Browse content similar to 29/04/2016. Check below for episodes and series from the same categories and more!
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Now for the latest financial news with Aaron Heslehurst and | :00:15. | :00:17. | |
Is this man worth 12 million dollars a year? | :00:18. | :00:20. | |
The boss of drugs giant Astrazeneca set to become the latest target | :00:21. | :00:23. | |
Plus - paying homage to the Sage of Omaha. | :00:24. | :00:36. | |
Warren Buffett gathers his investors once again for their annual meeting. | :00:37. | :00:39. | |
But who is going to take over when he finally bows out? | :00:40. | :00:48. | |
It is Friday. We have that Friday feeling and we are going to give you | :00:49. | :00:59. | |
a fascinating snapshot of everything in the world of business and money. | :01:00. | :01:02. | |
Also in the programme: The boom times are over | :01:03. | :01:04. | |
Our Asia team will have that story for you shortly. | :01:05. | :01:09. | |
We are talking big bucks this Friday, | :01:10. | :01:12. | |
specifically the controversial issue of executive pay. | :01:13. | :01:13. | |
Are top bosses worth the money they earn? | :01:14. | :01:16. | |
It's a question many shareholders are asking, as many of the UK's | :01:17. | :01:18. | |
biggest companies hold their annual shareholder meetings. | :01:19. | :01:25. | |
More and more, the answer seems to be no. | :01:26. | :01:27. | |
Earlier this month, BP shareholders revolted over a big | :01:28. | :01:33. | |
pay rise for the boss Bob Dudley, awarding him $20 million despite | :01:34. | :01:36. | |
Almost 60% of shareholders voted against it. | :01:37. | :01:43. | |
Just a week later, Anglo American shareholders also revolted. | :01:44. | :01:51. | |
CEO Mark Cutifani was in line for a $5 million pay-out, despite | :01:52. | :01:54. | |
Anglo being the worst-performing company on the FTSE 100 last year. | :01:55. | :01:57. | |
Today, it's the boss of drug company AstraZeneca, Pascal Soriot, | :01:58. | :02:04. | |
They're expected to cry foul over the $12 million pay-out | :02:05. | :02:15. | |
Mr Soriot rejected a takeover bid from Pfizer two years | :02:16. | :02:23. | |
ago, which valued their shares at $22 more than they're worth now. | :02:24. | :02:32. | |
All of these deals pale into insignificance when you look | :02:33. | :02:35. | |
at what Britain's best paid boss is due to earn this year. | :02:36. | :02:45. | |
Sir Martin Sorrell of the world's biggest advertising | :02:46. | :02:47. | |
company WPP is due for a $100 million pay package - most of it in | :02:48. | :02:50. | |
The shareholder lobby group PIRC has already called the deal "excessive," | :02:51. | :02:59. | |
and he could face a rocky ride at the company's AGM on June nine. | :03:00. | :03:02. | |
I spoke to him yesterday and he was adamant he's worth the money. | :03:03. | :03:17. | |
I am proud of the fact that we have come from nothing to being a world | :03:18. | :03:25. | |
leader, 50% bigger than anyone else in the industry. The next biggest | :03:26. | :03:30. | |
market cap is $20 billion, an American company based here. Are you | :03:31. | :03:35. | |
worth $100 million? Do you think shareholders agree with you? What I | :03:36. | :03:41. | |
have been doing is, over 31 years, investing in the company, never | :03:42. | :03:46. | |
selling shares in the company. So, for example, what you refer to this | :03:47. | :03:51. | |
year, the annual report is out tomorrow, it will confirm the | :03:52. | :03:55. | |
numbers that you are talking about, I have reinvested, I have kept | :03:56. | :03:59. | |
invested after tax all of the amount, so all of my wealth, such as | :04:00. | :04:04. | |
it is, is invested in this company. Joining me now is Peter Parry, | :04:05. | :04:07. | |
policy director at the Welcome to the programme and thank | :04:08. | :04:19. | |
you for coming in. We will talk about Martin Sorrell in a moment. I | :04:20. | :04:23. | |
know that you have some history. In 2012, we saw the shareholder | :04:24. | :04:31. | |
revolt, anger and theory at the annual general meetings. Is it back? | :04:32. | :04:37. | |
-- fury. I think it will keep coming back and I don't think we will see | :04:38. | :04:42. | |
it end until we take steps to fix executive pay and I think it is the | :04:43. | :04:46. | |
system which is the problem. They tried to fix it, at least putting in | :04:47. | :04:51. | |
the coalition government, Vince Cable, Business Secretary, tried to | :04:52. | :05:01. | |
implement awards, benefits, for performance, right? Absolutely, and | :05:02. | :05:04. | |
we have seen Greenbury and other reports and measures taken to ensure | :05:05. | :05:10. | |
people are rewarded for performance. The problem is, we have a system | :05:11. | :05:17. | |
here whereby I think it is not always clear what the targets are. | :05:18. | :05:22. | |
Shareholders don't know that. Don't they vote on it? The thing that is | :05:23. | :05:30. | |
somewhat... They are told to vote on the targets and if the CEO reaches | :05:31. | :05:37. | |
the targets, they are rewarded. How other shareholders...? There are two | :05:38. | :05:40. | |
issues. There is a vote on the policy. The policy says, we aim to | :05:41. | :05:45. | |
ensure we attract talent and retain it. Those measures we will use in | :05:46. | :05:50. | |
terms of performance measures, earnings per share, other things as | :05:51. | :05:56. | |
well. They are very broad and don't say what the specific targets will | :05:57. | :06:02. | |
be. What shareholders have a vote on is the implementation of that, which | :06:03. | :06:06. | |
is the pay the director has earned in that year. They only know that | :06:07. | :06:11. | |
retrospectively. They don't know it in advance. What I am seeing is, if | :06:12. | :06:17. | |
we will have effective governance, shareholders need to know specific | :06:18. | :06:24. | |
targets on which leaders are being bonus. There is a difference | :06:25. | :06:31. | |
comparing CEOs. Martin Sorrell says he built the company. 31 years, it | :06:32. | :06:36. | |
was a $1.5 million, now it is $30 billion. All the money he is paid | :06:37. | :06:42. | |
goes into the company. The CEO of BP, Bob Dudley, BT have the worst | :06:43. | :06:48. | |
year on record and... There are differences -- BP. Martin Sorrell's | :06:49. | :06:54. | |
pay comes up time after time, it back in 1995 we were talking | :06:55. | :06:59. | |
specifically about his pay, even at that time. It has a long pedigree. | :07:00. | :07:04. | |
The four in his argument is he might let you believe this hundred million | :07:05. | :07:09. | |
dollars, ?70 million, he is paid this year is a final pay-out for | :07:10. | :07:14. | |
years of achieving good results for this company -- fault. But actually | :07:15. | :07:18. | |
he has been paid large amounts of money every year and I think | :07:19. | :07:23. | |
shareholders are getting fed up and saying, come on, this bonus goes up | :07:24. | :07:29. | |
every year, this is too much, and if you ask anyone, I don't think anyone | :07:30. | :07:32. | |
is worth that amount of money. Indeed. I wish I have more time but | :07:33. | :07:37. | |
I don't. Thank you for your thoughts. We are going to talk about | :07:38. | :07:40. | |
Warren Buffett. Hey, we are also | :07:41. | :07:44. | |
in the US where tens of thousands of investors are flocking to Omaha, | :07:45. | :07:47. | |
Nebraska for the annual shareholder For half a century, throughout the | :07:48. | :07:57. | |
ups and downs of the stock market, there is one investor everyone has | :07:58. | :08:02. | |
followed and that is Warren Buffett. He is considered to be the best | :08:03. | :08:07. | |
stock pick up of all time, but his strategies appear to be quite | :08:08. | :08:10. | |
simple. He purchases stocks in goods we use everyday. His investment | :08:11. | :08:17. | |
empire includes close to 90 companies with many household names | :08:18. | :08:22. | |
like Walmart and Coca-Cola. Since he has started buying shares for Burki | :08:23. | :08:27. | |
Hathaway in the 1960s, the company has had an average annual growth of | :08:28. | :08:34. | |
over 19%, almost double the S 500 -- Berkshire. And its shares have | :08:35. | :08:38. | |
risen 2500% in the last quarter century alone. As shareholders of | :08:39. | :08:44. | |
Berkshire Hathaway Ghaffar, there is a concern that Warren Buffett is | :08:45. | :08:48. | |
getting old and his number two is even older, so who will be the | :08:49. | :08:55. | |
future of the company? -- gather. Given the unique nature and culture | :08:56. | :09:01. | |
at Burki -- Burke share Hathaway, I think it will emerge from within the | :09:02. | :09:06. | |
company but there could be an argument for breaking up Berkshire | :09:07. | :09:12. | |
Hathaway, opening up a list speculations -- Berkshire. On | :09:13. | :09:15. | |
Saturday tens of thousands shareholders gather to cheer another | :09:16. | :09:20. | |
year of Warren Buffett's unparalleled success, but one | :09:21. | :09:23. | |
difficult question on the minds of investors will be how much longer it | :09:24. | :09:33. | |
can continue. It is that time of the morning for a bit of Ali Moore in | :09:34. | :09:37. | |
Singapore, it is good to see you. The Chinese economy is slowing down | :09:38. | :09:41. | |
and that has an impact on companies like Baidu. Yes, you are right. It | :09:42. | :09:47. | |
has been quite a good quarter at first glance. We refer to it as the | :09:48. | :09:51. | |
Chinese version of Google with revenue up 24%. Earnings have fallen | :09:52. | :09:56. | |
19%. That revenue growth is the slowest in seven years. It has been | :09:57. | :10:00. | |
a long decline for Baidu with advertisers playing -- paying less | :10:01. | :10:08. | |
than they do for elsewhere. So, Baidu's been putting money into | :10:09. | :10:14. | |
diversifying away from this core business of search engine and also | :10:15. | :10:17. | |
the revenue it gets from search advertising. It is spending on | :10:18. | :10:21. | |
things like subsidies and discounts to try to get market share on what | :10:22. | :10:26. | |
it calls transaction services, which means connecting online customers to | :10:27. | :10:30. | |
bricks and mortar services like food delivery. Another great effort, it | :10:31. | :10:36. | |
is in the race to develop autonomous cars. Everybody's in that race. | :10:37. | :10:40. | |
Don't forget you can get in touch with me and some of | :10:41. | :10:43. | |
I will be back with James to look at some of the newspapers from around | :10:44. | :10:49. | |
the world, ta ta! School heads have attacked | :10:50. | :10:53. | |
the government's testing regime for primary pupils as chaotic | :10:54. | :10:55. | |
and distracting. The National Association of | :10:56. | :10:57. | |
Head Teachers, meeting for its annual conference in Birmingham, | :10:58. | :10:59. | |
says the current system ticks boxes for bureaucrats and politicians but | :11:00. | :11:02. | |
doesn't work for pupils or teachers. | :11:03. | :11:04. |