Browse content similar to 29/04/2016. Check below for episodes and series from the same categories and more!
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This is Business Live from BBC News with Victoria Fritz | :00:00. | :00:00. | |
Executive pay is in the spotlight again as the UK's second biggest | :00:07. | :00:14. | |
drugmaker, AstraZeneca holds its AGM. | :00:15. | :00:15. | |
But in the past few weeks have seen executives at oil majors, | :00:16. | :00:19. | |
mining firms and media giants have have their pay deals rejected | :00:20. | :00:22. | |
Live from London, that's our top story on Friday the 29th April. | :00:23. | :00:43. | |
Are the big bosses getting paid to much? | :00:44. | :00:44. | |
Can the advertising boss, Sir Martin Sorrell, justify his 100 | :00:45. | :00:47. | |
Judging from the mood - as the AGM season gets underway - | :00:48. | :01:01. | |
Also in the programme...tens of thousands | :01:02. | :01:03. | |
of fans are flocking to Omaha in Nebraska this weekend. | :01:04. | :01:06. | |
Not for a festival or concert - but to the annual shareholder gig | :01:07. | :01:09. | |
held by the legendary investor and money maker Warren Buffett. | :01:10. | :01:11. | |
We'll have report on one of the world's savviest investors | :01:12. | :01:14. | |
you the latest from the financial markets where Europe is already | :01:15. | :01:20. | |
And we'll be getting the inside track on what the world's | :01:21. | :01:30. | |
top central bankers have been up to, the state of the auto industry | :01:31. | :01:34. | |
As always, we would love to hear from you. Just drop us a step -- | :01:35. | :01:47. | |
just drop us a line. We are talking big bucks this Friday | :01:48. | :01:49. | |
- specifically the controversial Are top bosses worth | :01:50. | :02:00. | |
the money they earn? biggest companies hold their annual | :02:01. | :02:08. | |
shareholder meetings. More and more - | :02:09. | :02:13. | |
the answer seems to be no. Earlier this month, BP shareholders | :02:14. | :02:18. | |
revolted over a big pay rise for the boss Bob Dudley - | :02:19. | :02:23. | |
awarding him $20 million despite record losses | :02:24. | :02:26. | |
at the oil giant. Almost 60% of shareholders | :02:27. | :02:31. | |
voted against it. Just a week later, Anglo American | :02:32. | :02:35. | |
shareholders also revolted. The CEO was in line | :02:36. | :02:38. | |
for a $5 million payout - despite Anglo being the worst | :02:39. | :02:41. | |
performing company Today the boss of drug | :02:42. | :02:46. | |
company AstraZeneca - They're expected to cry foul | :02:47. | :02:52. | |
over the $12 million Mr Soriot rejected a takeover bid | :02:53. | :02:56. | |
from Pfizer two years ago. All | :02:57. | :03:11. | |
of these pale into insignificance Sir Martin Sorrell, of the world's | :03:12. | :03:13. | |
biggest advertising company WPP - is due for a $100 million pay | :03:14. | :03:22. | |
package - most of it in performance related share awards - | :03:23. | :03:25. | |
he could face a rocky ride They'd have you with us. We have | :03:26. | :03:52. | |
been about this 2012, we saw a shareholder spring. Is it that? It | :03:53. | :03:59. | |
looks like it. Given the fact that companies have been doing less well | :04:00. | :04:02. | |
in the financial markets, shareholders are up in Mark -- up in | :04:03. | :04:08. | |
arms. In particular, given the new cable regulations coming in, giving | :04:09. | :04:13. | |
shareholders a binding vote on executive pay, that has focused the | :04:14. | :04:19. | |
spotlight on shareholders voting on executive compensation. I would say | :04:20. | :04:23. | |
that basically, when it comes to that, shareholders need more | :04:24. | :04:26. | |
alignment of compensation with performance. Can I ask you that? For | :04:27. | :04:35. | |
our viewers around the world, you mentioned Vince Cable, the Business | :04:36. | :04:41. | |
Secretary in 2012. He implemented some rules. Is there a difference? | :04:42. | :04:51. | |
Between some of these CEOs? We cannot put them all into one basket. | :04:52. | :04:57. | |
Martin Sorrell said that he spent 31 year building it, and he is backing | :04:58. | :05:04. | |
the company. That is a different picture than Bob Darley who look | :05:05. | :05:11. | |
over the -- looked over the biggest failure in the history. CEOs can be | :05:12. | :05:19. | |
paid in terms of the value they add, or the what they would get | :05:20. | :05:26. | |
elsewhere. So insect -- so executive compensation could be in between the | :05:27. | :05:29. | |
two. It depends on market conditions. The market is looking | :05:30. | :05:34. | |
less attractive, and so shareholders are being more exacting on executive | :05:35. | :05:40. | |
compensation. That is why we are seeing more of a revolt on executive | :05:41. | :05:46. | |
pay. It is interesting, because many of the major shareholders in | :05:47. | :05:50. | |
companies are fun urgent -- managers. This poses some sort of | :05:51. | :05:55. | |
conflict of interest when they are investing themselves, but act -- | :05:56. | :06:02. | |
particularly in financial institutions. I have done research | :06:03. | :06:09. | |
in this area, and what I found is that when fund companies vote on | :06:10. | :06:14. | |
other fund companies, they are more supportive of these companies than | :06:15. | :06:18. | |
they are of other companies outside of the financial sector. This might | :06:19. | :06:22. | |
be driven by social ties between these companies, so if I work for a | :06:23. | :06:28. | |
financial company, company one, then I might be concerned that I want to | :06:29. | :06:34. | |
get a job at company to, and so I am going to vote more favourably with | :06:35. | :06:38. | |
them. Tit-for-tat voting can be important. If company one owns | :06:39. | :06:45. | |
shares in company 2, they will be concerned that company 2 will vote | :06:46. | :06:51. | |
against it. A complete conflict of interest. At the end the day, the | :06:52. | :07:00. | |
financial crisis, and one of the reasons for the financial crisis, it | :07:01. | :07:03. | |
is being blamed on the poor governance of financial companies a | :07:04. | :07:06. | |
financial companies are the policeman of other financial | :07:07. | :07:12. | |
companies, what will be expecting terrapin we had to leave it there. | :07:13. | :07:20. | |
Shares of online retail giant Amazon have jumped in after hours trading - | :07:21. | :07:23. | |
after it said sales rose 28 per cent in the first three | :07:24. | :07:26. | |
months of the year - to more than 29 billion dollars. | :07:27. | :07:34. | |
Profits hit $513 million - both were better than | :07:35. | :07:37. | |
Amazon's been boosted by rising sales of its | :07:38. | :07:39. | |
It's also seeing strong growth in customers for its Prime service, | :07:40. | :07:43. | |
which includes free delivery and TV shows - as well as in its | :07:44. | :07:46. | |
Comcast has confirmed its NBCUniversal unit will buy | :07:47. | :07:52. | |
DreamWorks Animation for $3.8bn in cash. | :07:53. | :07:53. | |
DreamWorks is the studio behind a string of animated hits films | :07:54. | :07:56. | |
including Shrek and Kung Fu Panda - but has been losing | :07:57. | :07:59. | |
The deal will put Comcast in direct competition with Disney. | :08:00. | :08:02. | |
Dreamworks Animation shares surged 24 per cent on confirmation | :08:03. | :08:04. | |
My teeth have not been in all morning! | :08:05. | :08:25. | |
And the US car giant Ford has made record quarterly profits | :08:26. | :08:28. | |
of $3.8 billion - on strong sales in Europe - | :08:29. | :08:30. | |
and a revamped range of trucks in North America. | :08:31. | :08:32. | |
Ford shares were boosted further - after the Chief executive | :08:33. | :08:37. | |
Mark Fields confirmed Ford is working on an electric vehicle | :08:38. | :08:39. | |
with a 200 mile range to match rivals from Tesla | :08:40. | :08:42. | |
Are you going to help me with my teeth today? Not the scripts! Let's | :08:43. | :09:08. | |
have a look at the website. I AG, the airline group, the parent group | :09:09. | :09:17. | |
of British airways. A good first quarter. Pre-tax profits have jumped | :09:18. | :09:28. | |
to 124 million euros. About $140 million. This compares to the same | :09:29. | :09:32. | |
period a year ago, when they had an loss of 37 million euros. | :09:33. | :09:38. | |
Interesting, the comment about trading remaining the same, despite | :09:39. | :09:43. | |
attacks. They are keeping their eyes attacks. They are keeping their eyes | :09:44. | :09:45. | |
on the rest of the competition. Italian luxury goods maker Gucci has | :09:46. | :09:50. | |
sent warning letters to Hong Kong shops selling paper versions | :09:51. | :09:53. | |
of its products as Paper replicas of items | :09:54. | :09:55. | |
like mansions, cars, iPads and luxury bags are burnt | :09:56. | :10:02. | |
in the belief that deceased relatives can use them | :10:03. | :10:05. | |
in the afterlife. Juliana Liu is in Hong Kong and has | :10:06. | :10:06. | |
more on the story. I understand this is all about | :10:07. | :10:18. | |
keeping your relatives happy in the next life. Presumably, they are | :10:19. | :10:22. | |
going to be buried happy with Gucci handbags? Absolutely, especially | :10:23. | :10:28. | |
ones that were not able to afford these handbags when they were still | :10:29. | :10:32. | |
alive. I went to visit some of the shops, and I can tell you that Gucci | :10:33. | :10:37. | |
handbag and a pair of shoes costs just ?4 when they are made of paper! | :10:38. | :10:45. | |
This comes from a long try knees traditions -- Chinese tradition of | :10:46. | :10:49. | |
worshipping your ancestors. Their spirit remains somehow alive, and | :10:50. | :10:52. | |
they are able to influence what happens in the land the living. If | :10:53. | :10:57. | |
you want to avoid a run of bad luck, you have to keep your ancestors | :10:58. | :11:02. | |
happy. In the past, that done by burning paper notes, so fake money, | :11:03. | :11:07. | |
but these days, ancestors are much more demanding and they want iPads, | :11:08. | :11:11. | |
they want mentioned, they want Gucci! This is what their | :11:12. | :11:20. | |
descendants burn. Very demanding and since -- ancestors! | :11:21. | :11:21. | |
Let's have a quick look at the markets. The Japanese yen is going | :11:22. | :11:33. | |
strong. Let's have a look at the Nick Hayden. That is the second day | :11:34. | :11:37. | |
that we have seen falls of 3%. This is how it is across Europe. Spain | :11:38. | :11:44. | |
has defied expectations that GDP and economic growth would slow. Their | :11:45. | :11:51. | |
economy expanded by 0.8%. That is despite the recent political drama | :11:52. | :11:54. | |
there. Crossing over to the States. Let's hear from Michelle Fleury. | :11:55. | :12:02. | |
Inflation will be an investors' minds. The PCE price index is | :12:03. | :12:10. | |
released. It is expected to show prices rising below the Fed's target | :12:11. | :12:18. | |
of 2% a year. One factor in that is the very low price of oil. Possibly | :12:19. | :12:25. | |
good for consumers, but terrible for the big oil companies. The biggest | :12:26. | :12:30. | |
in America, Exxon, is expected to report a drop in profits after the | :12:31. | :12:37. | |
indignity of having it credit rating cut for the first time in 86 years. | :12:38. | :12:42. | |
But it is still in better shape than Chevron, who is expected to report a | :12:43. | :12:49. | |
loss for the fourth -- loss for the quarter. | :12:50. | :12:51. | |
Joining us is Bronwyn Curtis, Chair, Society of Business Economists. | :12:52. | :12:54. | |
You just got back from down under. It was sunny and warm! Let's talk | :12:55. | :13:11. | |
about the markets. We have seen a lot of movement on the currency. The | :13:12. | :13:17. | |
dollar is down, the Japanese in -- Japanese yet is up. It just seems | :13:18. | :13:26. | |
that the markets and investors are all waiting for something, I am not | :13:27. | :13:31. | |
sure what they are waiting for. It is the uneasy period. They are | :13:32. | :13:35. | |
waiting for the Central banks, they are waiting for government, probably | :13:36. | :13:39. | |
to do stimulus. When the Fed met this week, they talked about global | :13:40. | :13:48. | |
risk, and moved it down, but we expected the central bank of Japan | :13:49. | :13:51. | |
to do something and they did nothing. It is less risky than in | :13:52. | :13:56. | |
January, when everyone was worried about China. The numbers from China | :13:57. | :14:01. | |
are coming a bit better, but I am worried when we see big moves in | :14:02. | :14:05. | |
currencies, because it usually means that something is going to happen. | :14:06. | :14:09. | |
The worst big move is when the dollar goes up, and it is going down | :14:10. | :14:13. | |
at the moment. We should seek slightly positive numbers, but it is | :14:14. | :14:19. | |
the awful feeling that is it selling may and go away? So we have two or | :14:20. | :14:23. | |
three weeks before we sell in May and go away into -- until September? | :14:24. | :14:30. | |
Speaking of the dollar, you said it was coming down. The strong dollar | :14:31. | :14:34. | |
has been a real problem for America recently. We did have some figures | :14:35. | :14:38. | |
out from America when it came down to GDP in economic growth. They | :14:39. | :14:43. | |
weren't great, but we also did hear from the Federal reserve, and they | :14:44. | :14:46. | |
offer little is fairly bullish on the ballot for the American economy. | :14:47. | :14:52. | |
I wonder how significant those numbers are going to be? I think | :14:53. | :15:00. | |
everyone is watching those numbers, plus the GDP numbers, but the | :15:01. | :15:04. | |
inflation numbers, as we talked about earlier, really important | :15:05. | :15:09. | |
today, because we are seeing Germany back in deflation, we are seeing | :15:10. | :15:12. | |
Japan with deflation. That is going to be the key. I am still looking, I | :15:13. | :15:16. | |
still think there is a good chance that the federal reserve will hike | :15:17. | :15:23. | |
rates in June. So your money is on June. Bronwen, you are going to take | :15:24. | :15:26. | |
us through the papers. We will see very shortly. | :15:27. | :15:31. | |
Legendary money Warren Buffett hold his annual gig in Omaha, | :15:32. | :15:34. | |
Nebraska tomorrow - tens of thousands flock | :15:35. | :15:36. | |
to the annual shareholder meeting of Berkshire Hathaway. | :15:37. | :15:38. | |
We find out what the future holds for Mr Buffett and his company. | :15:39. | :15:41. | |
You're with Business Live from BBC News. | :15:42. | :15:48. | |
Part-nationalised Royal Bank of Scotland has reported a widening | :15:49. | :15:50. | |
first quarter loss on Friday as lower income, restructuring costs | :15:51. | :15:54. | |
and sluggish assetsales showed the scale of problems | :15:55. | :15:56. | |
RBS reported a loss of ?968 million, up from ?459 | :15:57. | :16:03. | |
The losses were also driven by a one-off ?1.2 billion payment | :16:04. | :16:15. | |
to end the British government's priority over dividends. | :16:16. | :16:21. | |
Michael Hewson is Chief Market Analyst at CMC Markets Credit | :16:22. | :16:24. | |
We are seeing some interesting numbers coming out of RBS. We are | :16:25. | :16:36. | |
seeing losses more than double. ?238 million worth of restructuring | :16:37. | :16:39. | |
costs. Is this a bank that is actually on track when it comes to | :16:40. | :16:42. | |
restructuring and getting back into private hands or no? I think that is | :16:43. | :16:49. | |
a very difficult question to answer. These restructuring costs are coming | :16:50. | :16:53. | |
down very slowly but there is a long way to go and yesterday we heard | :16:54. | :17:00. | |
that RBS are likely to miss the deadline for spinning off those | :17:01. | :17:04. | |
particular branches as a result of the state aid rules. I am not overly | :17:05. | :17:08. | |
optimistic that we will get any good news from RBS at the moment, that | :17:09. | :17:13. | |
being said, I think the share price being down should be fairly limited. | :17:14. | :17:19. | |
We are still above the lows that we sure -- we saw earlier this year. | :17:20. | :17:23. | |
The upside is also likely to be limited though by the very | :17:24. | :17:26. | |
full-court environment RBS is operating in. How difficult do you | :17:27. | :17:32. | |
think the spin off of Williams and gain will be for RBS? It will be | :17:33. | :17:37. | |
very problematic because for every month they push that out, it will | :17:38. | :17:41. | |
increase their restructuring costs. They are already at ?1.5 billion and | :17:42. | :17:46. | |
it is estimated it will be ?50 million extra per additional month. | :17:47. | :17:51. | |
RBS will come back to us in respect of what that will cost going forward | :17:52. | :17:54. | |
but it is likely to be very problematic. We will leave it there. | :17:55. | :18:00. | |
The share price has been losing team in early trade. | :18:01. | :18:05. | |
Of course here, a lot of stories about the BHS sagas and Sir Philip | :18:06. | :18:13. | |
Green and the pension scheme, did it have enough assets when he flubbed | :18:14. | :18:16. | |
it. Yes, for just ?1 and now it have | :18:17. | :18:22. | |
gone bust the pension hole of ?575 million. | :18:23. | :18:26. | |
You are watching business live. -- You're -- watching Business Live - | :18:27. | :18:32. | |
Are the big bosses The boss of drug company AstraZeneca | :18:33. | :18:34. | |
- Pascal Soriot faces They're expected to protest | :18:35. | :18:37. | |
over the $12 million And judging from the recent mood | :18:38. | :18:40. | |
at a raft of recent AGMs, they are indeed. Not with mighty | :18:41. | :18:55. | |
though. I didn't have those in today. | :18:56. | :18:58. | |
And now let's get the inside track on stories making waves this week | :18:59. | :19:01. | |
with our Economics Editor, Kamal Ahmed. | :19:02. | :19:03. | |
It is good to see you. Let's start off with the general theme of the | :19:04. | :19:11. | |
global economy. The central banks we were just talking about. The Bank of | :19:12. | :19:17. | |
Japan, so much expectation, the Federal Reserve did nothing. New | :19:18. | :19:20. | |
Zealand did nothing. What does that tell us? New Zealand central bank, | :19:21. | :19:28. | |
interest rates still at 2.5%. The key point here is that we are now | :19:29. | :19:33. | |
seeing reflected in the great figures the turmoil that we were all | :19:34. | :19:36. | |
reporting on in the first three months of the year which was around | :19:37. | :19:42. | |
China's slowdown, market falls and also very low commodity prices. We | :19:43. | :19:47. | |
are looking now at a picture, slightly in the rear-view mirror, of | :19:48. | :19:51. | |
January to March. In America overnight they have announced graph | :19:52. | :19:55. | |
-- great figures that are the slowest in two years. That is over | :19:56. | :20:02. | |
company investment, in particular over the low oil price. In the UK, | :20:03. | :20:08. | |
we announced to hear that our growth was slowing as well and as you say, | :20:09. | :20:13. | |
Aaron, even Japan, the central bank governor decided not to do anything | :20:14. | :20:20. | |
on rates, not wanting to drive them all into negative territory, because | :20:21. | :20:23. | |
there has been little response to what he did earlier this year. The | :20:24. | :20:29. | |
yen has actually strengthened despite him putting in negative | :20:30. | :20:32. | |
rates. That has meant that people are not sure what this very odd | :20:33. | :20:37. | |
monetary world we now live in has on the markets. The reason you touched | :20:38. | :20:44. | |
on volatility, I think, is because a lot of this is political. Markets | :20:45. | :20:49. | |
are looking at central banks and not being quite sure where they are | :20:50. | :20:52. | |
going to go and are therefore reacting very strongly to quite | :20:53. | :20:59. | |
slight signals. Nobody seems to know what is coming around the corner, it | :21:00. | :21:03. | |
does seem. It certainly appears much more dovish now from the Fed, I | :21:04. | :21:09. | |
would say. I know Bronwen said let's go for June, but some are saying not | :21:10. | :21:16. | |
to until December. They did hint they might raise rates by four times | :21:17. | :21:19. | |
this year. No one expects that any more. We have heard from Twitter, | :21:20. | :21:24. | |
Apple and Facebook this year. A different story that seems to be | :21:25. | :21:30. | |
emerging when it comes to the social media giants of the world. Take us | :21:31. | :21:37. | |
through those. Apple, its revenues well for the first time in 13 years. | :21:38. | :21:44. | |
That has created an issue around its share price which has fallen by 10%. | :21:45. | :21:50. | |
We have heard the news that one billionaire investor has withdrawn | :21:51. | :21:52. | |
all of his stake from Apple. Let's not forget they are an extremely | :21:53. | :21:56. | |
profitable business though. A business that in the smartphone | :21:57. | :22:01. | |
business still leads the world. There is some slowing in that but in | :22:02. | :22:04. | |
terms of the actual business, doesn't seem to be a problem. | :22:05. | :22:09. | |
Facebook doing incredibly well on smartphones in particular. | :22:10. | :22:12. | |
Advertisers flowing to Facebook. It has started using video, Instagram | :22:13. | :22:20. | |
and messenger, so growing and Berry, very powerful figures. Its share | :22:21. | :22:26. | |
price is now four times what it was at the original offering. Then you | :22:27. | :22:31. | |
come to twitter. A social media company that is struggling to find | :22:32. | :22:36. | |
new uses and is really struggling to prove to its investors that it has a | :22:37. | :22:40. | |
revenue model, and advertising model. So the three stories are very | :22:41. | :22:49. | |
different but tell us a lot about how the market is working. | :22:50. | :22:53. | |
To the US, where tens of thousands of investors are flocking to Omaha, | :22:54. | :22:56. | |
Nebraska for the annual shareholder meeting of Berkshire Hathaway. | :22:57. | :22:58. | |
Through half a century, three the ups and downs of the stock market, | :22:59. | :23:09. | |
there is one ambassador that everyone has followed - Warren | :23:10. | :23:16. | |
Buffett. His strategies appear to be quite simple. He buys stocks and | :23:17. | :23:21. | |
goods that we use everyday. His investment empire includes close 90 | :23:22. | :23:27. | |
companies with many household names like Walmart and Coca-Cola. Since he | :23:28. | :23:33. | |
started buying shares in the 1960s, the company has had an average | :23:34. | :23:38. | |
annual growth of over 19%. That is nearly double of the assembly by the | :23:39. | :23:46. | |
hundred. Its shares have riven -- risen 2000% in the last 25 years | :23:47. | :23:49. | |
alone. But as shareholders of Berkshire Hathaway gather, there is | :23:50. | :23:56. | |
one concern. Warren Buffett is getting old and his number two is | :23:57. | :24:00. | |
even older. He will be the beach of the company? Given the unique nature | :24:01. | :24:06. | |
of Berkshire Hathaway, my sense is that a successor will emerge from | :24:07. | :24:11. | |
within the company. Another thing to consider is that an argument could | :24:12. | :24:15. | |
be made for breaking up Berkshire Hathaway and that "Another list of | :24:16. | :24:22. | |
speculations. On Saturday, tens of thousands of shareholders will | :24:23. | :24:26. | |
gather to cheer yet another year of Warren Buffett's unparalleled | :24:27. | :24:31. | |
success. But one question on their minds will be, how much longer can | :24:32. | :24:33. | |
he continue? Let's get back into it. Why did one | :24:34. | :24:51. | |
billionaire investor drop all of his investment in Apple? If I had made | :24:52. | :24:57. | |
$2 billion from my investment, I might take some money out as well. | :24:58. | :25:09. | |
He only had it for three years? Yes. He got them to do some things with | :25:10. | :25:13. | |
his cash and had some things changed. He feels that Tim Cook is | :25:14. | :25:17. | |
doing a good job and wanted his money back. Really it is about | :25:18. | :25:27. | |
China. The Chinese have stopped iTunes movies and books being sold | :25:28. | :25:30. | |
in China and he is worried that a lot more revenue is coming from | :25:31. | :25:33. | |
those apps rather than from the actual phones which, as we said a | :25:34. | :25:41. | |
moment ago, are going down. We have only got about 15 seconds left, so I | :25:42. | :25:44. | |
don't think will get to the other paper, but they are worried that | :25:45. | :25:48. | |
China is Apple's future growth market but China is a problem. | :25:49. | :25:52. | |
Sorry, short but sweet. Great is the youth. | :25:53. | :25:57. | |
There will be more business news throughout the day on the BBC Live | :25:58. | :26:01. |