:00:00. > :00:10.This is Business Live from BBC News with Ben Thompson and Sally Bundock.
:00:11. > :00:14.Will shareholders take on Sir Martin Sorrell?
:00:15. > :00:17.He is the boss of the world s biggest ad firm WPP -
:00:18. > :00:40.Live from London, that's our top story on Wednesday, 8th June.
:00:41. > :00:52.How much is too much - that's the question facing
:00:53. > :00:55.The company's boss Sir Martin Sorrell is the highest paid
:00:56. > :00:58.He says he deserves over $100 million.
:00:59. > :01:01.Also in the programme, the world's second-largest
:01:02. > :01:03.shipbuilder Daewoo has had is offices raided in South Korea
:01:04. > :01:06.as part of an investigation into alleged accounting irregularities.
:01:07. > :01:11.The markets look like this. Not a great start for the markets
:01:12. > :01:14.across-the-board. Is this profit taking? Is there something more
:01:15. > :01:16.sinister going on? We will explain. We'll be getting the inside
:01:17. > :01:18.track with the boss Founded in 2003 in a spare room it's
:01:19. > :01:28.now worth more than $1.5 billion. We'll explain why the boss prefers
:01:29. > :01:31.to be called a rabbit, As one Harvard professor says
:01:32. > :01:36.we shouldn t love our flaws He says it can prevent
:01:37. > :01:40.you from succeeding. So is it time we ditched
:01:41. > :01:42.the self-confidence and learned to admit
:01:43. > :01:44.our weaknesses at work? Let us know, use the
:01:45. > :01:51.hashtag BBCBizLive. My weaknesses are displayed in a
:01:52. > :02:03.public way on this programme! Executive pay is once again
:02:04. > :02:08.in the headlines as shareholders seek to vent their frustrations
:02:09. > :02:11.at bumper pay packets Today it's the turn
:02:12. > :02:15.of Sir Martin Sorrell, the Chief Executive of the world's
:02:16. > :02:21.largest advertising agency, WPP. He'll face investors at the firm's
:02:22. > :02:24.annual general meeting. Mr Sorrell is the highest paid
:02:25. > :02:26.Chief Executive in the FTSE 100 and is in line for a total payout
:02:27. > :02:35.of around $102 million. He argues that his compensation
:02:36. > :02:41.packet is heavily weighted towards the company's share price
:02:42. > :02:49.and that "if WPP does well, WPP announced in March
:02:50. > :02:53.that its annual pre-tax profits rose 2.8%
:02:54. > :02:56.to $2.2 billion. But despite this the Shareholder
:02:57. > :03:01.advisory group ShareSoc has recommended its members to reject
:03:02. > :03:07.the package saying that they "don't think it will make him
:03:08. > :03:10.work any harder." Not all bosses believe
:03:11. > :03:22.in performance-related pay though. The Chief Executive
:03:23. > :03:24.of Alphabet, the parent company of Google, accepts
:03:25. > :03:27.an annual salary of just $1. Although it should be said
:03:28. > :03:30.that his 6.5% stake in the firm does With me now is Oliver Parry,
:03:31. > :03:39.head of corporate governance Oliver welcome to Business Live. The
:03:40. > :03:42.first question, is he worth it? If you look at what happened with
:03:43. > :03:46.respect to the shares over the last five years, they have more than
:03:47. > :03:52.doubled. Profit in that time is up at ?10 billion. The FTSE has only
:03:53. > :03:57.risen by 5.8%, shareholder are receiving significant returns. When
:03:58. > :04:01.he bought that company up, he lives and breathes the brand, I think he
:04:02. > :04:06.probably is, but the quantum is extremely We talk about large. The
:04:07. > :04:11.shareholder activism. We have seen a big upswing in the number of
:04:12. > :04:14.shareholders who are getting vocal about the pay to top bosses, the
:04:15. > :04:19.question is whether they have the power to change anything? They do,
:04:20. > :04:21.when it is a vote. I think it is really crucial that the board and
:04:22. > :04:27.the shareholders engage with one another. So yes, it is great when
:04:28. > :04:31.there is a majority shareholder vote against such as we saw at BP, but
:04:32. > :04:35.there needs to be regular engagement between the board and the
:04:36. > :04:39.shareholders. A lot of this is paid in shares to Sir Martin. As he said
:04:40. > :04:42.when the firm does well, he does well and clearly there is a
:04:43. > :04:46.correlation between the two, but is there a danger though that we see
:04:47. > :04:50.top bosses earning so much, that gap between what the normal worker is
:04:51. > :04:55.being paid and what the top boss is being paid gets ever bigger and
:04:56. > :04:59.actually this becomes a moral issue, not necessarily a financial issue?
:05:00. > :05:03.Well, there is a moral and ethical dimension. It is very much down to
:05:04. > :05:06.the shareholders. So you have seen local authority pension scheme this
:05:07. > :05:10.morning recommending votes against and that's right because they see it
:05:11. > :05:14.as a moral imperative to do so. The power lies with the showeders. It is
:05:15. > :05:17.crucial that the shareholders exercise their views as we saw with
:05:18. > :05:21.the Church of England and BP several weeks ago. Is there a brand or a
:05:22. > :05:27.potential damage to the brand as a result of this? Because yes, rightly
:05:28. > :05:30.or wrongly, Sir Martin sorle says he deserves the money, but does it come
:05:31. > :05:33.down to the reputation of the firm? Again, it is that issue, isn't it,
:05:34. > :05:37.the boss is being seen to be paid a lot, whether he is worth it or not,
:05:38. > :05:41.many people who are looking at the company will not get into that. They
:05:42. > :05:45.will see he is earning this bumper pay packet and everyone else isn't.
:05:46. > :05:52.How do they prevent that from being damaging to the brand? If
:05:53. > :05:59.performance doesn't match, you saw poor performance with BP and the
:06:00. > :06:04.Chief Executive is paid a large amount of money there, but for me,
:06:05. > :06:11.it can have an effect on British businesses as a hell and that's the
:06:12. > :06:16.real damaging aspect. Our average member earnings ?100,000 a year, and
:06:17. > :06:18.it affects them, the reputation of British business can be affected.
:06:19. > :06:30.That's the worrying concern. Oliver, it is really good to hear your
:06:31. > :06:37.thoughts. An Egyptian passenger plane en route from Cairo to Beijing
:06:38. > :06:41.has made an emergency landing. It landed in Uzbekistan and this was
:06:42. > :06:48.because, it is reported, there was a bomb threat. Now, Uzbekistan Airways
:06:49. > :06:53.said everybody has been evacuated. They are safe. It is not known yet
:06:54. > :06:57.which airliner it was, but Russian news agencies are saying it was an
:06:58. > :07:00.Egypt Aeroplane. That's what we know at the moment. We shall keep you
:07:01. > :07:04.up-to-date with any developments on that. We're told, more information
:07:05. > :07:10.coming through, 118 passengers on board. 17 crew, all evacuated
:07:11. > :07:13.safely. Security Services are currently examining that plane. As
:07:14. > :07:17.soon as we have anymore details, we will bring it to you right here.
:07:18. > :07:22.New Chinese trade data shows the world's second-largest economy
:07:23. > :07:31.Exports fell by 4.1% from a year earlier to $181.1 billion.
:07:32. > :07:33.That's more than double April's 1.8% fall.
:07:34. > :07:35.Imports meanwhile edged down 0.4% to $131.1 billion,
:07:36. > :07:43.an improvement over the previous month's 10.9% fall.
:07:44. > :07:46.Japan's economy is growing faster than we first thought.
:07:47. > :07:49.The official growth rate for the first-quarter of the year
:07:50. > :07:53.has been revised upwards to an annual 1.9%.
:07:54. > :07:55.But market in Tokyo fell in early trading because the higher GDP
:07:56. > :07:58.number could reduce the chance of more economic stimulus measures
:07:59. > :08:13.The FBI is warning banks about potential cyber attacks linked
:08:14. > :08:19.to an interbank messaging system called Swift.
:08:20. > :08:21.In February, hackers stole $81 million from Bangladesh's
:08:22. > :08:22.central bank account with the Federal Reserve
:08:23. > :08:26.The FBI message warned of a malicious cyber group that
:08:27. > :08:38.You may have been following the story of British Home Stores, and
:08:39. > :08:42.its demise. 11,000 jobs at risk. 164 stores potentially closing across
:08:43. > :08:46.the country. Today, the new boss is in the firing line. He will be
:08:47. > :08:50.facing MPs and they will be asking him about what happened, what went
:08:51. > :08:56.wrong and why he bought it for just ?1 last year? You'll know that it
:08:57. > :08:58.entered administration and liquidation after failing to find a
:08:59. > :09:10.buyer for the business as a going concern. That on the live page and
:09:11. > :09:15.full details across the BBC as Dominic Chapel gives evidence.
:09:16. > :09:18.South Korean prosecutors have stormed the offices of the world's
:09:19. > :09:20.second largest shipbuilder, Daewoo, as part of an investigation
:09:21. > :09:42.What do we know about the raid? 150 officials from the prosecutors
:09:43. > :09:53.offices went to Daowoo. An audit committee asked for a probe
:09:54. > :09:57.into the committee. Twonchts former CEOs are being investigated over
:09:58. > :10:01.potential mismanagement at the companiment Daewoo had a really
:10:02. > :10:08.rough time. They posted its biggest net loss last year of $3 billion. .
:10:09. > :10:14.This investigation is not going to help. They are affected by the fall
:10:15. > :10:17.in oil prices and the global slowdown meaning people aren't
:10:18. > :10:26.buying their tanker and container ships anymore.
:10:27. > :10:34.A mixed picture was emerging during the Asian trading session. Japan up
:10:35. > :10:39.by 1%. Japan's first quarter growth figure was revised upwards.
:10:40. > :10:43.We saw the market fall off the back of that news, but in general, it has
:10:44. > :10:45.been a mixed day and you can see the Dow, the night before, ending
:10:46. > :10:49.higher. Let's look at Europe right now. We have a sense of how things
:10:50. > :10:54.are going. You can see London down just a little bit, but let's not
:10:55. > :10:58.forget last night it closed at its highest since April, 6th.
:10:59. > :11:02.Across-the-board, we have losses today, maybe some profit taking
:11:03. > :11:05.going on, but there is a lot of concern about what is happening in
:11:06. > :11:10.the near future. The markets are jittery. Talking of which in terms
:11:11. > :11:17.of the things that might make markets nervous. The US Presidential
:11:18. > :11:24.elections. Last night, primaries, Hillary Clinton cementing her hold
:11:25. > :11:30.on the Democratic knoll nation. She will be racing ahead with Donald
:11:31. > :11:35.Trump for the big job at the House. With the economy expected to
:11:36. > :11:40.dominate this election period, we asked Samira to sum rise where
:11:41. > :11:43.voters stand. Investors are starting to pay close attention to what the
:11:44. > :11:48.presidential candidates plan to do in economic policy. There are some
:11:49. > :11:52.huge differences between Hillary Clinton's economic agenda and Donald
:11:53. > :11:56.Trump's. Mrs Clinton seeks to raise the minimum wage while closing tax
:11:57. > :12:01.loopholes for the wealthiest. Mr Trump see as need to abolish the
:12:02. > :12:06.national minimum wage altogether and wants the lower tax rates for all.
:12:07. > :12:11.On immigration, Clinton clearly supports reforms that would let
:12:12. > :12:15.illegal immigrants become citizens. Trump infamously wants to build a
:12:16. > :12:19.wall between the US and Mexico and deport 11 million illegal
:12:20. > :12:23.immigrants, but one area on which the two candidates may actually have
:12:24. > :12:29.some common ground is international trade. Mr Trump claims he would
:12:30. > :12:34.renegotiate all of the US' existing by lateral trade deals. Mrs Clinton
:12:35. > :12:39.makes no such claim, but notably is not a supporter of the two trade
:12:40. > :12:43.deals that are currently being worked on.
:12:44. > :12:45.Joining us is James Quinn, Group Business Editor
:12:46. > :12:55.James nice to see you. Samira running through the US elections and
:12:56. > :13:00.the politics and that's going to dominate the agenda as is the Fed.
:13:01. > :13:04.There is a lot of other stuff sort of in the mix. It is not really
:13:05. > :13:07.getting the attention that maybe it would otherwise? That's right, we
:13:08. > :13:11.have Spanish elections at the end of this month. Potentially,
:13:12. > :13:17.destabilising the eurozone and the rest of Europe. As you mentioned,
:13:18. > :13:23.the referendum, the Fed, the election in the US. We've got the
:13:24. > :13:27.oil price back above 50 suggesting some certainty about price following
:13:28. > :13:30.the Opec meeting last week. We had World Bank estimates for world
:13:31. > :13:35.growth out last night suggesting a retraction. From 2.6% was an
:13:36. > :13:39.original estimate for this year, now down to 2.4%, solid growth, but not
:13:40. > :13:43.as strong. What's your take on all of this? You know if you are an
:13:44. > :13:47.investor right now, what are you going to do? Are you going to head
:13:48. > :13:50.straight for a safe haven, is that your thinking? That's right. There
:13:51. > :13:58.is a lot of jitters and concern. People don't seem to know. There was
:13:59. > :14:01.data out yesterday suggesting a capital flight suggesting ?66
:14:02. > :14:04.billion left the UK. Bank of England insiders would point to the fact
:14:05. > :14:11.that the da is volatile and can change from month to month. But
:14:12. > :14:13.also, you know, the FTSE ended at its highest since 6th April.
:14:14. > :14:16.Investors are not sure. There is a lot of concern. There is a
:14:17. > :14:21.suggestion this month very much investors will stay out of the
:14:22. > :14:26.market. One that we will watch closely, it is hard if you are an
:14:27. > :14:30.investor or a normal person like all of us! What to concentrate on
:14:31. > :14:34.because there is so many conflicting things and it strikes me that one
:14:35. > :14:39.thing cancels out something else. Is there a thought by the end of it, we
:14:40. > :14:43.could be where we are now, the status quo maintains? There is a lot
:14:44. > :14:46.of variables, clearly the US elections and what happens there and
:14:47. > :14:49.what happens the Fed and the rate rise and whether it happens this
:14:50. > :14:53.month or next month is clearly key, the world's biggest economy and
:14:54. > :14:57.China. You can never second-guess these things? I think so in the same
:14:58. > :15:00.way we can't second-guess a referendum. It looks too close to
:15:01. > :15:05.call in the UK now. No one can second-guess what is going to happen
:15:06. > :15:08.in the US election. As investors, whether you're focussing on money or
:15:09. > :15:12.companies, you have to try and focus on what you know and put the unknown
:15:13. > :15:16.variables that you can't control almost to one side. All about a
:15:17. > :15:23.steady nerve, clearly? Yeah. Hold your nerve through most of this. You
:15:24. > :15:34.learn something every day! You do. Especially on this show.
:15:35. > :15:41.We are going to meet the boss of Skyscanner later on today. We have
:15:42. > :15:46.also been asking you for your weaknesses at work.
:15:47. > :15:50.I am showing all mine today. We meet the boss of billion dollar
:15:51. > :15:54.travel site Skyscanner and ask why he prefers to be called a rabbit
:15:55. > :15:56.and not a unicorn. You're with Business
:15:57. > :16:02.Live from BBC News. BHS is back in the headlines this
:16:03. > :16:05.morning as MPs prepare to question the man who bought the retailer
:16:06. > :16:08.for just ?1 last year. Dominic Chappell is being blamed
:16:09. > :16:11.by BHS' management for the firm's demise, leaving 11,000 jobs at risk
:16:12. > :16:13.and former staff facing Rob Young is in our
:16:14. > :16:18.business newsroom. What are MPs going to be asking
:16:19. > :16:32.Mr Chappell about today? MPs will be talking to the boss of
:16:33. > :16:38.retail acquisitions, the company that bought BHS for ?1 last year, a
:16:39. > :16:43.former racing driver, a man who had been bankrupt three times and who
:16:44. > :16:47.had no retail experience. The MPs will be asking him why he thought he
:16:48. > :16:51.could turn around BHS when the retail tycoon Sir Philip Green had
:16:52. > :16:55.not been able to. They will also look at the way he managed the
:16:56. > :17:03.company as well. The management of BHS wrote to staff yesterday saying
:17:04. > :17:12.there view was that the reason BHS went under was because it needed
:17:13. > :17:20.massive investment, but Mr Chappell had not done that whilst he was
:17:21. > :17:26.taking out money from the company. Sir Philip Green, the previous owner
:17:27. > :17:29.of BHS had pulled the sale of the retailer to Mr Chappell on the same
:17:30. > :17:36.day he had discovered he had been bankrupt. The MPs who will be
:17:37. > :17:41.questioning Mr Chappell today will be talking to his financial backers
:17:42. > :17:46.and one of those described him as, not the person I would ever consider
:17:47. > :17:50.lending money to. This is important for the historical record, but also
:17:51. > :17:54.because this is the biggest retail failure in Britain for the best part
:17:55. > :18:00.of a decade and up to 11,000 jobs are at risk.
:18:01. > :18:08.We will stay across that story on BBC News.
:18:09. > :18:14.BHS and WPP to watch. WHSmith have given us an update. Travel sales at
:18:15. > :18:21.airports and railway stations are up by 9%. That helped offset a 4% fall
:18:22. > :18:28.in the high street. A familiar picture once again. Like-for-like
:18:29. > :18:30.sales were pretty flat. Doing well in travel, but not so well on the
:18:31. > :18:33.high Street. Our top story: The highest-paid CEO
:18:34. > :18:38.in the FTSE 100, Sir Martin Sorrell, will today find out if shareholders
:18:39. > :18:42.have accepted or rejected his $102 The CEO of WPP, the world's
:18:43. > :18:52.largest advertising group, says that he deserves the money
:18:53. > :18:54.because of how the company has been performing,
:18:55. > :19:05.but others disagree, He built up the company from
:19:06. > :19:08.scratch. Send us your thoughts on that because it is a very hot
:19:09. > :19:12.Now, these days chances are if you book a flight,
:19:13. > :19:16.you do it online and that soaring demand for online bookings has been
:19:17. > :19:21.One of the market's largest players is Skyscanner.
:19:22. > :19:24.It was founded back in 2003 in a spare room and began life as
:19:25. > :19:33.Earlier this year five investor funds backed the tech
:19:34. > :19:36.firm with $186 million, which gives the company a valuation
:19:37. > :19:42.of over $1.5 billion and making it a unicorn,
:19:43. > :19:45.that's a start-up company valued at over $1 billion.
:19:46. > :19:48.The funding will be used to expand Skyscanner overseas and to sign up
:19:49. > :19:52.more customers to the more than 50 million who already use
:19:53. > :20:00.Skyscanner Chief Executive Gareth Williams joins us.
:20:01. > :20:08.Welcome. In terms of your company, there are many companies that do
:20:09. > :20:13.what you do, but you have been around for quite some time. Do you
:20:14. > :20:20.think that is why you are either success that you are? First mover
:20:21. > :20:24.advantage? I am not sure it is first mover, the trick we have pulled off
:20:25. > :20:29.is to still care about travel. Often you do a up and become a business
:20:30. > :20:33.person first. We, throughout the company, care about travel and the
:20:34. > :20:39.traveller and concentrate on the quality of the results. We do that
:20:40. > :20:45.worldwide. And we have kept doing that same thing. It has also come
:20:46. > :20:50.down to the technology. It is one thing to be able to search travel
:20:51. > :20:55.sites and find flights, you have technology you built up over a long
:20:56. > :21:03.time which makes it different? The single biggest role in the company
:21:04. > :21:07.is software and as an example with processing over 3 billion
:21:08. > :21:13.itineraries every day and storing that data and reusing it and making
:21:14. > :21:19.it useful, inferring things from that data. How do you make it really
:21:20. > :21:23.user-friendly in the sense that if you go on your site and search for a
:21:24. > :21:27.flight you are not put off by the hundreds of options that might be
:21:28. > :21:31.irrelevant to what you want. That is what puts me off. I start with great
:21:32. > :21:36.intentions of finding the best deal, but I go to an airline websites
:21:37. > :21:41.because it is easier. We put a lot of effort into that and it seems to
:21:42. > :21:47.pay off, but there is still a lot further to go. In an ideal world we
:21:48. > :21:52.would show you the three best results. The fastest, the cheapest
:21:53. > :21:57.and the best value of the two. We have to strike a balance because we
:21:58. > :22:00.want to make sure that people who use us occasionally trust the
:22:01. > :22:07.results we are giving. At the moment we show them in price ranking order.
:22:08. > :22:15.In the future and for regular users we will offer filtered results that
:22:16. > :22:22.are purely chosen on the basis of traveller convenience. We talked to
:22:23. > :22:26.a lot of bosses of tech firms on this programme and Sally mentioned
:22:27. > :22:32.that have done particularly well in that have done particularly well in
:22:33. > :22:37.their industry. You do not like that term. You preferred the term rabbit.
:22:38. > :22:43.Just explain that for me. You do not want to be a unicorn, you want to be
:22:44. > :22:47.a rabbit. The problem I have got with a unicorn is it is all about
:22:48. > :22:53.funding invents, investment and selling shares. That is not at the
:22:54. > :22:58.core of entrepreneurial growth, about building a sustainable
:22:59. > :23:05.business that delivers value and in particular to travellers. And what
:23:06. > :23:12.can go up in a hype cycle can go down. The interesting one, when I
:23:13. > :23:18.heard the term rabbit, and it stands for real actual business building
:23:19. > :23:23.interest technology, and it betrays my software engineer background. But
:23:24. > :23:29.that is what we are doing and that is how we can add value and make
:23:30. > :23:34.online travel a bit less of a leg ache for millions of travellers. I
:23:35. > :23:40.collectively hear everyone watching going, oh, yes. Thank you, really
:23:41. > :23:43.nice to see you, Gareth Williams, chief Executive of Skyscanner.
:23:44. > :23:48.So, rabbits in a bunny market. In a moment we'll take a look
:23:49. > :23:51.through the Business Pages but first here's a quick reminder of how
:23:52. > :24:01.to get in touch with us. We will keep you up with all the
:24:02. > :24:05.latest details with insight and analysis from the BBC's team of
:24:06. > :24:13.editors around the world. We want to hear from you as well. Get involved
:24:14. > :24:28.in our web page. You can contact us on Twitter and Facebook.
:24:29. > :24:34.We have got a lot of tweets from you. Many of you have sent us
:24:35. > :24:40.messages about the story in the Independent. A Harvard philosophy
:24:41. > :24:46.professor said you should embrace your failings. Clearly we are
:24:47. > :24:47.proving that this morning! This is because it holds you back in
:24:48. > :24:59.business apparently. He teaches at Harvard and he says
:25:00. > :25:03.there should be a constant re-evaluation of yourself, do not
:25:04. > :25:08.think you are perfect because you think you are, you should try and
:25:09. > :25:13.evolve and think of others. I wonder how backlashes or compliments
:25:14. > :25:19.Silicon Valley type philosophy? That is all about the power of oneself
:25:20. > :25:26.and belief. But not necessarily navel gazing at your weaknesses?
:25:27. > :25:30.Yes, that is right. To have an entrepreneurial spirit you have to
:25:31. > :25:38.have some drive and in America the focus on business is very much to
:25:39. > :25:48.look at those failures and build on it. There are so many tweets to get
:25:49. > :25:52.through. Phil says, if you do not acknowledge and admit it, how can
:25:53. > :25:57.you improve? Ian says it should all be in your appraisal. That is all
:25:58. > :25:59.from us. Have a really good day. Goodbye.