In today's briefing, we ask why execs continue to risk scrutiny for ill-timed stock sales and examine the latest snarl for ex-Uber GC Salle Yoo. Plus, some advice on satisfying the SEC's new pay-ratio disclosure rule.

I'm Jennifer Williams-Alvarez, bringing you the latest on what's happening in-house. If you have questions or tips, you can email me at [email protected] or find me on Twitter at @jenkayw.

➤➤ Would you like to receive this briefing as an email? Sign up here.

What's happening –

ON THE SIDE OF DREAMERS. Last week, more than 100 execs sent a letter to lawmakers, urging them to quickly pass legislation to protect the status of undocumented immigrants who arrived in the U.S. as children, as the Deferred Action for Childhood Arrivals expiration date looms. I reached out to in-house counsel from a number of the signatories—here's what some of them had to say:

● “One of Cisco's great strengths is our diverse workforce. We strongly support giving those brought to the U.S. as children and raised here the opportunity to work and live in the country that for many is the only home they know. Since political leaders of both parties agree that the Dreamers deserve to be able to continue their lives in this country, it's important our leaders act swiftly and not hold these innocent individuals hostage to other political goals.”
— Cisco general counsel Mark Chandler.

● “Dropbox has always been supportive of just, common sense immigration policies that align with our values of inclusivity and diversity. That's why we urged Congress to pass bipartisan legislation that provides a permanent fix for DACA. Dreamers strengthen our communities and add vibrancy to our culture — and our immigration laws should reflect that.”
— Dropbox general counsel Bart Volkmer.

➤ The other side. While there have been many vocal supporters of Dreamers, President Trump said in a tweet that the program is “probably dead.” This, as the DOJ announced plans Tuesday to appeal a federal judge's decision to keep the program in place for the time being.

INSIDE OUT. Several months ago, when outrage at Equifax for its handling of a massive breach reached a fever pitch, I spoke with a number of attorneys about what the company's chief legal officer, John Kelley, might have done differently to change the narrative. A lot of the focus at the time was on the fact that Kelley approved executive stock sales in the days after the company learned of the security incident. What I heard from lawyers was that implementing what's called a Rule 10b5-1 plan could have been useful for Equifax execs.

Fast forward— and I'm again discussing these same plans with respect to Intel CEO Brian Krzanich.

So, a question for you, readers.

➤ To use, or not to use? Rule 10b5-1 plans allow execs who often have material non-public information to arrange for the sale of a predetermined number of shares on a prearranged date. They can provide an affirmative defense to insider trading accusations.

“If the choice is between selling with a plan and selling without a plan, if I were the executive officer I would want the protection,” Joseph Hall, partner at Davis Polk & Wardwell and head of the firm's corporate governance practice, told me recently. “And if I were the company, I would want the executive officer to have that protection.”

Yet, some companies don't require them. Equifax, for one, doesn't. I'm curious to hear from readers— why not use these plans?

“I love that challenge that my job brings and I appreciate the diverse group of people that I get to work with…I also appreciate the platform that my role has lent me and the opportunity to affect positive change.”

- HP Inc. chief legal officer Kim Rivera, who spoke with Corporate Counsel about what's on her mind and what her priorities are. Rivera was profiled along with a number of other Transformative Leadership honorees for 2017.

UBER, SALLE YOO AND THE ONGOING LIST. Uber's former top lawyer, Salle Yoo, has been connected to a number of questionable practices at the company, including the ride-hailing giant's use of the “Greyball” program and the firing of two lawyers who expressed concerns about data-retention policies. Last week was no different, with Bloomberg Businessweek reporting that Uber used a tool to stand in the way of government investigations, and Yoo knew about it. Here's what we know:

➤ The tool, called “Ripley,” was a “closely guarded secret,” three people with knowledge of the program told Bloomberg. It allowed the company to remotely lock, shut off and change passwords on company devices in order to make it nearly impossible to access information in the event of a police raid.

➤ Ripley was reportedly used at least two dozen times and as recently as late 2016. It was developed in coordination with Uber's security and legal departments.

➤ While Yoo was general counsel, she directed her staff to install an encryption service and log off computers after 60 seconds of inactivity, according to Bloomberg. She also proposed an app to counter raids.

Question of the week –

Each week, we're going to top practitioners to answer your questions. If you have a pressing question, send it my way.

This week's question:

In 2018, public companies will be required to include pay ratio disclosures in proxy statements. What do I need to know?

The pay ratio disclosure rule, which is contained in Item 402 (u) of Regulation S-K, requires public companies to disclose:

• The median of the annual total compensation of all employees other than the chief executive officer;
• The annual total compensation of the chief executive officer; and
• The ratio of these amounts.

➤ For the purposes of pay ratio disclosure, “employee” means an individual employed by the company or its consolidated subsidiaries as of a date within the last three months of the company's last completed fiscal year. This term includes full time, part-time, seasonal and temporary workers. However, under the pay ratio rule “employee” does not include any worker employed by, and whose compensation is determined by, an unaffiliated third party, such as an independent contractor or leased worker.

Generally, employees must be included when determining the pay ratio, regardless of whether they are based in the United States or outside the United States.

➤ Identifying the median employee is a key step in pay ratio disclosure. A company may select any date during the last three months of the fiscal year for the purpose of identifying its median employee. The rule gives companies flexibility to select a method for identifying a median employee that is appropriate to the size and structure of their businesses and compensation programs by allowing them to identify the median employee based on any consistently applied compensation measure. Companies may identify the median employee based on total compensation regarding their full employee population or they may use a statistical sample or another reasonable method.

➤ Once the median employee has been identified, the total compensation for the median employee will have to be calculated for the last completed fiscal year, consistent with the requirements for calculating the chief executive officer's total compensation for the same fiscal year for the summary compensation table.

Emerging growth companies, smaller reporting companies, foreign private issuers, MJDS filers (meaning companies using the Multijurisdictional Disclosure System) and registered investment companies are exempt from the pay ratio disclosure rule.

The pay ratio disclosure rule contains many specific requirements for determining pay ratio disclosure so Item 402(u) of Regulation S-K should be reviewed carefully, especially when preparing the required pay ratio disclosure for the first time this proxy season. In addition, the Securities and Exchange Commission has issued a number of compliance and disclosure interpretations and other guidance to which companies should refer when calculating their pay ratio.

- Laura Richman, counsel at Mayer Brown, who has a focus on corporate governance issues and public disclosure obligations. (Edited for clarity and length.)

Don't miss –

Thursday, January 25. Next week, counsel from Citigroup and JPMorgan Chase will join others to discuss the legal challenges faced by complex financial institutions. The event, hosted by the New York City Bar Association, will also look at the difficulties associated with implementing and maintaining compliance programs.

January 29 – February 1. In case you haven't heard, ALM's Legalweek will be upon us in less than two weeks. If you're in New York City, stop by to hear panelists from the likes of Wells Fargo and Goldman Sachs talk about how tech is impacting their businesses and discuss regulatory and business trends.

Tuesday, February 6. Many, if not all, in-house counsel in global companies have the GDPR on their minds. Are they actually ready, though? An upcoming webinar will go through the steps to take to ensure compliance. Attorneys from Winston & Strawn and firm Gardere Wynne Sewell are slated to discuss this and more. Also scheduled to speak: Intel group counsel for IT, privacy and security Dan Christensen. Register here.

On the move –

No more cheesecake. After nearly two decades, Cheesecake Factory GC Debby Zurzolo plans to retire in April. According to a SEC filing from the company, she will be available as a consultant to the company to ensure a smooth transition.

Musical chairs. Capital One Financial has found a new GC in Matthew Cooper, who replaces John Finneran. Though Cooper will not take on the role until Feb. 1, he's no stranger to the company's legal department, as he's been the chief counsel and functional head of the legal department for the past two years. Finneran, meanwhile, will temporarily move into the chief risk officer spot before ultimately becoming a senior adviser to the company's CEO.

Things with four wheels. Former GM attorney Lucy Clark Dougherty has found a new home as GC at off-road vehicle company Polaris. She will join the company at the end of this month. Clark Dougherty, who held high-ranking positions in GM's legal department during the company's ignition switch scandal, was among those who faced criticism for the way the legal team dealt with the issue.

Starz aligned. There's a spotlight on Audrey Lee, who has been named general counsel of Starz, replacing chief legal officer David Weil, who has been with the company since 2014. Lee comes to the Starz legal team from parent company Lions Gate and has also worked at Sony Entertainment.

From the CFPB. The Consumer Protection Bureau's Shiri Wolf has left the agency for a startup on the rise. Wolf, who was most recently senior counsel for the Office of Regulations at the CFPB, has landed at Petal, a credit card company that just announced it raised $13 million from Peter Thiel's Valar Ventures.