>> live from pier three in san francisco, welcome to bloomberg west where we cover innovation, technology, in the future of business. i'm emily chang. a check of the bloomberg top headlines. the s&p 500 has closed that a new record high as all three index is posted gains today. president obama said the u.s. economy is right on track, especially with energy. >> on energy, we have seen a revolution that is changing not just the economy but also changing geopolitics. and gas is oil

production up because of technological pledges that have taken place but we've also doubled our production of clean energy. >> oil futures up after the selloff. feinstein was the faa to tighten restrictions on drone pilots. in a letter, they say recent reports of close calls between drones and commercial planes are alarming. they are proposing criminal penalties. more reason for disney shareholders to smile. they are boosting the annual dividend by 34%. $1.15 a share. a stock covering around an all-time high posting record revenue and profit in the last this will year thanks to hits like frozen and guardians of the galaxy. and raising $500 million to start a second fun to invest in early growth tech companies.

they were oversubscribed three times. the first fund including oculus vr, salesforce. partners include gideon youth, the 49ers co-owner. a dela is leading his first shareholders meeting as microsoft ceo up in bellevue washington. haveority of shareholders approved his pay package which could be worth more than $90 million for the fiscal year. the advisory firm recommended shareholders vote down that package but the board was also easily reelected. arguing for more diversity in technology, reverend jackson will be joining us in the studio. cory johnson, you've been talking about the pay package all morning.

>> as it relates to other companies and other ceos, the third highest during this last calendar year. i think it's interesting that iss that represents the votes of so many mutual funds and pension , they have a good year. but they've had a crummy decade. for that reason they oppose this very high pay package for the incoming ceo. >> he's not coming in as the new kid on the block. >> if you look at someone like warren buffett, he is already rich but he is right in line with the shareholders. ella will be taking home guaranteed pay and bonuses every single year. as it relates to how the company is structured, they oppose the

deal for those reasons. >> some ceos will take one dollar a year and the rest of it in talk. >> they say stick with me, i will lead you to the promise land. he's taken some money off of the comparables not kin and parable to other ceos. the income inequality gap and those people that are driving the buses or the microsoft buses or cleaning their houses or cleaning their office buildings. that's what president obama had to say about what it means for the economy just a little while ago. >> when you look at the history of this country, when it is good and consumers feel like they have money in their pocket, it ends up not being bad for business.

most of you would agree with that. and we have a lot of good corporate citizens. lines even asend productivity and profits go up, wages and incomes have shrunk as a share of overall gdp. >> it's not his fault that there is income inequality, but we will be talking about the history of ceo pay and we think for theat this means country and a world where we see such great disparity. >> we will talk about this a little bit more. talking about apple, and it's day two of the trial with steve jobs being a key witness. the video recording of testimony he reported -- recorded before his death may be played. had a black and " white contract with record

labels and took great pains to protect them." they may testify as early as today. at issue is if apple violated and antitrust law by forcing them tos to force listen to itunes alone and blocking access to music from other services. the senior analyst just increased as apple target from 130 five dollars to $150 share. have valuation of $880 billion. why are you so optimistic? is coming from the blockbuster sales trends we're seeing in north america and china. we ran some checks and it looks like in china, we are the same sort of trends. particularly at the high-end, we are looking at two to three week

leadtimes. it's a great start for apple and we think it will be a block esther december. >> can you explain? >> i do not. >> i think this case is so interesting because it talks about the way that appleworks. the accusation, at least, is that apple purposefully kept consumers from using music that they downloaded on other networks and other formats. was a closed for the sake of security and simplicity or was it that we don't want your money or other networks to get any of it?

>> it is almost a decade and if you put yourself act then, we are talking about napster that was bearing the music industry. you could make the case that apple saved it. transform the music industry, really, then went on to transform the apps industry and the pay industry. as far as was it heavy-handed or not, what i saw was them pushing forward. >> apple says we do things to make things simpler for our customers. a lot of them had accounts with 30 networks were they were buying music legally and acquiring music legally and apple was keeping that music off their devices. is there a difference between the words that apple says and the practices that we need

customers off of our devices? music industry was very concerned about digital rights management so apple had an obligation to protect that content. whether or not it could've played nicer with real or not, i don't know. i know consumers had other options. but none of them were very good. >> apple could be on the hook for $1 billion in damages. 10 years in the making? pushing backle is against this. you don't want frivolous lawsuits coming up because they are aggressive about innovating and transforming industries. they need to resist this one. $1 billion is a drop in the bucket. this case in another itself from a financial perspective does not look material to us. >> the highest price target on the street?

thanks for joining us. we will be right back with more bloomberg west after this quick break. ♪

bezos has ao jeff succession plan for the company's next stage of leadership. he would not the who exactly that person is. this news coming from the ignition conference in new york this week. he also talked about the billions of dollars lost on his failures and how the e-commerce giant doesn't consistently turn a profit. so what in store for amazon's future? his errand boy, director of research you specializes in executive compensation. i want to start with you. who could replace jeff bezos?

who's at the top? few names at the top, including jeff wilke. the highest-paid executive runs the omer all consumer business. including jeff blackburn. there are a few names kicking around but what i want to point out is that bezos is 50. that is below the median age for ceos in the s&p 500. i wasn't going to crazy over this little nugget of information. gets hit by a he bus, life is what life is. you want to know that this company is so focused on one individual idea that it is the culture of jeff. you either love him or you don't work there.

>> and that conference, he tried to minimize that. how the culture is so ingrained in the institution that it would carry on without him there. even the chance of him getting hit by a bus, he talks about how much he hates to travel and how much he loves being at work. he is younger than a ceo -- >> exactly. he's not staying in one location all day long. we were thinking about pay compensation. bezos takes $81,000 a year? huge difference there. >> obviously he is the founder and his pay structure is more in line with what you saw for steve ulmer and bill gates. they have such a big stake in the company that the incentive for them is driving the stock price.

he's got a founder's pay package but the other guys, the guy that ones them is -- runs amazon web services, his pay package is $160,000 a year. the amazon culture is a cheap culture. the executives, their salaries are generally low. there are other executives and they do get equity awards and they do have a certain thing there. going back to the satya nadella situation, he did not have as big a stake as steve ballmer. bigwhat they gave him was a stake with a lot of incentive to really drive performance. won't receive unless they outperform the s&p 500.

again, on an annual basis, it's something where the equity package is going to be heavily influenced by the amount of stock he's getting that will of course be driven by the value you can get driving the microsoft share price. i'm sure he will share a lot of it with people that need it. at --ector of research thank you both. after taking on uber, senator al franken questions list. ♪ yft. ♪

>> welcome back to bloomberg west. senator al franken hasn't sent a

lyft asking them to clarify their policies. we spoke with cofounder and president john zimmer and how they plan to respond and what privacy changes might be in store. >> we further limited the number of employees that have access to personal information. steps, a customer service representative may access the information if they lost their phone in the car or say, can we check this last trip? there are other individuals that don't need access to that information and we make sure to review who has access and put additional limitations in place. controversye this grew not only over privacy but the retaliation that one of the coverage, iad that

.eard that your usage is that true? weeks, and better the rides are on the rise. year-over-year, they are up. there is a lot of competition. focused on our vision and what we are about has worked very well for us. >> you are both fighting for market share in various cities. huber has just launched the pool and you launch this back

in the summer in california. uberdo you feel about h pooling rides to undercut your market share? a greatnk new york is example of a market where public transportation actually works really well. you can get a two dollar ride pretty much anywhere. there are other markets that public transportation does not work very well. it takes twice as long. and just having a product is kind of one stat. and building a peer-to-peer type service. corner of what we've done.

it gives us a strong advantage with share ride. >> you have yet to really expand overseas. what are your plans their? >> there is a massive opportunity in the united states specific to the car ownership market. they are creating a better taxi. at is not what we are about. , what weon every year are building is an alternative to owning that personally. that used to be a symbol of freedom in the country. in the united states, the surface is being scratched. it starts from hey, i'm going

out and i don't want to drive. that is kind of the taxi replacement. now they are using it to commute to work every day. >> we are excited about how it is performing. there is much do about the rivalry between huber and lift -- uber and lyft. executive speak directly about it. admitted that he tried to thwart your fundraising efforts earlier this year. and i want to read for you a quote from the article. before youestors, decide if you want to invest, make sure you know that we are going to be fundraising

immediately after. >> the strategy didn't work. we raised 250 million. it has worked really well. when a competitor continues to name you and calls investors, i think there is concern about what we are doing and how it is succeeding. we are excited about it. >> john zimmer there with betty liu. we will be back after this quick break. ♪ >> time now for bloomberg television on the markets. go ahead and take a look at the major indexes. green across the board. averagejones industrial stocks making the big

gains of the day. ♪

>> i'm emily chang and this is bloomberg west. what is the secret for success? it is their nimble startup culture that helps drive innovation. can large companies learn something? now and been doing this i am curious about your progress. uit. ge to int >> nobody was more skeptical than i was. we want to implement this entrepreneurial management system.

i have been really surprised. the companies you mentioned as well as the hot up and coming startups. successfulve a prompt, you update. and you have one other person working for you. -- do we teach people >> a company like microsoft, they arguably missed some of the big technological shifts of the past 10 years. >> it's about if you are willing to change the whole blueprint. built around functional silos, not getting close to customers. want to foster that kind of innovation, you have to be willing to set up internal startups.

>> i have been thinking about amazon a lot this week. amazon is this culture of pizza boxed teams that you don't want a team starting a project that is more than one late-night pizza session away from being too big. that is part of the culture. they are cheap, small teams that work fast. what about when that approach is wrong? frombelieve culture comes the process. the way people get promoted. if you want to have a culture of small teams, you find a way to break it into smaller problems. you have to set that process decision from the top. when i go to corporate america, i meet with teams with a 25 or

30 person part-time committee. everyone got assigned there. .here is no ownership it you don't get assigned to a start up one day. >> diversity, we have seen a lot of dismal numbers coming out from apple. things -- where have you seen progress? we know these numbers are bad and we want them to be better. >> diversity is the canary in the coal mine. you ask yourself if this was really a good selection process. >> if you walk into a room with straight white dudes like me and say you did not get the best people possible, you didn't even try.

>> the odds are extremely low. just do the math. i think companies are starting to take this seriously but it's a slow progress. i believe the process we use determines who shows up. people don't apply when they don't think -- >> the blind screening process. womenave a low number of even though they are concerned about the problem. take a listen to how they've changed their process but won't go so far as to blind screen. >> how heavy change the interview process in subtle ways to make sure that you are getting the best people and you're not discriminating? >> one thing that has changed recently is that we have a female partner in every one of the interview rooms. >> why not completely blind screen everyone?

>> i would not observe their interaction. don't getel like they a good read on someone if you don't meet them. >> i couldn't agree more. a lot of the selection processes are multi-staged. how about review the written applications? that is what we do? we have people submit the written form and create the videos. applyingure everyone has to go through the same process. and people understand how the process works. >> any companies doing this well? >> i wish i could. i would say most of the companies that talk to me about they talk about the problem and not as interested in talking about solutions.

>> not one single company? name one. not i wish i could. >> it is something to aspire to. your startup conference happening this weekend. think you for joining us and having us back on the show. reverend jesse jackson is pushing for more diversity in technology companies as well. he is meeting with microsoft and amazon and is with us coming up. ♪

>> you are watching bloomberg west where we focus on innovation, technology, and the future of business. he majority of microsoft's workforces mail and white. no surprise there. the numbers tell a broader technology story where companies

like yahoo! and facebook have similar percentages. the founder and president of the andbow push coalition reverend jesse jackson has been meeting with tech ceos. he joins me now from seattle. cory johnson is still here. .ou met with satya nadella what did he have to say when it came to diversity? this is a guy who's big public mistake was saying that women should not ask her raises. >> i think he regrets having made that statement. and also see that locking down people of color represent market and not the cost of doing business, it is achieving growth. while we focus on stem and that, 60%-70%ond -- the whole range of

workers can be employed in these injuries trees. have at interesting to conversation with a guy of indian descent? microsoft, and indian president, female cfo and african-american members of the board with a wide attorney -- white attorney in terms of mr. grant. i think they do get it and they see that the market is like that. so his talent and creativity. and also take a hard look and begin to invest in stem development. 600 children studying stem.

need their school to do just that. startere is a pipeline to with a pipeline. whereairman of the board they teach computer science and they teach engineering. and otherda a&m schools, they must see the value in such a relationship. consuming and buying the product. with -- theyeaking say tech executives can't blame this on a pipeline problem when the pipeline has changed. amazon executives, they tell us

who they are meeting with and what is your message with amazon? amazon has been the most reluctant in contrast to microsoft. amazon is all white, eight men into women. -- and two women. have a lot of shovel ready talent on the market right now. for people like luke capital and williams capital to be part of the offerings. we have a talent surplus. andant to connect with them is not a zero-sum game. >> on of the things that make silicon valley work is not just the innovation, the ideas, and the people.

but the university of california at berkeley, stanford, also the peninsula. bringing students to the workforce. and with tuition rising, it more people of color and more women out of those schools are not able to pay for those. how does that lessen the possibility of having workers of color? that is a problem and should be the forgiveness of student loan debt. the boomerang situation. soon it can be a big deal. and also, we find that we cannot just limit those schools. john comes from florida a&m. for the founding of

google, david drummond is an african-american. there is no talent shortage. working on an insecure basis, they can learn stem. we will be in this for the long haul. >> are you saying you are against the program? it's costing african americans and people of color jobs in silicon valley? they are not using workers and training them at home. that is the real point. >> i want to ask you about your conversations with tim cook because you have been speaking with apple specifically. we have been speaking about

satya nadella, a hefty pay package. what about your interactions ?ith apple and tim cook >> we hope to meet with tim cook soon. the pleasure of having offshore tax havens having the tax breaks brought back home. they have not been as sensitive as they must be. truckers and advertising agencies and marketing. this area. and it can be used here as well.

>> thank you for joining us, president of the rainbow push coalition. pandora shares have taken a beating this year. will a new look help refresh growth? earlier from the music streaming services cfo next. ♪

>> welcome back to bloomberg west. i'm emily chang. it music streaming service pandora is getting a new face. the company rolled out a redesign for its mobile platform available to 3% of iphone and android users right now. but it will take effect for everyone over the next few months. we talked to michael herring at the technology conference in scottsdale, arizona and started out by ask him about the latest update. >> we are really excited about this new rollout. u.i.nd-new you why -- about personalization pieces inside the product. it helps you look and identify how you find songs, stations, really discover new music. change the way you establish your profile. it really services a lot of innovation that you've been doing for years.

driving the music that we play for listeners and you can see what the personalization looks like. >> and this predicts user growth? >> we see a lot of growth in our service. we are at 5 billion hours a quarter now, 76 million users. the hours are the lifeblood of our ability to drive our business. buying gauging people more often and through more devices, it helps us build loyalty to a product and helps build the business. is big for pandora and so is automobile listening. spotify signed a partnership with uber so listeners could listen to that driving in uber cars. why is listening to music and cars so important? >> it's a big part of the auto experience. half of radio listening occurs in the car.

our strategy has been addressing in car listening through personal automobiles. ,e have been working for years we have over one third of all autos that will be sold this year coming with pandora integration. and so that has been our strategy. it from a business development perspective, we have a lot of partners. there are a lot of different experiences out there. spotify is a very different service. pandora really addresses what is ideal. >> the hiring of sarah clemens used to run m&a for linkedin. what will we see for strategy for pandora? >> sarah has a broad mandate. she is the chief strategy officer and looks at a lot of different things pandora can do.

music listening lean back experience that can be offered. and addo we take that on capabilities to enhance the listener experience and the connection with the artists themselves? in order to improve their own careers. hired lars murray to run that. labels, managers, and artists that used the platform of pandora to debtor plan their own careers. we try to help with the music ecosystem. we will look at other kinds of content and maybe there is m&a involved in that and it is mostly organically developed. how do we stress the opportunity with pandora? >> do you ever envision pandora

being part of a larger organization? part of microsoft, facebook, a bigger tech company to become more competitive. >> i think we are very competitive as is. i think it is way too early to think about that. we are at the opportunity. the mobile advertising market is just emerging. think 9% of radio in the u.s. will grow substantially. we've hired a full management team and it's all in place ready for the next phase of pandora's growth. i think it's an independent company and we can do a lot of things that you couldn't do if you had other masters or other things. all we care about is the music experience. the best listener experience we can possibly provide to our listeners. we're not trying to sell you a sell, we're not trying to you an operating system. we are just trying to play the right music for the right person at the right time.

and it is time now for the bwest byte where we focus on one number that tells a whole lot. cojo, what do we got? >> 3 million. 3 million people worldwide have neuron disease or quadriplegia like stephen hawking. intel assigned a team to improve the sensors that professor hawking uses to communicate. it's so well known because of stephen hawking. it is free software to help the more than 3 million people with that affliction. the human race is at risk because ai could become so advanced we could not keep up. were not advanced enough for intel was able to help him out. intel is now making it free to the world. >> that's an incredible story. ask for watching this edition of "bloomberg west." we will see you later.

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