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