:00:00. > :00:07.This is Business Live from BBC News with Susannah Streeter
:00:08. > :00:19.The US President tells Mexico and Canada he won't scrap their free
:00:20. > :00:22.trade deal but will try to renegotiate it.
:00:23. > :00:24.Live from London, that's our top story
:00:25. > :00:43.With farmers amongst those under pressure we'll look at what keeping
:00:44. > :00:46.NAFTA means for trade across North America as the Peso
:00:47. > :01:03.As pharmaceutical giant Astrazeneca holds its annual meeting
:01:04. > :01:07.will growing anger over boardroom pay lead to real change?
:01:08. > :01:18.This is the latest situation on the markets at the moment, or down down
:01:19. > :01:25.is likely because investors were disappointed by President John's
:01:26. > :01:28.actions. The strike President Trump's actions.
:01:29. > :01:30.Funding the enterepreneurs: We'll meet the man whose bank specialises
:01:31. > :01:34.Rishi Khosla , the boss of OakNorth Bank will be here.
:01:35. > :01:43.still trying to deal with the fall out from their overbooked flight,
:01:44. > :01:45.will now offer up to $10,000 to give up your seat.
:01:46. > :02:01.Hello and a warm welcome to Business Live.
:02:02. > :02:04.We start with President Trump - because once again he's taken
:02:05. > :02:09.The White House has confirmed it has told the leaders of Canada
:02:10. > :02:11.and Mexico they WON'T be scrapping the North American
:02:12. > :02:14.But instead they will seek to renegotiate the terms of it.
:02:15. > :02:19.to pull out of the pact Bill Clinton signed in 1993.
:02:20. > :02:21.In September he called it the "single worst trade deal"
:02:22. > :02:28.In January he used an executive order to pull out
:02:29. > :02:30.of the potentially huge Trans-Pacific Partnership
:02:31. > :02:34.Financial markets were worried he was about to do
:02:35. > :02:40.the same with NAFTA - with huge implications
:02:41. > :02:44.for industries from agriculture to the auto sector.
:02:45. > :02:46.The announcement to renogotiate rather than withdraw
:02:47. > :02:49.from the North American Free Trade Agreement has sent the Canadian
:02:50. > :03:02.Aaron. Good on you, Susanna. Those currencies liking that news.
:03:03. > :03:05.Earlier I spoke to Marco Lopez - a former Arizona politician
:03:06. > :03:07.who is now an International trade consultant advising US companies
:03:08. > :03:16.I asked him whether this was a pleasant surprise.
:03:17. > :03:24.Yes, a very good surprise indeed. We have been saying that, you know,
:03:25. > :03:28.it's very difficult to try to go out and kill 6 million jobs that depend
:03:29. > :03:32.on North American free to and that is exactly what he was proposing,
:03:33. > :03:37.President Trump, throughout the campaign. So good news I think for
:03:38. > :03:41.those American workers, 6 million of them that depend on trade with
:03:42. > :03:46.Mexico, I think he finally figured it out in 100 days, it's much more
:03:47. > :03:54.difficult to govern than it is to campaign. So this is a positive sign
:03:55. > :03:55.for everyone and all those industries that you mention
:03:56. > :04:00.especially the automotive industry, agricultural industry, e-commerce,
:04:01. > :04:08.that depend on keeping that relationship between the US, Mexico
:04:09. > :04:12.and Canada alive and well. Now I guess the focus goads towards
:04:13. > :04:19.renegotiating this. I'm just wondering, does Mexico think that
:04:20. > :04:23.has to be renegotiation and where will they try to renegotiate? I
:04:24. > :04:31.think that after all the criticism that came from President Trump and
:04:32. > :04:35.in my experience as director of the Arizona Department of commerce in
:04:36. > :04:39.the state of Arizona, you know you realise that there are things that
:04:40. > :04:44.occur throughout the period of 25 years that do need to be looked at
:04:45. > :04:49.comic e-commerce is one, energy, trade facilitation is the second,
:04:50. > :04:54.there are things in the agricultural space that might be strengthened, so
:04:55. > :04:58.at least it's important to have that conversation and I think we are
:04:59. > :05:05.getting to that place but I will tell you that even Congress is wary
:05:06. > :05:09.of having to vote on any adjustments and after so this could be a long
:05:10. > :05:15.process. We don't know exactly what shape this will take but it will not
:05:16. > :05:20.be easy for sure. A long process, that should keep us busy. Lots of
:05:21. > :05:22.at the moment. That's still at the moment. That's still
:05:23. > :05:26.unnerving the financial markets. Let's look at something happening
:05:27. > :05:29.here in London today where it's the time of year big companies
:05:30. > :05:31.are holding their Annual It's their big chance
:05:32. > :05:35.to face their shareholders and one of their major concerns is how much
:05:36. > :05:38.the bosses get paid - Pharmaceutical giant Astrazeneca
:05:39. > :05:55.holds its AGM today. The Chief Executive got a pay
:05:56. > :05:58.increase of 68% last year And that's AFTER his
:05:59. > :06:04.annual bonus was halved! Consumer goods maker
:06:05. > :06:08.Unilever is also They will be voting on changes
:06:09. > :06:13.to the way its bosses are paid - making more of it in shares
:06:14. > :06:18.as a performance incentive. Unilever's CEO made 8.4
:06:19. > :06:30.million euros last year. That was down 20% on 2015 -
:06:31. > :06:33.but a lot of the fall is down to the weak pound -
:06:34. > :06:37.his pay is set in sterling Leon Kamhi is Head of Responsibility
:06:38. > :07:00.at Hermes Investment Management. Thank you for coming onto the
:07:01. > :07:05.programme. I think these systems are fundamentally broken, if you look at
:07:06. > :07:10.any chart like this this tremendous scatter. Sometimes you have to pay
:07:11. > :07:15.with this high performance but in other areas know. Why is this, the
:07:16. > :07:17.schemes are way too complex, we have multiple schemes with multiple
:07:18. > :07:24.measures and the measures that we are using, some of the measurements
:07:25. > :07:29.are too short-term and not working. And thirdly, I'd say, the reason why
:07:30. > :07:36.pay structures are broken is, there's way too much in variable
:07:37. > :07:40.bonus and not enough in fixed bonus. And yet we're not getting bad
:07:41. > :07:48.performance. You mention the short-term. -- that performance.
:07:49. > :07:52.Earlier I wondered why the investors are not more aggressive, it's
:07:53. > :07:58.because they are part of the system! Is there an argument that these
:07:59. > :08:02.investors want these CEOs to be incentivised to hit short-term gains
:08:03. > :08:08.and they benefit from them? Maybe the targets need to be changed?
:08:09. > :08:11.There is a strong case to say that the system works were short-term
:08:12. > :08:18.returns. Why is that? Because you have the pension funds, they ask is
:08:19. > :08:22.that managers who achieve returns and monitor that on the short term
:08:23. > :08:26.basis. The acid managers then took to the company is about achieving
:08:27. > :08:31.returns and soon the whole system reaches out for a short term
:08:32. > :08:34.returns. So there is that case. This increased stewardship, responsible
:08:35. > :08:39.ownership by asset managers to think more about the longer term. And part
:08:40. > :08:43.of that is how we vote at remuneration. I would suggest that
:08:44. > :08:48.as an industry as a whole we don't pull our punchers when we see
:08:49. > :08:52.remuneration that is not right for shareholders and we do vote against
:08:53. > :08:56.it. You have seen that. You saw it with Thomas Cook this year. You've
:08:57. > :09:04.seen all the pressure before the vote has come to fruition with
:09:05. > :09:10.credits Wiese and GS K. When you see CEO salaries which are rear free 140
:09:11. > :09:16.times more than the average worker you do wonder what has to go. Thank
:09:17. > :09:19.you for coming in to talk to us. We'll see you soon.
:09:20. > :09:22.Let's take a look at some of the other stories making the news.
:09:23. > :09:25.Deutsche Bank could move up to 4,000 jobs out of the UK
:09:26. > :09:28.as a result of Brexit - nearly half its UK workforce.
:09:29. > :09:30.The possibility was raised by the firm's chief regulatory
:09:31. > :09:33.officer, and is the latest warning from a financial firm since the UK
:09:34. > :09:36.Currently, UK-based companies can conduct business throughout Europe,
:09:37. > :09:46.Listen to this. United airlines says it will offer passengers were
:09:47. > :09:51.volunteered to give up their seats on overbooked flights up to $10,000.
:09:52. > :09:56.That's in the wake of recent publicity problems, there they are
:09:57. > :10:02.dragging that passenger down the aisle of the plane. The offer came
:10:03. > :10:08.after rival Delta airlines outlined plans to offer $9,950 in similar
:10:09. > :10:09.cases. United said it would act to reduce overbooking and improve
:10:10. > :10:20.customer satisfaction. We had a quick tweet. Eric says, for
:10:21. > :10:26.?10,000, I would wait for the next flight!
:10:27. > :10:28.South Korean giant Samsung has reported its best quarterly
:10:29. > :10:30.for three years thanks to memory chips and TVs.
:10:31. > :10:33.Sharanjit Leyl is in our Asia Business Hub in Singapore.
:10:34. > :10:39.It is looking good for Samsung, moving in the right direction. Yes,
:10:40. > :10:43.with those results you would never guess it had battled a corruption
:10:44. > :10:47.It's all due to demand for memory It's all due to demand for memory
:10:48. > :10:52.chips for flat screen televisions and phones, it's given the company
:10:53. > :10:57.its best quarterly profits in three years, a 48% jump in operating
:10:58. > :11:01.profits to 8.8 billion for the period. It says it is relying on its
:11:02. > :11:09.new Galaxy smartphones to rebuild its reputation after the Note seven
:11:10. > :11:13.fiasco last year when it had to recall 2.5 million handsets after
:11:14. > :11:18.some caught fire. On top of that sum is and remains mired in scandal with
:11:19. > :11:22.its de facto head on trial over his alleged role in a corruption scandal
:11:23. > :11:30.that brought down the president of South Korea. He denies all of those
:11:31. > :11:35.charges which include bribery and embezzlement of shares in Samsung.
:11:36. > :11:40.I've had a look, more than 70%. Thank you. A real difference from
:11:41. > :11:47.the figures we saw from Higham day yesterday.
:11:48. > :11:49.Let's check in with the financial markets now.
:11:50. > :11:51.The Canadian dollar and Mexican peso bounced sharply
:11:52. > :11:54.after President Trump said he would not scrap the Nafta
:11:55. > :11:57.Tokyo shares fell snapping a four-day rally, taking the lead
:11:58. > :12:00.from US markets after the Trump administration unveiled the outlines
:12:01. > :12:03.of its tax plan which failed to inspire investors mainly due
:12:04. > :12:16.How is Europe looking, slightly down following fat lead from Wall Street.
:12:17. > :12:24.The rest of the news from Wall Street today. Two giants will be
:12:25. > :12:30.reporting results on Thursday, alphabet and Microsoft. A big part
:12:31. > :12:34.of Alphabet's revenue comes from advertising but it is looking to
:12:35. > :12:39.diversify and focus on things like hardware and cloud business
:12:40. > :12:43.computing. Where the company sees growth potential. Now Microsoft is a
:12:44. > :12:47.clear example of a company that is benefiting from cloud computing. And
:12:48. > :12:53.investors are expecting the bad part of the business will continue to
:12:54. > :12:58.grow. Also reporting earnings is forward and after two straight years
:12:59. > :13:00.of record sales for American's automotive industry investors are
:13:01. > :13:07.bracing themselves for a dip in sales problems. And finally am as an
:13:08. > :13:11.report on Thursday. The online retailer dominates e-commerce, and
:13:12. > :13:18.continues to invest in data centres, warehouses and video content. --
:13:19. > :13:27.Amazon reports. Justin joins us, always good to see you. Pleasure.
:13:28. > :13:35.Big problems in Italian, I think they say. Alitalia was hoping on a
:13:36. > :13:39.big rescue plan from Etihad, based in Abu Dhabi, it was its model,
:13:40. > :13:48.buying stakes in other airlines. It was going to put in to 8.2 million
:13:49. > :13:53.dollars. The Labour union voted no, thanks to cost-cutting problems,
:13:54. > :13:58.Etihad said goodbye. Remember BA and Iberia had a similar issue, huge
:13:59. > :14:01.amount of change so jobs had to go and they restructured it so it is
:14:02. > :14:06.now profitable and operating effectively. They had to go through
:14:07. > :14:11.that pain so they are now allowed to. Alitalia has always been a
:14:12. > :14:14.basket case. Not only the unions, the entire structure in Italy of the
:14:15. > :14:19.state and operations and pulling them away into the private world, it
:14:20. > :14:24.doesn't work that easily. Virtually any other airline would have been
:14:25. > :14:31.better. Etihad will be saying, I am Ofcom and find somewhere else to
:14:32. > :14:34.fly. President Trump's tax plan has disappointed investors even though
:14:35. > :14:41.it's been heralded as the biggest tax change in history. It was 250
:14:42. > :14:47.words! Remember when Ronald Reagan came out with his plan, incredible
:14:48. > :14:51.detail. There is no plan. It's just a concept, I thought. It's better to
:14:52. > :14:57.travel than to arrive, the markets had expected a good tax boost and
:14:58. > :15:02.they will no say, where, how, will that get through Congress? Because
:15:03. > :15:10.people will ask, was going to pay for this. The Republicans don't do
:15:11. > :15:13.borrowing. Justin, we will see related to talk about more stories
:15:14. > :15:18.in the papers including united airlines and their latest offer for
:15:19. > :15:29.overbooked passengers. That is still to come.
:15:30. > :15:36.We will meet the man who started the bank by entrepreneurs for
:15:37. > :15:50.entrepreneurs. Lloyds banking group has almost
:15:51. > :15:56.doubled its pre-tax profit in the three months to March.
:15:57. > :15:58.Boss Antonio Horta-Osorio, said the bank had delivered "strong
:15:59. > :15:59.financial performance" after reporting profits
:16:00. > :16:02.of ?1.3 billion Laith Khalaf is a senior analyst at Hargreaves
:16:03. > :16:19.Good morning. This is really good news, isn't it, for Lloyds bank? It
:16:20. > :16:25.certainly seems as though it has turned its fortunes around. Yet we
:16:26. > :16:29.still have that 2% owned by the tax payer, which is good news for the
:16:30. > :16:32.taxpayer, given the share price has gone up.
:16:33. > :16:36.Absolutely. Pretty good set of results. Taxpayers still have some
:16:37. > :16:40.money left in there. Taxpayers have broken even on the ?20 billion that
:16:41. > :16:46.was injected during the financial crisis. Probably a good indicator
:16:47. > :16:49.for the UK economy, as well. Lloyds bank is a canary in a coal mine, if
:16:50. > :16:54.you think about all the things it has done. It is domestically focused
:16:55. > :16:58.with mortgages and loans. The fact it has done well is probably a good
:16:59. > :17:00.sign to the broader economy, as well.
:17:01. > :17:07.Is it also a sign that the banking sector is moving away, once and for
:17:08. > :17:10.all, from all of the crisis, the financial crisis, and abusing it
:17:11. > :17:20.presented? Never say never when it comes to the
:17:21. > :17:25.banks. If you look at RBS, that is still a long way from being in
:17:26. > :17:29.private hands. 75% still owned by the government, still facing
:17:30. > :17:33.problems. And with Lloyds bank we have PPI rearing its head again in
:17:34. > :17:36.the last three months. It's probably a bit early to say we are totally
:17:37. > :17:39.out of the woods but things are looking better for Deloitte and the
:17:40. > :17:45.wider banking sector, as well. Low interest rates still a thorn in
:17:46. > :17:46.their side, as well. -- looking better from Lloyds bank and the
:17:47. > :17:57.wider banking sector, as well. In a press conference from the CEO
:17:58. > :18:07.from Lloyds bank, he doesn't expect any rise in UK interest rates. Quite
:18:08. > :18:11.tricky to predict. What do you do? The rest of the banking sector has
:18:12. > :18:12.fallen, so that might have fed into that. Quite interesting.
:18:13. > :18:20.That could be a good point. You're watching Business
:18:21. > :18:29.Live - our top story: The US president, Donald Trump, he
:18:30. > :18:34.has done it again, this time he has told Mexico and Canada that he wants
:18:35. > :18:36.to renegotiate, not scrap, the North American Free Trade Agreement
:18:37. > :18:40.despite during the entire campaign he said it was the worst trade deal
:18:41. > :18:40.ever in he said it was the worst trade deal
:18:41. > :18:45.ever in American history. Let's have a look at other markets
:18:46. > :18:50.have been faring. There has been an impact from President Trump's tax
:18:51. > :18:57.plan that he unveiled yesterday. His Treasury team did. Scant detail,
:18:58. > :19:01.really come on what he is proposing. 15% corporate tax rate, but no real
:19:02. > :19:05.idea on how to pay for it. Investors have reacted.
:19:06. > :19:07.It takes an entrepreneur to spot an entrepreneur.
:19:08. > :19:10.At least that's the philosophy of our next guest -
:19:11. > :19:17.the man behind a challenger bank with a difference.
:19:18. > :19:20.Rishi Khosla is a serial start-up entrepreneur, and so it's
:19:21. > :19:22.perhaps only natural that he came up with the idea
:19:23. > :19:24.of a bank for people who share his passion
:19:25. > :19:28.So in 2015 he established a bank for entrepreneurs -
:19:29. > :19:33.It's an online lender - and specialises loans to a range
:19:34. > :19:35.of businesses from fast growing companies to property
:19:36. > :19:40.Its loan book currently stands at around $576 million.
:19:41. > :19:45.Rishi Khosla, the Founder and CEO of OakNorth Bank joins us now.
:19:46. > :19:55.Thank you for joining us. How do you do this? What gave you the idea to
:19:56. > :20:02.start up a bank like this? I started my previous business in 2002. I went
:20:03. > :20:06.HSBC and Barclays to get a 100 K overdraft. They said they would only
:20:07. > :20:09.do that by putting a mortgage on my house. After not taking a salary of
:20:10. > :20:11.the two years, I was all in, I didn't want to give up my house.
:20:12. > :20:54.INAUDIBLE It was a slow process. It typically
:20:55. > :20:59.takes anywhere between six months for a no from a high street bank.
:21:00. > :21:05.And six to nine months to actually get funding. Those timelines have
:21:06. > :21:12.been extended because of Brexit. Now you have entrepreneurs who want to
:21:13. > :21:17.build their businesses. The best entrepreneurs have been building in
:21:18. > :21:21.this environment. Therefore we have found a good pool of strong
:21:22. > :21:27.entrepreneurs coming to us. That is what has taken our loan book to over
:21:28. > :21:34.half a billion today. That is since the referendum. The UK banking
:21:35. > :21:39.sector needed a change. How have they looked upon... I'm wondering if
:21:40. > :21:47.it is a bit of a club, a group of guys, little bit snobbish. We
:21:48. > :21:50.focused on what we needed to do. We focused on helping entrepreneurs.
:21:51. > :21:56.For us we don't spend time bothering about what other banks think of us.
:21:57. > :22:03.We just focus on executing like any good entrepreneur does. Where do you
:22:04. > :22:07.go from here? Are you hoping to expand? And how far?
:22:08. > :22:13.Bricks and mortar? If you look at where we have come
:22:14. > :22:16.from. We were zero 19 months ago, having that half a billion today,
:22:17. > :22:22.and I think we will continue lending up to those levels. We will build a
:22:23. > :22:27.book of several billion pounds over the next few years. The size of the
:22:28. > :22:31.gap within the UK market is large in terms of business needs, that we
:22:32. > :22:39.just want to become the go to thank for middle market growth companies
:22:40. > :22:43.and house-builders. -- do go to bank. You know how important it is
:22:44. > :22:50.to get the right funding at the right time. Absolutely. We will
:22:51. > :22:54.continue to be over capitalised. I don't know why you are still
:22:55. > :23:03.working. You invested in PayPal in 2000. These people who make money
:23:04. > :23:07.always need to continue making money. Go and live on an island
:23:08. > :23:11.somewhere with a boat. It is shaking up the industry. Do you think we
:23:12. > :23:18.will see more of the likes... Hopefully, yes. I think the banking
:23:19. > :23:22.market in the UK has been very much control for over 150 years. We need
:23:23. > :23:27.better choice. We need better service for consumers and
:23:28. > :24:08.businesses. Absolutely. It's good. Great to have you. Thanks very much.
:24:09. > :24:10.Justin Urquhart-Stewart, Director of Seven Investment
:24:11. > :24:20.10,000 grant to give up your seat. We put this out to Twitter. --
:24:21. > :24:32.10,000 grand.
:24:33. > :24:38.Kimberly said she would take an upgrade any day of the week. There
:24:39. > :24:42.is an incentive. I'm amazed. They always used to make offers. These to
:24:43. > :24:46.say we've overbooked, we have a problem, would you like to be
:24:47. > :24:50.upgraded, would you like some money? I had a great one years ago. British
:24:51. > :24:56.Airways made a mess of things. They said would you mind staying the
:24:57. > :24:59.Concorde? I had to think about it Concorde? I had to think about it
:25:00. > :25:08.for one second. It was a treat. Fantastic. Up to ?10,000. Airlines
:25:09. > :25:14.cannot afford it. It depends if you are on the seat,
:25:15. > :25:17.or at the check in desk. Exactly. United are saying we won't kick you
:25:18. > :25:21.out, they want you on the plane, so that is where we have this problem
:25:22. > :25:25.of them trying to get you out. The whole point of it was to get logic
:25:26. > :25:30.into what was going on so people understand. And if you are offered
:25:31. > :25:34.money to go somewhere else, so be it, why not? It is all about damage
:25:35. > :25:37.limitation. After all that has happened to them and other airlines.
:25:38. > :25:43.Other stories like this will be coming out. You think so? Yeah. We
:25:44. > :25:49.had the Rabbit story yesterday. The giant bunny who died. For
:25:50. > :25:52.unknown reasons. It might have been the food.
:25:53. > :26:11.CHUCKLES Thank you very much.
:26:12. > :26:13.Good morning. Milder weather is on the