate Grace and Oiselle sign a sponsorship contract for 2017 and beyond? This is a question I may pose to my negotiation classes.

To be clear, everything below is pure…

Last week, Hamdi Ulukaya, founder and CEO of Chobani, announced a 10% company stock grant to all company employees.  Chobani joined the ranks of high profile stock grants including Whole Foods, Starbucks, Apple and Twitter.  Stock grants, while more common in tech industries, are a part of hybrid corporate law-employment law conversation on shared ownership.  Employee ownership in companies can occur in several different forms such as ERISA-governed benefit plans where the company stock issued or bought as a part of a retirement saving plan. Alternatively, a stock grant may be structured as a bonus plan, a standard compensation, or a vesting employee benefit eligible after threshold years and types of service.  All of these plans fall under the rubric of shared ownership.  In 2015, the National Center for Employee Benefits estimated that over 9000 companies participated in some form of shared ownership.

In a similar vein, actors in the hit (and record-breaking with 16 Tony Nominations) musical Hamilton have entered into a profit-sharing agreement with producers.  The deal is different for these actors, but the sentiment is the same in sharing profits, aligning interests, and promoting employee loyalty.

Shared ownership plans, especially the ERISA-governed ones can…

I feel badly for Chipotle. When I have taught Business Associations, I have used the chain’s Form 10-K to explain some basic governance and securities law principles. The students can relate to Chipotle and Shake Shack (another example I use) and they therefore remain engaged as we go through the filings. Chipotle has recently been embroiled in a public relations nightmare after a spate of food poisonings occurred last fall and winter, a risk it pointed out in its February 2015 10-K filings. The stock price has fluctuated from $750 a share in October to as low as $400 in January and then back to the mid $500 range. After some disappointing earnings news the stock is now trading at around $471.

Clean Yield Group, concerned that the company will focus only on bringing its stock back to “pre-crisis levels,” filed a shareholder proposal March 17th asking the company to link executive compensation with sustainability efforts. The proposal claims that the CEO was overpaid by $40 million in 2014 and states in part:

A number of studies demonstrate a firm link between superior corporate sustainability performance and financial outperformance relative to peers. Firms with superior sustainability performance were more likely…

In my final post on the subject of “respectability” of lawyers (the first four can be found here, here, here and here), I’d like to tie my thoughts together, discussing what the various parties can do to make Bird and Orozco’s thesis of assimilation of lawyers into corporate business teams the “new normal”.  This should give lawyers more career opportunities in the future, slow the loss of influence of the legal profession in businesses, and make legal education a more attractive choice.  Much of the discussion in academia has ignored the in-house counsel approach as being a viable option for the woes of the legal industry.  Below the fold, this post will discuss the roles that academia, in-house counsel, and business firms each may play in increasing the potential for success of a new model for business lawyers.

In my first post of this series, I asked whether business leaders had unknowingly provided the legal industry with a long-term solution to declining interest in the legal profession and potential waning influence.  I suggested that business leaders may be the driving force that ends up saving the legal profession, and its "respectability".  In my second post, I discussed the current state of in-house attorneys.  In this post, I would like to look at the current state of private firms as it relates to the in-house attorney discussion.  My view is that the competitive marketplace reactions of a growing number of firms are partially contributing to the dimming of their own future prospects.  Firms will need to evolve rather quickly; how they can, I’ll discuss in a future post.  However, because of the firms’ relatively weaker position compared to corporations, many firms are in very precarious circumstances.

In this interim period between past firm dominance and the future corporate acceptance of Professors Bird and Orozco’s “corporate legal strategy” (in which attorneys are fully accepted and integrated as part of business teams in corporations, resulting in greater legal opportunities), firms are struggling.   From my discussions with attorneys, I have learned that…

We want the best for both of our kids, and we are working to help them learn as much as they can about being good people and successful people. We're fortunate that we have a (relatively) stable life, we've had good health, and we're able to provide our children a lot of opportunities.  For my daughter, as I have noted before, I do worry about institutional limits that are placed on her in many contexts. 

She's in first grade, but expectations are already being set.  On her homework last week: a little boy in her reading comprehension story builds a tower with sticks and bricks and stones.  Next story: a little girl gets fancy bows in her hair instead of her usual ponytails.  I wish I were making this up.  

This is more pervasive than I think many people appreciate.  Take, for example, the Barbie computer science book that had people raising their eyebrows (and cursing).  NPR has a report explaining the basic issues here. The basics:

A book called Barbie: I Can Be A Computer Engineer was originally published in 2010. Author and Disney screenwriter Pamela Ribon discovered the book at a friend's house and was

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