Episode 54 Show Me the Money

Has Tian Tian and Yang Guang will spend 10 years there were as you

This is a weekly guide to who is making the cash, how they're doing

it and what it means for the way we work. With this chances are you

shop all work in one of his buildings but don't even know it,

the boss of British Land. Helen Pattinson got a sweet tooth for

business after travelling to South America. She runs a chocolate maker.

And Deborah Hargreaves spent the past year licking at pay levels in

the boardroom as chair of the High Pay Commission. -- looking at. We

find that what she thinks of the government announcement limiting

pay rises. Some say it is a reflection on the value of the

company, others the big increase in executive pay is morally wrong. Two

extremes of an ongoing argument, but today the government has said

it will get tough on what it calls unjustified and irresponsible pay,

and this is the reward in the private sector. The idea is to come

up with a set of proposals by early next year, and they are likely to

include widening the membership of remuneration committees, and they

are the people who set corporate pay to include workers and make

shareholders more involved in the process. Let's go to Deborah

Hargreaves. Chair of the High Pay Commission. They have got

incredibly complicated, you can get six or seven elements, building up

to a package worth millions. We have said they should be simplified,

get back to basics, a base salary and one performance-related element,

get away from all this reward for failure, payments which are made

when companies are making big losses and not doing well, and also

open up the remuneration committees to a worker representative, make

that look at pay across the country -- company and take that into

consideration. You mentioned performance. We also heard from the

body which represents business, the CBI, saying there should be more of

a link between performance and pay. But the problem is how do you

decide what the performance is, because we could see a company make

losses, but then the chief executive still get a massive bonus

because he has met his target in some other type of performance area.

The East targets are too easy to make. Mostly you see an executive

will get a base salary and an annual bonus. That bonus has also

become part of salary because of target payout in 95% of times last

year, for example. You have got to make the targets more challenging.

I personally don't think that performance related pay really

works in a modern economy with a knowledge company, the sort of

companies we have. I think you have got to break that link. We know

shareholders are very keen on it. We think the target should be made

much more challenging, he shouldn't be able to pay out to big bonuses

when the company is posting a loss, or you should be able to claw it

back in some way, the way that Lloyds Bank is trying to do for it

for me chief-executive. We have a chief executive with this in the

room, Chris from British Land, do you think the pay system is fair?

It is a complicated subject, nobody will find any of this stuff that

easy. From my perspective a star from a position which is to run the

country, then simply a set my pay. In that sense, it is taken out of

my hands and that is the right way to do it. It is a topic that will

get more and more complicated in times as we're going to see. There

is an argument from business you will lose the talent if you reduce

the pay, because they will go to another company, is that fair? Is

made the big motivator 40 executives? My experience is that

different chief-executive get motivated by different things.

Money is sometimes important to some people. If it important to

you? It is one factor, but it is a factor. A lot of companies that

operate today in the UK are international. If we really try and

set up rules in place that did look sensible internationally, we will

find people to migrate outside the UK. Is that a fair argument Chris

makes? It is a bit of a myth companies are looking at recruiting

from an international talent pool. You don't see executives moving

overseas very often to go to other companies, and we don't see a huge

movement of top people. Also, this is a debate going on around the

world. It is not just happening in the UK. It is going on in other

countries. People are getting, in terms of austerity, people are

getting very upset. I will bring you into this. Obviously a very

different sized business, you run a chocolate firm, it would just laugh

be happy if you took, give yourself a massive pay rise when they were

were not getting one? They would find it hard to take, absolutely.

It is really interesting to hear the proposal is to put workers on

remuneration committees. We are far from a leak of having a

remuneration committee. To have workers involved in at least

influencing their level of the high executives pay is a really

interesting perspective. I think it helps to bring workers and

employees and help them feel a bit more engaged, probably, that would

certainly be the aim and that is always our aim. We only have a key

staff. Even that level of business, it is hard to help everybody feel

involved. He tummy naked change? We are talking about international

companies -- can we make a change. You need somebody to make the first

move. I think we have had some two executives admitting the system is

unsustainable. You have seen business that Vince Cable had a

renumeration consultation, and the business groups their reply to that

were talking about simplifying paid, getting more of a conversation

going with the work force, CDC these debates going on within

companies and I do think it would be nice to see somebody make a

stand, maybe somebody to move first. Looking over at Chris they're

sitting nervously on his own. Chris over there. One of the things

we see, there is huge variation. Plenty of companies where people

are not being paid bits -- the crisis. The danger is the

generality. It is time for a boom or bust, are quick flick through

some of the stories you tried hard to miss. This is the world's

longest cake at just over 1,000 metres, three and a half 1,000 feet.

It was created in Shanghai by 150 chefs working around the clock for

three days. If you are thinking of having a go at recreating it for

your Christmas party you will need 900 eggs, one tonne of flour, 600

litres of cream, and a very large oven.

The French IT firm atolls says it was to become an e-mail free

company to help staff cope with information overload. The company

were doubts staff spend between five hours and 20 hours each week

handling e-mails but his 10% of the 200 messages they receive on

average each day it is useful. In case you missed it earlier today,

there was pandemonium as Sweetie and Sunshine arrived in Scotland

heading to their new home at Edinburgh Zoo, the first new

panders to live in the new K for nearly two decades. Embassy is

paying China �6 million over the next 10 years to allow them to be

here. The new pandas. It is about making

links with China, as well, isn't it? We keep talking about how

important she -- China is for business. Do you think that is

something this might help? habit does. We need all the growth

we can get. I think we could appeal to Chinese tourists coming ever to

see a bit of British heritage. Maybe it is good to have better

links, we all need to start learning Chinese, that is for sure.

I'm sure these pandas will give a huge boost to business at embassy,

I for one will be going to see them. And Helen as well. Absolutely.

almost sure I will be on my way to Edinburgh.

This Chinese argument about growth, this idea of us trying to grow

outside of the eurozone area where there is such a crisis, obviously

not keep with you as being British Land, very much entered here, but

how important is it for big businesses to be looking to export

outside of the eurozone. For many businesses it will be a business of

how they can grow quicker, that will come in emerging markets.

There are whole bunch of companies which have grown quickly stop we

mustn't forget the fact eurozone is a very big trading partner. What

goes on there will have a big impact and there is no way of

dodging that. We saw the story about the firm that wants to ban

emails. What do you think of this? I have my days were nothing that

would be a brilliant idea. For us it can be great, particularly we

have people travelling all around UK every day of the week and it is

great they can stay in contact, we can get very quick information

around the organisation. You get a lot of waste? Of course we do.

Trying to balance that is really tricky. There is no right answer.

If we can balance it that is a good thing. You are probably very busy

as well, do you ever think you could function without them?

don't think I could function without my phone or my e-mails. It

has become a way of life for us. It has become restrictive, and it

definitely can stifle creativity in the business probably because

people are so drawn to their computers, but I cannot see a way

forward without it, really. sounds mad. Could you off place

function? As a journalist you get so many e-mails that you find you

can't miss them easily, even important ones. A lot of my

colleagues who are still working on national newspapers, if you e-mail

them be hardly know you have sent it, you have got to phone them up

and remind them because they are inundated. It has lost its purpose.

Finally, that story about the Christmas cake. It is about

companies wanting to try and make a bit of extra money at this time of

year, how important as Christmas for you? Very important. Certainly

in our own stores, it's extremely important. The six weeks before

Christmas are our huge peak closely followed by an Easter peak, but

without it we wouldn't make any profit. Obviously we have to make

profit to carry on trading. business like yours isn't seasonal,

but other times of years when you're trying to cash in a bit

more? Two-thirds above business is retail so effectively the Christmas

period is incredibly important to our customers, so this year again

it will be a big worry as to how Christmas trading goes. A lot of

retailers have that on her mind right now. Coming into the retail

side of this, we are hearing a lot from different companies, they are

taking hits on a profit margins to get the sales. We are hearing more

about companies such as Philip Green saying he will focus less on

the High Street, and more in prime locations. Is that what you are

seeing with your retail outlets as well, a lot more about these out-

of-town shopping centres? We are in a good position because

disproportion -- -- disproportionately our shopping

centres are very high quality. We benefit. What we believe is going

on across the country is polarisation. If you're in the

right space and have the right products you will do well. It is

tough for everybody. In terms of the retailers it is shifting to

where people want to be, to shop, experience and convenience are

aspects. You are going to go ahead with

building a new shopping-centre, �64 million shopping-centre in South

Hampshire. And you have agreed to do this because you have now got

50% of your tenants who have signed up. 50% didn't sound like a lot.

Because of the location, the quality we are going to create, we

are confident that other 50% off the lead in the time it takes us to

build it. It will be completed by 2030. That is right. Will we have

the consumer confidence by then The truth is that shops are still

trying to get to the best space and the right space. We think that will

happen. In other areas, many town centres for example, people are

really struggling and so they are moving away from those towns

centres so that has problems socially and other terms. Rent is

one of the biggest problems for retailers. We have days when some

companies really struggled to pay their rents and they end up going

bust. How flexible are you being? Are you getting customers saying

they want a discount? They will all ask. We have been pretty flexible.

That has helped a lot of companies in terms of cashflow. Working with

companies in real difficulties, we tried to find other ways. When you

say try and find other ways, will you take the money off if they are

saying it is make-or-break and they do puppy dog eyes? Not many people

try the puppy dog eyes with me, I cannot imagine why! It would be

specific to each situation. The flipside to us is if we make a

concession like that, we get other people saying I am running a good

business, it has a fair you help the guys were not doing so well. It

is always a balance. To you do not want empty shops because you still

have to pay the business rates, we have seen some big companies like

carriers who are paying just a pound for their rent in some places,

just purely so the landlord has the business rates that so they do not

have to pay. Is that something you are having to do? We are about 99 %

and very little short-term rent so we are in a good position. Latest

tough out there. I will bring Helen in on this because you have a high

street element to your business as well, you have five per shops. Do

you find rent difficult? Yes, rent is undoubtedly difficult. The rent

quarters are always tricky from a cash flow perspective. We are

fortunate that we have a few peaks with Valentine's Day and other

gifting seasons whereas other retailers are very reliant on the

December trade and have to rely on that cash for the rest of the year.

In 2008 we did negotiate with our landlords, as many of them as we

could, we took advantage of the situation and that has definitely

helped with cashflow. Is your landlord helpful with that? Some of

them more helpful than others. Chris was not one of them are!

did have to close two shops, why was that? The foot fall was not

there. They never really pulled their weight and we closed them

just after Lehman Brothers went down. It was right at the beginning

of the crash when we thought, we cannot afford to be dragging a

couple of shops which are not pulling their weight. You heard

Chris saying how it is about prime location more now and the out-of-

town shopping centres, for a company like yours it would be very

expensive to get into one of those. Do you worry that you are getting

towards that and you'll end up with your shops without as many people

and more and two shops around you? We do not worry particularly now.

am not trying to scare you! five shops we have our own

excellent positions and in Nice pedestrian High Streets mostly.

Chichester and Winchester, for example, they do not have shopping

centres particularly. The High Street, open-air shopping

environment, is something which people go for. That is why they go

there. And that suits us as an independent sort of artisan

retailer. It suits the style of business that we are. A shopping

centre for us is perhaps a little too clinical. We do not have 100

stores. If no one wants to go to the high street because three shops

around you are empty. Fortunately, the towns that we are in are pretty

well let. There are very few empty shops which is surprising at the

moment. We will come onto the eurozone crisis now because it is

crunch time for the eurozone, a phrase we have heard a lot over the

last few weeks. This time we are being told it is different. A

series of meetings over the next few days may make a difference over

the survival of the euro and it could have big consequences for

Britain and the rest of the eurozone as well. Chris, you have

warned in the past of the consequences of a eurozone fall-out.

What you think is the biggest thing we have to worry about? It is such

a big trading partner for Rosso any bad event in Europe will be felt

for us here. We are already starting to see that in terms of

economic activity being slower in the UK. It makes so much sense to

sort this problem out from the Europeans' perspective as well as

ours. You have to be optimistic that it will happen. It is a long

and slow and scarily different -- difficult process. What would it

mean if things got worse there and more companies went into recession?

We are a UK business and at the end of the day, our business will do

better if the economy does well and it will do worse if the economy

does badly. We have the same interests and concerns of everybody

else about it not getting sorted out and not sorted out as quickly

as possible. Deborah, we are talking a lot about trying to cut

down our debt but equally, we want to have growth as well. Do you

think it is possible to have the two, cut down debt and grow? What

worries me is where is the growth going to come from? We need to

promote growth. We need to get people back into work. We need to

do something to stimulate growth and I cannot see that happening. I

think maybe you have to hold off paying down the debt and try and

stimulate growth and grow out of the crisis. That may not be

possible. I think we may need some more creative thinking and some

debt write-down, some debt amnesty that has happened in the past and

maybe we need to go there again. Does it worry you because you do

not have a business in Europe but equally, there is always that

indirect effect that Chris was talking about. It has hit consumer

confidence here in a way? Yes, of course, it has to worry us. We are

a consumer good. People buy us because they see us on the Waitrose

shelf and they put it in their trolley. Anything that affects the

eurozone will affect our business. Any further squeezes on consumer

spending are bound to affect us. What do we need to kick-start it? I

know that is the million dollar question, the million Euros

question, I should say! Briefly, if you were given the power to be

labelled solve this, how would you solve it? I would solve it with

closer fiscal union in core Europe and I think there is little other

way to do that. I think that is what will end up happening because

that is the only way that you can run a European economy with one

currency. Thank you for your thoughts.

December is here. For some, it is the best time to make money out of

whatever spending you do but how do you make a once a year business

This is what a quarter of a million Christmas plants look like. Or

poinsettias to give them their proper name. This lot are being

plucked, preened and potted before being boxed up to hit shelves on

Monday morning. I am in East Sussex at a nursery in eight acres of

poinsettias. Dave Lloyd is the nursery manager. It is an

incredibly intensive way to run a nursery. It is an intensive product.

What we are trying to do is maximise the usage of our space so

the maximum number of plants per square metre, to maximise the

number of plants we get in our class structures. Demand for the

product is very seasonal so what are you doing for the rest of the

year? It is a very seasonal product. This lot will be out of the door

shortly. The rest of the year we grow up our main products which are

flowers for DIY stores. Getting the seasonal forecasting right is vital.

From what needs to be ordered Wem, to the number of extra temporary

staff to be taken on. Royal Mail has hired an extra

18,000 staff in anticipation of this year's Christmas mail bag.

There have also opened a dedicated packet network to cope with the

sheer volume of presence now bought online. The mad - to stock up for

Christmas means supermarkets also need extra hands. In fact, the

ranks of one in three employers will swell over the period. Great

news for jobseeker's but an enormous extra cost for businesses.

The margin for error when it comes to plants is quite small. How can

you make sure you have got the right plant to market at the right

time? We have historical data from year to year and we also have

product launches and we get forecasts from our customers so we

have a clear idea of the customer demand and what we will have for

future seasons. That allows us to accurately predict what we will

grow and minimise our wastage. Rising costs for businesses means

it is more important than ever to turn quiet months into profitable

ones. This crop is a cash crop. It is not a product we would grow all

a look round. It is seasonal. It is utilising the space when we would