:00:00. > :00:00.This is Business Live from BBC News with Victoria Fritz
:00:07. > :00:14.Executive pay is in the spotlight again as the UK's second biggest
:00:15. > :00:15.drugmaker, AstraZeneca holds its AGM.
:00:16. > :00:19.But in the past few weeks have seen executives at oil majors,
:00:20. > :00:22.mining firms and media giants have have their pay deals rejected
:00:23. > :00:43.Live from London, that's our top story on Friday the 29th April.
:00:44. > :00:44.Are the big bosses getting paid to much?
:00:45. > :00:47.Can the advertising boss, Sir Martin Sorrell, justify his 100
:00:48. > :01:01.Judging from the mood - as the AGM season gets underway -
:01:02. > :01:03.Also in the programme...tens of thousands
:01:04. > :01:06.of fans are flocking to Omaha in Nebraska this weekend.
:01:07. > :01:09.Not for a festival or concert - but to the annual shareholder gig
:01:10. > :01:11.held by the legendary investor and money maker Warren Buffett.
:01:12. > :01:14.We'll have report on one of the world's savviest investors
:01:15. > :01:20.you the latest from the financial markets where Europe is already
:01:21. > :01:30.And we'll be getting the inside track on what the world's
:01:31. > :01:34.top central bankers have been up to, the state of the auto industry
:01:35. > :01:47.As always, we would love to hear from you. Just drop us a step --
:01:48. > :01:49.just drop us a line. We are talking big bucks this Friday
:01:50. > :02:00.- specifically the controversial Are top bosses worth
:02:01. > :02:08.the money they earn? biggest companies hold their annual
:02:09. > :02:13.shareholder meetings. More and more -
:02:14. > :02:18.the answer seems to be no. Earlier this month, BP shareholders
:02:19. > :02:23.revolted over a big pay rise for the boss Bob Dudley -
:02:24. > :02:26.awarding him $20 million despite record losses
:02:27. > :02:31.at the oil giant. Almost 60% of shareholders
:02:32. > :02:35.voted against it. Just a week later, Anglo American
:02:36. > :02:38.shareholders also revolted. The CEO was in line
:02:39. > :02:41.for a $5 million payout - despite Anglo being the worst
:02:42. > :02:46.performing company Today the boss of drug
:02:47. > :02:52.company AstraZeneca - They're expected to cry foul
:02:53. > :02:56.over the $12 million Mr Soriot rejected a takeover bid
:02:57. > :03:11.from Pfizer two years ago. All
:03:12. > :03:13.of these pale into insignificance Sir Martin Sorrell, of the world's
:03:14. > :03:22.biggest advertising company WPP - is due for a $100 million pay
:03:23. > :03:25.package - most of it in performance related share awards -
:03:26. > :03:52.he could face a rocky ride They'd have you with us. We have
:03:53. > :03:59.been about this 2012, we saw a shareholder spring. Is it that? It
:04:00. > :04:02.looks like it. Given the fact that companies have been doing less well
:04:03. > :04:08.in the financial markets, shareholders are up in Mark -- up in
:04:09. > :04:13.arms. In particular, given the new cable regulations coming in, giving
:04:14. > :04:19.shareholders a binding vote on executive pay, that has focused the
:04:20. > :04:23.spotlight on shareholders voting on executive compensation. I would say
:04:24. > :04:26.that basically, when it comes to that, shareholders need more
:04:27. > :04:35.alignment of compensation with performance. Can I ask you that? For
:04:36. > :04:41.our viewers around the world, you mentioned Vince Cable, the Business
:04:42. > :04:51.Secretary in 2012. He implemented some rules. Is there a difference?
:04:52. > :04:57.Between some of these CEOs? We cannot put them all into one basket.
:04:58. > :05:04.Martin Sorrell said that he spent 31 year building it, and he is backing
:05:05. > :05:11.the company. That is a different picture than Bob Darley who look
:05:12. > :05:19.over the -- looked over the biggest failure in the history. CEOs can be
:05:20. > :05:26.paid in terms of the value they add, or the what they would get
:05:27. > :05:29.elsewhere. So insect -- so executive compensation could be in between the
:05:30. > :05:34.two. It depends on market conditions. The market is looking
:05:35. > :05:40.less attractive, and so shareholders are being more exacting on executive
:05:41. > :05:46.compensation. That is why we are seeing more of a revolt on executive
:05:47. > :05:50.pay. It is interesting, because many of the major shareholders in
:05:51. > :05:55.companies are fun urgent -- managers. This poses some sort of
:05:56. > :06:02.conflict of interest when they are investing themselves, but act --
:06:03. > :06:09.particularly in financial institutions. I have done research
:06:10. > :06:14.in this area, and what I found is that when fund companies vote on
:06:15. > :06:18.other fund companies, they are more supportive of these companies than
:06:19. > :06:22.they are of other companies outside of the financial sector. This might
:06:23. > :06:28.be driven by social ties between these companies, so if I work for a
:06:29. > :06:34.financial company, company one, then I might be concerned that I want to
:06:35. > :06:38.get a job at company to, and so I am going to vote more favourably with
:06:39. > :06:45.them. Tit-for-tat voting can be important. If company one owns
:06:46. > :06:51.shares in company 2, they will be concerned that company 2 will vote
:06:52. > :07:00.against it. A complete conflict of interest. At the end the day, the
:07:01. > :07:03.financial crisis, and one of the reasons for the financial crisis, it
:07:04. > :07:06.is being blamed on the poor governance of financial companies a
:07:07. > :07:12.financial companies are the policeman of other financial
:07:13. > :07:20.companies, what will be expecting terrapin we had to leave it there.
:07:21. > :07:23.Shares of online retail giant Amazon have jumped in after hours trading -
:07:24. > :07:26.after it said sales rose 28 per cent in the first three
:07:27. > :07:34.months of the year - to more than 29 billion dollars.
:07:35. > :07:37.Profits hit $513 million - both were better than
:07:38. > :07:39.Amazon's been boosted by rising sales of its
:07:40. > :07:43.It's also seeing strong growth in customers for its Prime service,
:07:44. > :07:46.which includes free delivery and TV shows - as well as in its
:07:47. > :07:52.Comcast has confirmed its NBCUniversal unit will buy
:07:53. > :07:53.DreamWorks Animation for $3.8bn in cash.
:07:54. > :07:56.DreamWorks is the studio behind a string of animated hits films
:07:57. > :07:59.including Shrek and Kung Fu Panda - but has been losing
:08:00. > :08:02.The deal will put Comcast in direct competition with Disney.
:08:03. > :08:04.Dreamworks Animation shares surged 24 per cent on confirmation
:08:05. > :08:25.My teeth have not been in all morning!
:08:26. > :08:28.And the US car giant Ford has made record quarterly profits
:08:29. > :08:30.of $3.8 billion - on strong sales in Europe -
:08:31. > :08:32.and a revamped range of trucks in North America.
:08:33. > :08:37.Ford shares were boosted further - after the Chief executive
:08:38. > :08:39.Mark Fields confirmed Ford is working on an electric vehicle
:08:40. > :08:42.with a 200 mile range to match rivals from Tesla
:08:43. > :09:08.Are you going to help me with my teeth today? Not the scripts! Let's
:09:09. > :09:17.have a look at the website. I AG, the airline group, the parent group
:09:18. > :09:28.of British airways. A good first quarter. Pre-tax profits have jumped
:09:29. > :09:32.to 124 million euros. About $140 million. This compares to the same
:09:33. > :09:38.period a year ago, when they had an loss of 37 million euros.
:09:39. > :09:43.Interesting, the comment about trading remaining the same, despite
:09:44. > :09:45.attacks. They are keeping their eyes attacks. They are keeping their eyes
:09:46. > :09:50.on the rest of the competition. Italian luxury goods maker Gucci has
:09:51. > :09:53.sent warning letters to Hong Kong shops selling paper versions
:09:54. > :09:55.of its products as Paper replicas of items
:09:56. > :10:02.like mansions, cars, iPads and luxury bags are burnt
:10:03. > :10:05.in the belief that deceased relatives can use them
:10:06. > :10:06.in the afterlife. Juliana Liu is in Hong Kong and has
:10:07. > :10:18.more on the story. I understand this is all about
:10:19. > :10:22.keeping your relatives happy in the next life. Presumably, they are
:10:23. > :10:28.going to be buried happy with Gucci handbags? Absolutely, especially
:10:29. > :10:32.ones that were not able to afford these handbags when they were still
:10:33. > :10:37.alive. I went to visit some of the shops, and I can tell you that Gucci
:10:38. > :10:45.handbag and a pair of shoes costs just ?4 when they are made of paper!
:10:46. > :10:49.This comes from a long try knees traditions -- Chinese tradition of
:10:50. > :10:52.worshipping your ancestors. Their spirit remains somehow alive, and
:10:53. > :10:57.they are able to influence what happens in the land the living. If
:10:58. > :11:02.you want to avoid a run of bad luck, you have to keep your ancestors
:11:03. > :11:07.happy. In the past, that done by burning paper notes, so fake money,
:11:08. > :11:11.but these days, ancestors are much more demanding and they want iPads,
:11:12. > :11:20.they want mentioned, they want Gucci! This is what their
:11:21. > :11:21.descendants burn. Very demanding and since -- ancestors!
:11:22. > :11:33.Let's have a quick look at the markets. The Japanese yen is going
:11:34. > :11:37.strong. Let's have a look at the Nick Hayden. That is the second day
:11:38. > :11:44.that we have seen falls of 3%. This is how it is across Europe. Spain
:11:45. > :11:51.has defied expectations that GDP and economic growth would slow. Their
:11:52. > :11:54.economy expanded by 0.8%. That is despite the recent political drama
:11:55. > :12:02.there. Crossing over to the States. Let's hear from Michelle Fleury.
:12:03. > :12:10.Inflation will be an investors' minds. The PCE price index is
:12:11. > :12:18.released. It is expected to show prices rising below the Fed's target
:12:19. > :12:25.of 2% a year. One factor in that is the very low price of oil. Possibly
:12:26. > :12:30.good for consumers, but terrible for the big oil companies. The biggest
:12:31. > :12:37.in America, Exxon, is expected to report a drop in profits after the
:12:38. > :12:42.indignity of having it credit rating cut for the first time in 86 years.
:12:43. > :12:49.But it is still in better shape than Chevron, who is expected to report a
:12:50. > :12:51.loss for the fourth -- loss for the quarter.
:12:52. > :12:54.Joining us is Bronwyn Curtis, Chair, Society of Business Economists.
:12:55. > :13:11.You just got back from down under. It was sunny and warm! Let's talk
:13:12. > :13:17.about the markets. We have seen a lot of movement on the currency. The
:13:18. > :13:26.dollar is down, the Japanese in -- Japanese yet is up. It just seems
:13:27. > :13:31.that the markets and investors are all waiting for something, I am not
:13:32. > :13:35.sure what they are waiting for. It is the uneasy period. They are
:13:36. > :13:39.waiting for the Central banks, they are waiting for government, probably
:13:40. > :13:48.to do stimulus. When the Fed met this week, they talked about global
:13:49. > :13:51.risk, and moved it down, but we expected the central bank of Japan
:13:52. > :13:56.to do something and they did nothing. It is less risky than in
:13:57. > :14:01.January, when everyone was worried about China. The numbers from China
:14:02. > :14:05.are coming a bit better, but I am worried when we see big moves in
:14:06. > :14:09.currencies, because it usually means that something is going to happen.
:14:10. > :14:13.The worst big move is when the dollar goes up, and it is going down
:14:14. > :14:19.at the moment. We should seek slightly positive numbers, but it is
:14:20. > :14:23.the awful feeling that is it selling may and go away? So we have two or
:14:24. > :14:30.three weeks before we sell in May and go away into -- until September?
:14:31. > :14:34.Speaking of the dollar, you said it was coming down. The strong dollar
:14:35. > :14:38.has been a real problem for America recently. We did have some figures
:14:39. > :14:43.out from America when it came down to GDP in economic growth. They
:14:44. > :14:46.weren't great, but we also did hear from the Federal reserve, and they
:14:47. > :14:52.offer little is fairly bullish on the ballot for the American economy.
:14:53. > :15:00.I wonder how significant those numbers are going to be? I think
:15:01. > :15:04.everyone is watching those numbers, plus the GDP numbers, but the
:15:05. > :15:09.inflation numbers, as we talked about earlier, really important
:15:10. > :15:12.today, because we are seeing Germany back in deflation, we are seeing
:15:13. > :15:16.Japan with deflation. That is going to be the key. I am still looking, I
:15:17. > :15:23.still think there is a good chance that the federal reserve will hike
:15:24. > :15:26.rates in June. So your money is on June. Bronwen, you are going to take
:15:27. > :15:31.us through the papers. We will see very shortly.
:15:32. > :15:34.Legendary money Warren Buffett hold his annual gig in Omaha,
:15:35. > :15:36.Nebraska tomorrow - tens of thousands flock
:15:37. > :15:38.to the annual shareholder meeting of Berkshire Hathaway.
:15:39. > :15:41.We find out what the future holds for Mr Buffett and his company.
:15:42. > :15:48.You're with Business Live from BBC News.
:15:49. > :15:50.Part-nationalised Royal Bank of Scotland has reported a widening
:15:51. > :15:54.first quarter loss on Friday as lower income, restructuring costs
:15:55. > :15:56.and sluggish assetsales showed the scale of problems
:15:57. > :16:03.RBS reported a loss of ?968 million, up from ?459
:16:04. > :16:15.The losses were also driven by a one-off ?1.2 billion payment
:16:16. > :16:21.to end the British government's priority over dividends.
:16:22. > :16:24.Michael Hewson is Chief Market Analyst at CMC Markets Credit
:16:25. > :16:36.We are seeing some interesting numbers coming out of RBS. We are
:16:37. > :16:39.seeing losses more than double. ?238 million worth of restructuring
:16:40. > :16:42.costs. Is this a bank that is actually on track when it comes to
:16:43. > :16:49.restructuring and getting back into private hands or no? I think that is
:16:50. > :16:53.a very difficult question to answer. These restructuring costs are coming
:16:54. > :17:00.down very slowly but there is a long way to go and yesterday we heard
:17:01. > :17:04.that RBS are likely to miss the deadline for spinning off those
:17:05. > :17:08.particular branches as a result of the state aid rules. I am not overly
:17:09. > :17:13.optimistic that we will get any good news from RBS at the moment, that
:17:14. > :17:19.being said, I think the share price being down should be fairly limited.
:17:20. > :17:23.We are still above the lows that we sure -- we saw earlier this year.
:17:24. > :17:26.The upside is also likely to be limited though by the very
:17:27. > :17:32.full-court environment RBS is operating in. How difficult do you
:17:33. > :17:37.think the spin off of Williams and gain will be for RBS? It will be
:17:38. > :17:41.very problematic because for every month they push that out, it will
:17:42. > :17:46.increase their restructuring costs. They are already at ?1.5 billion and
:17:47. > :17:51.it is estimated it will be ?50 million extra per additional month.
:17:52. > :17:54.RBS will come back to us in respect of what that will cost going forward
:17:55. > :18:00.but it is likely to be very problematic. We will leave it there.
:18:01. > :18:05.The share price has been losing team in early trade.
:18:06. > :18:13.Of course here, a lot of stories about the BHS sagas and Sir Philip
:18:14. > :18:16.Green and the pension scheme, did it have enough assets when he flubbed
:18:17. > :18:22.it. Yes, for just ?1 and now it have
:18:23. > :18:26.gone bust the pension hole of ?575 million.
:18:27. > :18:32.You are watching business live. -- You're -- watching Business Live -
:18:33. > :18:34.Are the big bosses The boss of drug company AstraZeneca
:18:35. > :18:37.- Pascal Soriot faces They're expected to protest
:18:38. > :18:40.over the $12 million And judging from the recent mood
:18:41. > :18:55.at a raft of recent AGMs, they are indeed. Not with mighty
:18:56. > :18:58.though. I didn't have those in today.
:18:59. > :19:01.And now let's get the inside track on stories making waves this week
:19:02. > :19:03.with our Economics Editor, Kamal Ahmed.
:19:04. > :19:11.It is good to see you. Let's start off with the general theme of the
:19:12. > :19:17.global economy. The central banks we were just talking about. The Bank of
:19:18. > :19:20.Japan, so much expectation, the Federal Reserve did nothing. New
:19:21. > :19:28.Zealand did nothing. What does that tell us? New Zealand central bank,
:19:29. > :19:33.interest rates still at 2.5%. The key point here is that we are now
:19:34. > :19:36.seeing reflected in the great figures the turmoil that we were all
:19:37. > :19:42.reporting on in the first three months of the year which was around
:19:43. > :19:47.China's slowdown, market falls and also very low commodity prices. We
:19:48. > :19:51.are looking now at a picture, slightly in the rear-view mirror, of
:19:52. > :19:55.January to March. In America overnight they have announced graph
:19:56. > :20:02.-- great figures that are the slowest in two years. That is over
:20:03. > :20:08.company investment, in particular over the low oil price. In the UK,
:20:09. > :20:13.we announced to hear that our growth was slowing as well and as you say,
:20:14. > :20:20.Aaron, even Japan, the central bank governor decided not to do anything
:20:21. > :20:23.on rates, not wanting to drive them all into negative territory, because
:20:24. > :20:29.there has been little response to what he did earlier this year. The
:20:30. > :20:32.yen has actually strengthened despite him putting in negative
:20:33. > :20:37.rates. That has meant that people are not sure what this very odd
:20:38. > :20:44.monetary world we now live in has on the markets. The reason you touched
:20:45. > :20:49.on volatility, I think, is because a lot of this is political. Markets
:20:50. > :20:52.are looking at central banks and not being quite sure where they are
:20:53. > :20:59.going to go and are therefore reacting very strongly to quite
:21:00. > :21:03.slight signals. Nobody seems to know what is coming around the corner, it
:21:04. > :21:09.does seem. It certainly appears much more dovish now from the Fed, I
:21:10. > :21:16.would say. I know Bronwen said let's go for June, but some are saying not
:21:17. > :21:19.to until December. They did hint they might raise rates by four times
:21:20. > :21:24.this year. No one expects that any more. We have heard from Twitter,
:21:25. > :21:30.Apple and Facebook this year. A different story that seems to be
:21:31. > :21:37.emerging when it comes to the social media giants of the world. Take us
:21:38. > :21:44.through those. Apple, its revenues well for the first time in 13 years.
:21:45. > :21:50.That has created an issue around its share price which has fallen by 10%.
:21:51. > :21:52.We have heard the news that one billionaire investor has withdrawn
:21:53. > :21:56.all of his stake from Apple. Let's not forget they are an extremely
:21:57. > :22:01.profitable business though. A business that in the smartphone
:22:02. > :22:04.business still leads the world. There is some slowing in that but in
:22:05. > :22:09.terms of the actual business, doesn't seem to be a problem.
:22:10. > :22:12.Facebook doing incredibly well on smartphones in particular.
:22:13. > :22:20.Advertisers flowing to Facebook. It has started using video, Instagram
:22:21. > :22:26.and messenger, so growing and Berry, very powerful figures. Its share
:22:27. > :22:31.price is now four times what it was at the original offering. Then you
:22:32. > :22:36.come to twitter. A social media company that is struggling to find
:22:37. > :22:40.new uses and is really struggling to prove to its investors that it has a
:22:41. > :22:49.revenue model, and advertising model. So the three stories are very
:22:50. > :22:53.different but tell us a lot about how the market is working.
:22:54. > :22:56.To the US, where tens of thousands of investors are flocking to Omaha,
:22:57. > :22:58.Nebraska for the annual shareholder meeting of Berkshire Hathaway.
:22:59. > :23:09.Through half a century, three the ups and downs of the stock market,
:23:10. > :23:16.there is one ambassador that everyone has followed - Warren
:23:17. > :23:21.Buffett. His strategies appear to be quite simple. He buys stocks and
:23:22. > :23:27.goods that we use everyday. His investment empire includes close 90
:23:28. > :23:33.companies with many household names like Walmart and Coca-Cola. Since he
:23:34. > :23:38.started buying shares in the 1960s, the company has had an average
:23:39. > :23:46.annual growth of over 19%. That is nearly double of the assembly by the
:23:47. > :23:49.hundred. Its shares have riven -- risen 2000% in the last 25 years
:23:50. > :23:56.alone. But as shareholders of Berkshire Hathaway gather, there is
:23:57. > :24:00.one concern. Warren Buffett is getting old and his number two is
:24:01. > :24:06.even older. He will be the beach of the company? Given the unique nature
:24:07. > :24:11.of Berkshire Hathaway, my sense is that a successor will emerge from
:24:12. > :24:15.within the company. Another thing to consider is that an argument could
:24:16. > :24:22.be made for breaking up Berkshire Hathaway and that "Another list of
:24:23. > :24:26.speculations. On Saturday, tens of thousands of shareholders will
:24:27. > :24:31.gather to cheer yet another year of Warren Buffett's unparalleled
:24:32. > :24:33.success. But one question on their minds will be, how much longer can
:24:34. > :24:51.he continue? Let's get back into it. Why did one
:24:52. > :24:57.billionaire investor drop all of his investment in Apple? If I had made
:24:58. > :25:09.$2 billion from my investment, I might take some money out as well.
:25:10. > :25:13.He only had it for three years? Yes. He got them to do some things with
:25:14. > :25:17.his cash and had some things changed. He feels that Tim Cook is
:25:18. > :25:27.doing a good job and wanted his money back. Really it is about
:25:28. > :25:30.China. The Chinese have stopped iTunes movies and books being sold
:25:31. > :25:33.in China and he is worried that a lot more revenue is coming from
:25:34. > :25:41.those apps rather than from the actual phones which, as we said a
:25:42. > :25:44.moment ago, are going down. We have only got about 15 seconds left, so I
:25:45. > :25:48.don't think will get to the other paper, but they are worried that
:25:49. > :25:52.China is Apple's future growth market but China is a problem.
:25:53. > :25:57.Sorry, short but sweet. Great is the youth.
:25:58. > :26:01.There will be more business news throughout the day on the BBC Live