Directors in the U.S. are making still more money, faster, with pay up about 6% in 2013, double the prior year’s increase, according to an analysis by the consulting firmTowers Watson . Yet cash compensation has been stagnant. Driving the increase is equity compensation, which is up 4% overall and at least 10% in certain industries, such as consumer staples, the study notes.

U.S. directors aren’t only earning more than they used to, they continue to earn differently than directors elsewhere. There’s a strong contrast, for example, with director pay practices mandated by the new U.K. Corporate Governance Code. “The major difference in design is that most U.S. companies deliver compensation to directors using both cash and restricted shares. In the U.K., the majority of companies deliver compensation only in cash,” said Todd Lippincott, leader of Towers Watson’s executive compensation practice in the Americas. The minority of U.K. companies that use stock still weight compensation about 75% cash and only 25% equity; in the U.S., the average is only 44% cash and 56% stock. “The differences are significant and reflect a different orientation about what constitutes appropriate rewards for directors,” said Mr. Lippincott, explaining that the heavy role of equity in director pay in the U.S. “reflects an intent to align directors with shareholders.”

He notes that while most U.S. companies don’t emphasize performance-linked pay for directors, about 10% do use options and “a small handful” include performance conditions in equity awards. By contrast, the new U.K. Code mandates that “remuneration for non-executive directors should not include share options or other performance-related elements” and sees options as a risk to a non-executive director’s independence. So although the U.K. Code defines “reporting to shareholders on their stewardship” as a responsibility of directors, it doesn’t require them to eat the same cooking as the shareholders they serve.

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EXCLUSIVE ON RISK & COMPLIANCE JOURNAL

U.S. targets terrorist sanctions. The U.S. Treasury Department said Wednesday it named 11 people and an entity as terrorists under U.S. sanctions for their roles working with terrorist organizations such as the Islamic State, Nusra Front and others. The sanctions designations complement a United Nations Security Council resolution adopted Wednesday that focused on preventing and disrupting the financial activities of foreign terrorists, and thwarting their efforts to travel across borders, Treasury said.

COMPLIANCE

BHP close to resolving bribery probes. BHP Billiton Ltd. said it may be close to resolving a U.S.-led investigation into possible violations of anticorruption laws, the WSJ reports. After receiving requests for information from the U.S. Securities and Exchange Commission in August 2009, the company conducted an internal investigation that found evidence of possible violations of anticorruption laws involving interactions with government officials. BHP said the investigation related primarily to previously-terminated exploration and development projects and “hospitality” provided as part of its sponsorship of the 2008 Olympics in Beijing. The Australian Federal Police have also been investigating the matter. “The group continues to fully cooperate with the relevant authorities,” BHP said in its report.

China finds over $10 billion in fraudulent trade-financing. Chinese officials have found nearly $10 billion in fraudulent trade-financing deals this year after expanding a probe into industry practices, a senior Chinese foreign-exchange official said Thursday, the WSJ reports. The comments by Wu Ruilin, deputy director of the supervision and inspection department at China’s State Administration of Foreign Exchange, mark the most extensive comments yet on problems in trade financing in China since a scandal involving missing copper supplies in the port city of Qingdao put the practice under international focus.

U.K. plans to criminalize benchmark fixing. The U.K. government plans to criminalize the manipulation of seven more benchmarks in markets from foreign exchange to gold and oil as it tries to revive confidence in the integrity of London as a financial center, Bloomberg reports. The Treasury started a review into whether it should extend legislation regulating the London Interbank Offered Rate to cover other key rates including the WM/Reuters 4 p.m. London currency fix, the Sterling Overnight Index Average, the London gold fixing and the ISDAFix, according to a statement.

RBS chairman to take role at Glaxo. GlaxoSmithKline PLC is set to name Philip Hampton as its next chairman, according to people familiar with the matter–a move that while widely expected comes as the pharmaceuticals giant struggles to right itself amid a series of probes over alleged overseas bribery, the WSJ reports. Mr. Hampton, currently chairman of Royal Bank of Scotland Group PLC, will succeed longtime Glaxo Chairman Christopher Gent. The transition isn’t likely to take place until next year. Mr. Gent had previously been slated to step down by the end of next year.

Tech companies resisting regulation of wearables. Major technology companies are furiously lobbying Capitol Hill against regulation of “wearables,” or devices such as those that measure a person’s vital health signs, Politico reports. But some regulators and lawmakers believe that at least some of them should be regulated like other medical devices because of the sensitive data they store.

Non-startups take advantage of JOBS Act. federal lawmakers eased decades-old U.S. securities regulations in 2012 in the name of eliminating red tape for young startups but now another breed of business is angling to take advantage of the Jumpstart Our Business Startups Act: publicly traded companies, some of which have been in business for many years, the WSJ reports. The companies are seeking new investors using a portion of the JOBS Act that lets small private firms advertise to wealthy individuals, known as “accredited investors,” modifying an 80-year-old “general solicitation” advertising ban designed to protect investors.

Uber willing to talk with European regulators. A senior executive of ride-sharing service Uber Technologies Inc. said the company is willing to consider discussing regulation of its services in Europe—offering an olive branch amid heightened scrutiny and outright bans in several places on the continent, the WSJ reports. Niall Wass, Uber’s senior vice president for Europe, Middle East, Africa and Asia Pacific, said the company could operate under certain regulatory constraints in Europe. He cited the state of California as an example of where regulation hasn’t hurt consumer appetite for ride-sharing services.

Former HK bureaucrat alleges bribe. A former top Hong Kong civil servant told a court on Tuesday that he had received a secret payment of HK$11 million ($1.4 million) “from Beijing” in 2007 through a businessman intermediary, local media reported, according to Reuters. Hong Kong’s former chief secretary, Rafael Hui, was testifying in one of the financial hub’s largest corruption trials, charged with accepting “concealed and disguised” payments from property tycoons Thomas and Raymond Kwok, the billionaire co-chairmen of Asia’s largest developer, Sun Hung Kai PropertiesLtd, seeking government favor.

Ex-China planner admits taking bribes. A former economic planner appealed in court for freer markets in China as he admitted on Wednesday that he took millions of dollars in bribes to approve projects. The trial of Liu Tienan is one of the highest-level prosecutions of a Communist Party official since China’s corruption crackdown began 18 months ago. Prosecutors alleged that Mr. Liu, the former head of the National Energy Administration and senior director in the National Development Reform Commission, had through his family accepted bribes while approving projects.

REPUTATION

Apple pulls new software after glitches. Apple Inc. is confronting a botched software update and consumer complaints that its flagship phone can be bent out of shape, just one week after launching its new iPhones, the WSJ reports. In a rare move Wednesday, the Cupertino, Calif., electronics maker yanked an update to its latest iPhone, iPad and iPod software hours after making it available. Some owners complained the software had disrupted their phone’s ability to make calls and disabled the TouchID fingerprint sensor used to unlock devices.

Japan says Dreamliner battery may have needed more tests. Japan’s transport authority said on Thursday a lack of appropriate testing may have contributed to a lithium-ion battery overheating on board a Boeing 787 Dreamliner owned by ANA Holdings, which led to the grounding of the Dreamliner fleet globally for more than three months, Reuters reports.

DATA SECURITY

Home Depot was hit with new malware. Federal security agencies warned retailers Wednesday that a previously unseen malicious software program they are calling Mozart was used in the attack on Home Depot earlier this year, people familiar with the matter told the WSJ. The warnings came in a report by the Department of Homeland Security that drew on findings gathered by the Secret Service, which is investigating the breach, the people said. The software appeared to be customized for the home improvement retailer’s systems. While it was designed to steal credit card numbers and accomplish the same goals as computer code deployed in other giant breaches, at each turn it carried out its mission in slightly different ways to evade security gear, one of the people said.

Security experts warn about “Bash” malware. A newly discovered security bug in a widely used piece of Linux software, known as “Bash,” could pose a bigger threat to computer users than the “Heartbleed” bug that surfaced in April, cyber experts warned on Wednesday, Reuters reports.

GOVERNANCE

HK governance bests Singapore. Corporate governance in Singapore deteriorated in the past two years amid slowing reforms on the subject, dipping below the perceived strength of Hong Kong for the first time since 2007, according to a survey, Bloomberg reports. Hong Kong scored the highest in Asia Pacific this year with 65, followed by Singapore’s 64, though both were tied for first in the rankings because of the minimal difference in the results, according to a joint report by CLSA Ltd. and the Asian Corporate Governance Association. Japan passed Thailand for third, while the Philippines and Indonesia ranked last.

OPERATIONS

Manila port clogged by rising traffic. At the Port of Manila, trucks sit in long lines to add their freight to towering stacks of containers on the docks, while ships crowd Manila Bay, waiting for a chance to unload cargo. The sight is common and poses a significant challenge for the Philippine government: easing congestion at this port that handles the bulk of the archipelago nation’s imports and exports, the WSJ reports. Nearly 900,000 cargo containers moved through the Port of Manila in the first quarter of 2014 as activity at the port increased 6.3% from a year earlier. The growing strain on the port comes as the Philippines’ trade with the rest of the world increases.

Source: http://blogs.wsj.com