>> live from pier three in san francisco, welcome to bloomberg "west." i am emily chang. here is a check of the bloomberg top headlines. president obama has been meeting with ceos of the business roundtable in washington. while there, he spoke about the possibility of reforming the tax code. >> there is definitely a deal to be done. i think two big hurdles that we will have to get over. the first is the classic problem which is people are in

favor of tax reform in the abstract and sometimes more concerned with tax reform in the specifics. the president also told business leaders the plans for immigration reform will help the u.s. economy. steady progress of science in the recovery process for the economy. adp numbers went up. a new york city startup publish the content of the adp report for minutes before the scheduled release. -- four minutes before the scheduled release. the upcoming sony movie "annie" has been removed from some filesharing websites. this is according to a person a millionaire with the situation. another posted online after it was hit by hackers. they have offered employees identity protection. amazon has sold the biggest bond offering ever issuing $6 billion

worth of note. some will yield nearly 5%. amazon will likely use the money to emphasize spending liked rounds -- like drones. leading the first shareholder meeting in washington. shareholders have approved his pay package, which could be worth more than $90 million for the fiscal year. had recommended shareholders vote on the packet. the board was easily reelected. ceo steve ballmer and the reverend jesse jackson were arguing for more diversity. at inl be joining us studio very soon. joining me now is cory johnson. you have been talking about the pay package all morning.

you do not think it is very fair for an incoming ceo. why echo >> i think it is interesting to look at this as it relates to other companies and other new ceos. is interesting the voteh represents of so many neutral pension funds opposes the pay package is too rich for a company that has underperformed. they oppose an very high pay package for the incoming ceo. difference, make a coming in as the new kid on the block? >> one issue is how much it is guaranteed. if you look at someone like he is right in line with the shareholders. taking homea guaranteed pay and bonuses every single year. it is a hard job, don't get me

wrong. i think as it relates to how it is structured, they have opposed the deal for those reasons. >> how it has a compared to other tech ceos? some will take one dollar and the rest in stock. he says stick with me and i will take you to the promised land. not an comparable to other ceos as well. --in comparable to other ceos as well. i thought it was interesting what president obama had to say as it relates to the issue of the income inequality gap. what ceos have to say to the people driving the google buses or microsoft buses or cleaning their houses or office buildings. what president obama had to say about what that means for the economy. >> when you look at the history of the company, when wages are good and consumers feel like they got money in the pocket,

that ends up being good for business, not bad for business. i think of the few would agree to that. we have a lot of good corporate citizens. unfortunately, the overall trend wages and incomes have shrunk. , it is not hisa fault there is income inequality. we should think about what this means for the country. a world that has seen such great disparity between what some people make and what the rest are not making. >> we will talk about this the rest of the show. talking about apple. the to -- day two of testimony. a video recording of testimony before his death may be played for the jury this week. according to a transcript made a quick yesterday i'm a jobs had

black and white contracts with record labels and took great pains to protect them. at issue, whether apple violated antitrust law by forcing customers to use an ipod to download music from ipod and itunes alone and blocking them to music from other services. joining us is a senior analyst justnp securities who increase the apple target from $135 to $155 per share. why are you so optimistic? >> misses coming from the blockbuster sales trend in north america and in china throughout the kickoff to the holiday selling season. we ran some checks and turns out in china we are seeing the same sort of trends here.

particularly at the high end. looking at 2-3 weekly times on all three of the major carriers for the 100 28 gigabytes phone. a great start for apple. >> you do have some apple holdings yourself. can you explain? >> i actually do not. >> i think this case is interesting because it talks about the way appleworks or at least under steve jobs. the accusation at least is that apple purposely kept consumers from using using they downloaded on realnetworks and other formats on their ipods to make it a closed ecosystem. the question is whether they were closed for the sake of security complicity or the sake of we want your money and not real numbers to get any of it. what do you think that says about apple's culture then and how does it relate now.

>> you have to go back quite a ways and times. we are talking about napster. you can make a strong case that apple saved it. transformed the music industry really and then went on to transform the apps industry and now transforming the pay industry. i would say the innovation apple was undergoing then is alive and well today, one key take away. as far as heavy-handed or not i'm a what i saw was them pushing forward with new tech ologies. things toays we do make things simpler for our customers. a lot of the customers had accounts with real where they were fighting music legally and acquiring legally and keeping the music off the devices. between a difference

the words and practices, which is we keep customer he music off the devices? >> what i recall is the music industry was very concerned about digital rights management so apple did have an obligation to protect the content. whether or not they could have i am not entirely certain. i do know that consumers had other options. if they wanted to get mp3 players to play the music, they could. none of them were very good. >> what do you think it will actually come to in this case? 10 years in the making. >> what i like his apple is pushing back against this. you do not want frivolous lawsuits coming up. a billion is a drop in the bucket in the grand scheme in terms of a $140 billion allen chief. this case does not look material to us.

>> highest price target. thank you for joining us. right back with more after this quick break. ♪

>> welcome back to bloomberg>> "west." emily chang. steve bezos has a plan for the next change of leadership. he would not double to exactly that person is. this coming from the ignition conference in new york this week. he also talked about billions of dollars lost on his failures and dimone eve -- e-commerce does not -- giant does not often turn a profit. joining us is the director research who specializes in executive compensation. i want to start with you. who could replace jeff days

those? -- jeff bezos? >> there is a few names, one of them being jeff wilke, the highest-paid executive at amazon and runs the overall consumer business and has been there a long time. there are other names jumping out including jeff last burden of handles the acquisition side of things. the only thing i would want to 50 andt is bezos is that is below the median age for ceos in the s&p 500, so i was not going to crazy over this nugget of information. this company is so focused on one individual idea. death.he culture of

is something he really try to minimize it. showing range and institution. it would carry on without him there. of notthout a chance getting hit by the bus, he talks about how he hates to travel and loves to be at work. younger than the average ceo. exactly. not thing one location all day long. we were talking about pay compensation earlier. $90 million pay package approved at the shareholder meeting today. jeff bezos takes $81,000 per year. huge difference. >> a very different pay structure. obviously he is the founder. his hate structures more in line with steve ballmer and bill gates. very low salary. they have such a big stake that the incentive is driving the

stock price. >> shouldn't that be the incentive for satya nadella as well? >> he has a founder's pay package. the other guys we were talking about, his pay package is 160,000 per year. these guys, the amazon culture is achieved culture. you can see that in the pay package. >> the amazon executives, their salaries are generally low. other executives typically not make you more than $200,000 but they do get equity awards. going back to the satya nadella situation, obviously he did not have as big of a stake a steve ballmer or bill gates. to this day he still does not. what they gave him was a big stake with the ability to drive

the equity. >> he will get 18 million of its guaranteed? >> again, on an annual basis. his package will be heavily influenced by the amount of stock he is adding, which will value of thethe microsoft share price. i hope you is happy with it. -- he is happy with it. >> thank you very much. senatorking on uber, all franken questions l -- al franken questions lyft. ♪

>> welcome back. i am emily chang. senator al franken has set a sent a letter to lyft asking to clarify the policies. he sent a letter to the ceo asking him to respond and what changes may be in store. further limited the number of employees who have access to personal information and put additional steps behind getting into that information. it they lost their phone in the car you can check the last trip, i think it was miscalculated. there are other individuals that do not need access to that information and have made sure to review who has access to it. >> moving on to the business, i have read reports that ever thee the controversy over retaliation that one of the

executives retaliated against the press for negative coverage, i have heard the usage and have seen a spike in the number of people using the app. is that true? >> we continue to have better and better weeks in terms of how many users are using this is him. the past two weeks we have had our best two weeks. we are on the rise over the past year and a half. rights are up five times along with revenue. es are up five times along with revenue. there is a lot of talk about the competition, the back and forth between us and the competitor. they invoke us on our vision and what we're focused on has worked really well for us. talk there is a lot of about the competition because you are both fighting for market share in various cities. launched in new

york. you launched back in the summer in tablet you. how do you feel about uber borrowing the concept of cooling rides and trying to do this to undercut your market share? a great example where public transportation works really well. you can get it to dollar ride pretty much anywhere. i used to live in manhattan. there are other markets where public transportation does not work very well. just about 5% of turks take place on public transportation and take twice as long. we are focused on bringing the promise of transportation, affordable and convenient transportation to the rest of the country and is working really well. just having a product is one the culture and experience to build a peer to peer type service where multiple people are getting in one ride is at the core of what we have done since the first company in

2007. this gives us a strong advantage to share ride. has a head uber start internationally. you have yet to expand overseas. what are your plans there you go >> there is a massive opportunity in the united states pacific to the car ownership market. i think what people thought that they were doing in an early day is creating better taxi. about $2 trillion every year spent on personal vehicles. what we are building is a true to owning abute personal vehicle. it has become a massive burden. in the united states i think this surface is being scratched out what the opportunity is. if they look at the cases of ft it starts from i am

going out and might have a drink and do not want to drive and the taxi replacement but now we're hearing they are using it to commute to work every day. line nowou expand the that uber is here into new york? right now butthat definitely excited about how it is performing in california and looking forward to expanding. >> as you say, there is much to do about the rivalry. not all generated by the media. he openly admitted he tried to thwart your fundraising efforts earlier this year. te fromto read a quo the article. the four you decide whether to invest in with, make sure you

know we will be fund raising immediately after. >> the strategy did not work. he raised 250 million after going out to raise 150 million. we choose to focus on what we're doing and that has worked really well. when a competitor calls ispetitors, i think there concern about what we're doing and how it is succeeding. we will continue on the path we're on and are excited about that. >> the cofounder with our own betty liu. back after this quick break. ♪ 26 minutes after the hour which means bloomberg television is on the markets. i am matt miller. one to get you caught up on where stocks are trading after the biggest ane of the month yesterday. we are seeing green across the screen again. the s&p 500 up .25%. the dow jones gaming just about

14 points right now at 17,008 hundred 94. the nasdaq up about .2% of 4765. quick rate and back with more bloomberg "west." -- quick break. ♪

like i am emily chang and this is bloomberg "west." successthe secret to for start up companies? up.n it is the start can large companies learn something? of the leans author startup and founder of the lean startup movement. worked -- you have worked with several big companies from g2 into it -- ge to intuit. >> no one was more skeptical theyi was when they said

wanted to implement this strategy. often the issues are often the same. you have a big company. how do we teach people to become entrepreneurs and act in an entrepreneurial way? the new ceo. microsoft has arguably missed some of the big technological years.over the past 10 how does a company like microsoft change? >> i believe they can but it is about how can you change the blueprint? so many of the modern companies are focused on people doing their job, not think the big picture and getting close to customers. if you want to foster the innovation, you have to be willing to set up internal

startups and there is a lot of detail for how you do that. talking toeen microsoft a lot this week. i have spent time at the facility this week. amazon is a culture pizza box team. you do not want the team more than one eighth the box away from being too big. everyone at amazon is like that. they are cheap, small teams. what about when that approach is wrong and that is part of the culture you can change? >> i believe culture comes from the process and accountability decisions you make. the way people are compensated and get promoted. if you want culture of small teams or when you have a problem you have find -- you find a way to break it down, you have to be willing to set the process decision from the top. i think what is interesting is when i go to corporate america these days i will meet with teens and said it in a room with

a 25 part-time committee. assigned there. there is no ownership, a sense that this really matters and determined to make it work. you do not get assigned to a start up one day. that is not the right way to try something new. of dismal seen a lot numbers coming out of the companies from amazon to microsoft. what kinds of things -- where have you seen congress when it comes to diversity, other than the realization that we know these numbers are bad and want them to be better but what are they doing to make them better? >> diversity is the canary in the coal mine. you see the homogeneous outline. you ask yourself if it -- if it is really a selection process. withu walk into a room white guys and say you did not get the best people possible,

did not even try? >> what are the odds that they happened to look like the person doing the selection. the audits are possible but odds are strangely low -- it is extremely possible but thoughts are extremely low. i believe the selection process we use determines who shows up. people do not show up when they do not believe they will be select it. >> one think you have advocated for is a blind screening costs us. they have a low number of women founders and they're very concerned about the problem. take a listen to how they've changed the process that will not go so far to blind screening . >> how have you change the interview process in subtle ways to make sure you are getting the ?est people, not discriminating >> one thing that has changed recently is we have a female partner and every one of the interview rooms. >> why not blind screen

everyone? >> because then i could not observe their interaction. >> they feel they could not get a good read on someone. is that fair? >> i cannot agree more. it is important to recognize a lot of these are multistage. how about review the written application line? that is what we do with any sort of conference. we have people submit a written form and have them create a video. we make sure every person applying has to go through the same process. you do a lot of work to make sure people understand how it works. he will do not assume there is some sort of bias. >> any one you can point out doing this well? >> why can't you? don't know. i would say most companies that talk to me about this, which is talky small number, people about the problem but not interested in talking about solutions.

most companies think making the changes is too hard. i cannot name a single one. i wish i could. >> you know me, mr. positive. always something to aspire to. >> the conference happening this week. thank you for joining us. author of the lean startup. reverend jesse jackson pushing for more diversity and technology companies as well. meeting with microsoft and amazon coming up. ♪

>> you are watching bloomberg "west" where we focus on innovation, technology in the future of business. the majority of amazon's work worse is male and white. the numbers tell a broader

technologies story where companies like yahoo! and facebook have similar percentages. what can be done to increase diversity? the reverend jesse jackson has been meeting with tech ceos and was at the microsoft shareholder meeting. he joins me and cory johnson. .ou met with satya nadella what did he have to say when they came to diversity? this is a guy who's big public mistake was saying women should not ask for raises. >> i think he regrets he made that it meant. thosek they will see for two belowomen and color represents market locations. not really the cost of doing business but the key to growth. there is an opportunity deficit. [inaudible]lks 60%-70% of jobs are

marketing and security forces and a whole range of workers and industries.hese >> reverend jackson, is it interesting to have that's guy?rsation with the does he get it more because he is a minority? youctually in microsoft have an indian president and female cfo and african-american chairman of the board and --[inaudible] i think they do get it. i think they see the markets is lacking and so is talent and creativity. we also talked about that. also want to take a look at stem development. a school here and 600

children are studying stem and very excited about it. she is teaching them in school to do just that. also there is a pipeline for black colleges. a pipeline of investment and the intern road. the chairman of the board is john thompson. engineering. these can be a real quiet mind but they must see the value in such a relationship. in buyingr consuming the product. under indexing in terms of relationships. an we were just speaking to author very concerned about this. we were just speaking to an author very concerned about this. the numbers have not changed.

you are meeting with amazon executives. who are you meeting with and what is your message to amazon cap go >> amazon is the most reluctant in contrast. amazon is all white, eight men and two women. they are not using black financial services. there is a lot of talent on the market right now. for people like williams capital to be a part of the servicing of the debt offerings. we have a talent surplus really. the myth has been they cannot find us. rainbow push has found them. when we connect we all grow. it is not a zero-sum game. >> one thing that has been said that make silicon valley work is not just the innovation but

universities, university of california berkeley that will bring students choose the with tuition keepingt seems to be more people color and more women out of the school unable to pay for the tuition. to what degree does that start to lessen the possibility of having tech workers of color that goes sometimes student loan debt is greater than credit card debt. that is the problem. forgiveness of student loan debt could be a great way to end the boomerang situation. could be a bigbt deal in terms of the economy. also, we find they cannot just limit it to the schools. john thompson comes from florida a&m, the guy who rolled up the

papers for founding of google. there is no talent search. are looking for workers from out of the country who work on a very unsecured basis. outh here that can learn stem right here, right now. we bought stock in these company to be in for the long haul. >> are you saying you are 1b1 program?h-1 >> necessarily recruiting workers from abroad and not using the workers at home. that is the real part. >> i want to ask you about your conversations with tim cook because you have been digging specifically about pay disparity issues and what they pay security guards.

you have been speaking about hefty paylla, very package. what happened in your interaction with apple and tim cook around the issue of pay? >> hoping to meet with tim cook soon. we did meet yesterday with satya nadella. i think that is a big deal. for too long become pennies have had the pleasure of having offshore tax havens. getting government contracts. toy have not had a sense will grow together. truckers and advertising agencies and marketing, businesses that are no longer this together. we are all in the era and should be a part of it. i want the government to play a role in demanding the equal opportunity employment be used here as well. jesse jackson in

washington on the day of the shareholder meeting. thank you for joining us, president of the rainbow push coalition. yorkcrumpton is in new with a preview coming up at the top of the hour. >> the result of the fed asia books coming up at 2:00 washington time. the anecdotal reports from the districts. by the founderd of s&p. i will see you in a few minutes. back to you san francisco. lex thank you. pandora shares have taken a beating this year. -- thank you. acquisition? we hear from the music streaming services ceo next. ♪

>> welcome back to bloomberg

"west." a new face.etting the company just rolled out a redesign for the mobile platform only available to 3% of iphone and android users right now but will take effect for everyone over the next few months. leslie picker sat down with the ceo michael harry at the credit suisse tech knowledge he conference ins got stale, arizona, and started off by asking him about the latest update. >> we're really excited about the new rollout. it is focused on servicing the personalization pieces inside the product, so it helps you look and identify how you find the songs on stations, find new songs and discover new music, change the way you establish the profile. it really services the innovation we have been doing for years but behind the scenes

driving the music we play. now you can see what it looks like. >> you predict this to improve user growth -- go >> we have seen a lot of hours growth in the service. 5 billion and a quarter. we want to continue to grow that. the hours are the lifeblood of the ability to drive the business. by engaging people more often and more devices and more part of their day, it helps build the loyalty to our product and help told of business. recently learned spotify signed a partnership with co uber. why is your strategy and listening to music and car so important for the bottom line caps off >> music is a big part of the automobile experience in

the united states. about half of radio listening occurs in the car. half of the strategy has been addressing this through personal automobiles. we are in a third of all autos that will be sold this year that will come with pandora integration in it and over 8 million people activate the integrations. that has been our strategy. from of business development perspective, the of a lot of partners. some exclusive to pandora, other shared with music services. spotify is a very different service than pandora and we think pandora addresses what is ideal about auto listening as we turn it on and let it play. let's another announcement you made is the hiring with the linkedin ceo. the chiefs

strategy officer. we have built huge gale in the audience and have the best use experience that can be offered. how do we take that and add on capabilities to enhance the listener experience, enhance the connection with artist themselves? a lot of artists use the platform in order to improve their own careers. one of the first initiatives is the music industry group. a new artist to better plan their own careers. we are trying to lift this. atwill also look international and other types of contents and maybe there is merger and acquisition involved in that it's maybe it is mostly organically developed but the idea is to really see what is theible, how can we stretch

possibility of pandora? as a you ever view it larger organization? part of microsoft, facebook to become more competitive? we're very competitive as is and think it is way too early to think about that. at the beginning of the opportunity. the mobile advertising market is just beginning. 9% of radio in the u.s. and think it will grow substantially. we just got the management team in place. it is all in place and ready for pandora growth. independent company we can do a lot of things. about is the music experience, the best listener experience to provide to the listeners. we are not trying to cellular phone, operating system, just trying to play the right use it for every person at the right time. >> pandora ceo michael haring.

time now for the u.s. to fight -- bwest byte. te is 3y's byet i million. the technological makeover or stephen hawking because of intel. an event in london intel announcing free software to help the more than 3 million people without affliction. >> he also said the human race is at risk of becoming extinct because it could become so advanced we cannot keep up. >> apparently the system was not advanced enough for him and was able to help out and give him a makeover of the system. they are now making this free to the world. >> thank you. thank you for watching this edition of bloomberg "west."

we will see you later. ♪

>> from bloomberg world headquarters in new york, this is bottom line. the intersection of business and economics with a main street perspective. we begin with breaking news as the release of the u.s. federal reserve snapshot on the american economy. peter cook is standing by with the details. peter, good afternoon. >> good afternoon. if colleagues are looking for signs the u.s. economy is gaining traction right now they will find it in this latest beige book. it was compiled through november 24 and paints a