Investors always want face time with management. And how company executives approach IR has long been a topic of research for IR Magazine, examining the number of days dedicated to the program each year, what percentage of one-on-one meetings senior management attends and which member of the C-suite IR reports to – as well as doling out trophies to those senior management teams the investment community most appreciates each year.
Globally, senior management dedicates an average 47 days to IR and attends almost half of all investor meetings, with the CFO being the senior executive who devotes the most time to investor relations. There are cap size and regional differences – for example, the time spent on IR by CEOs decreases as companies grow bigger, while in Asia, senior management both dedicates more days to IR and attends fewer investor meetings. Overall, however, the trends remain true.
But what if you want to go beyond the average and join the ranks of award-winning senior management teams? What is it that sets some companies apart when it comes to C-suite investor relations?
High-ranking IR
This is in fact something IR Magazine examined in the 2018 Senior Management research report, looking at whether there was a difference in the amount of time senior managers spend on IR or the number of meetings attended by those at high-ranking companies – those in the US, Canada, Europe, Greater China and South East Asia Top 50 or Top 100 lists, and those outside these lists or unranked. What researchers found was that overall, ‘high-ranking IR does not seem to relate to time spent by senior management on investor relations’.
At the same time, however, ‘senior management at high-ranked smaller companies in both North America and Europe attend substantially more meetings with investors than their lower-ranked peers.’
At smaller Asian firms, senior management at high- ranking companies actually spend less time on IR and attend fewer meetings than those at lower-ranked firms. At larger companies globally, however, there is little difference between the percentage of meetings attended by senior management and the number of days dedicated to investor relations.
Institutional investment levels also have an impact on the amount of time senior managers spend on IR: a lower level of institutional investment (fewer than two thirds of shares held by institutions) means a higher number of days dedicated to IR – no doubt as top executives seek to increase institutional holdings. A higher level of institutional investment leads to senior managers attending a greater percentage of investor meetings.
But, again, the numbers don’t quite give us the formula for award-winning standards. Perhaps it’s not just about how much time is spent on IR or in meetings but also about a top-down approach to IR that filters through to the entire company.
Setting the standard
Looking at recent winners of the best IR by senior management categories across the US, Canada, Europe and Asia, what is striking about most is that when a company wins this coveted award, it is likely to have been short-listed – or won – in other notable areas.
Indeed, of the 28 awards given to senior management teams or individuals in Canada, the US and Brazil over the past three years, 64 percent went to companies in their respective top 10 lists. One fell just outside that in 11th place, while nine were outside the top 20. Cap size clearly also plays a part here: eight of the nine firms whose senior management took home a trophy for IR but failed to make their respective top 10 were small or mid-cap companies at the time.
And it’s not just rankings that show a dedication to a holistic IR program at companies where senior management is awarded for its IR efforts. More than 70 percent of winning firms also won or were nominated for at least one of the other top awards of the night – either best overall IR or best investor relations officer. In fact, almost 40 percent won or were nominated for both these coveted categories in the year they took home the trophy for best IR by senior management.
From the winner’s mouth
Two of the firms to have taken home best IR by senior management this year – Agnico Eagle Mines in the large-cap category in Canada and CMS Energy in the small and mid-cap category in the US – both won other key awards on the night and each notes the holistic, top-down approach to IR taken by senior management.
‘We believe the win by our senior management team is a reflection of the efforts of all our co-workers,’ says Sri Maddipati, vice president of IR at CMS Energy, which, along with its senior management trophy, was also short-listed for best overall investor relations (mid-cap) and best in utilities, while Maddipati was a joint winner of the rising star award. ‘Our senior management team is close to the business and so is our IR team: we are integrated with the strategy, financial and regulatory teams.’
Brian Christie, vice president of investor relations at Toronto-headquartered Agnico Eagle Mines, which took a hat trick of top awards in April (best IR by senior management – for the second year running – best overall IR and best investor relations officer, all in the large-cap category) as well as two more trophies for best financial reporting and best in materials, also notes the way IR goes across all elements of the company.
In fact, Agnico Eagle’s senior management made investor relations a priority from the start. ‘When the company was originally founded, we had a large retail shareholder base, and [founder] Paul Penna believed in always having a dialogue with that retail shareholder base,’ says Christie. ‘So that was something that historically has always been with the company – and Sean [Boyd, the CEO] has done a great job of maintaining that philosophy.’
The focus on IR goes beyond the CEO, CFO and president, however. ‘I have a mandate to bring out a number of my senior management team – going below the vice president level – to get exposure to the investor base,’ explains Christie. ‘A lot of my line managers give presentations to investors. And I think that’s what a lot of investors like: they like the ability to access the broader management team. For example, if I’m running a visit to one of our mine sites, it isn’t my CEO who’s doing all the talking. He might just stand up for five minutes and then turn it over to the operating team at that mine to talk to the investors.’
And what about communication from the IR team to senior management? Christie says he spends a lot of time with Boyd – either chatting directly or emailing on a daily basis.
‘There’s good flow of information, whether it be something we’re hearing in rumors from the market, or specifically something that an analyst has a concern about,’ says Christie.
‘There is very good overall corporate communication here. It’s a total team effort and we even work to make sure our people at the various mines understand the corporate strategy and what investors are likely looking for – so that we can ensure everyone’s on the same team.’
This article was published in the summer 2019 issue of IR Magazine