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At a glance Celebrating IR In hard times… …Keep on traveling |
David Carey, senior vice president of capital markets, might be known for his long and award-filled investor relations career at ARC Resources, but the accolades first started coming in as early as 2000, when he was at Gulf Canada and took home the award for best IR during a corporate transaction for Gulf’s acquisition of Crestar. A year later Carey took home the same award from the other side of the table – this time when Conoco bought Gulf Canada for $4.33 bn in 2001.
‘When I got the call that Gulf was being recognized for best IR during a transaction again I said, ‘But Conoco bought Gulf, Gulf’s gone – why are you calling me?,’ he recalls. It turned out that it was Carey’s efforts in keeping the investment community informed that had most impressed the analysts and investors who voted for the awards.
The years since have seen Carey and the ARC Resources IR effort recognized with no fewer than 15 IR Magazine Awards and countless short-listings, most recently taking home the grand prix for best overall investor relations (mid-cap), best financial reporting and best-in-sector gongs at the IR Magazine Awards – Canada 2016.
But Carey actually started out in geophysics – so what took him into IR? While he’d always been interested in the finance side of things, he cites the Reichmann family’s ‘mismanagement’ of Gulf Canada, coupled with the bankruptcy of Olympia & York (following the building of London’s Canary Wharf complex), as pushing him in that direction. ‘That happened while I was working overseas and I thought, Somebody from the finance end of things screwed up what was a really good oil and gas company,’ he says. ‘So I decided to go back to school and do an MBA in finance.’
A game of three thirds
Carey talks about his career in thirds: the field work that took him from the Gulf of Mexico to Egypt and back to Canada, followed by a variety of finance roles after his MBA – including stints as treasurer and chief financial officer of Athabasca Oil Sands Trust – and finally to IR. Now, though, with ARC Resources having celebrated its 20th anniversary, Carey is preparing for his next move: retirement.
So what does one of Canada’s most successful investor relations practitioners see as the key to his many accolades over the past two decades? ‘At ARC I’ve always had support from the top, though being a senior officer also means investors know I’m at the table,’ he explains. ‘They know they’re going to get the same answer from me as they would [from the CEO or CFO]. That’s important for investors and it’s helped with my credibility.
‘We’ve also had the support of the whole organization. If you think of IR, really everything we do is dependent on getting information from somebody else within the organization. We rely so much on the other departments to bring us the materials we can weave into our disclosure.’
Of course, Carey also maintains the staples of good IR: honesty, transparency, openness and responsiveness, as well as the simple – and often obvious – things that make a difference, such as: ‘If someone calls, you call him or her back.’ In many ways, these are the elements of any good relationship, he notes, and says that is really his most important IR lesson: ‘Remember that it’s a relationship game.’
This is a philosophy that remains in place regardless of whether an analyst has a buy, hold or sell rating on ARC’s stock, or what the current market conditions are. And, of course, the collapse in commodity prices has highlighted more than ever the importance of maintaining good relations with the investment community.
Keep on trucking
‘When times are difficult, we think it’s even more important to get out on the road; that’s when we can differentiate ourselves,’ Carey says, adding that ARC has continued to go to ‘pretty much every conference we’ve been invited to.’ There has been some cost-cutting, however, and he jokes that when ARC announced his retirement, it went into the 2015 Q1 release as CEO Myron Stadnyk ‘only half tongue-in-cheek’ suggested it would be cheaper than a separate announcement.
But while a few trips – such as the company’s most recent Asia roadshow – have been conducted by Carey alone rather than with a plus-one, the ARC investor relations team held around 300 investor one-on-ones over the year as well as 50 or so group meetings, lunches and dinners. In the lead-up to the July 11 anniversary date, Carey explains that the IR team had been sending out internal blog posts detailing different things that have happened at ARC over the past 20 years. As part of that, he also tallied his 15 years of travel with the company: ‘Fifty-five different cities, more than 20 countries, across four different continents.’
There are other ways in which ARC has already trimmed waste, too. For example, the company made the decision to do away with quarterly conference calls some years back. ‘One of the nice things about being a boring stock and hitting your numbers every quarter is that it’s pretty rare for there to be anything exceptional in the quarter worth having a conference call about,’ says Carey.
‘So instead of doing these, what we try to do between the Myron’s Minute videos and the roundtable I moderate with the chief executive and the CFO, is to answer all the questions we’ve been getting on the road or that may have come up after our quarterly release.’
A boring stock – with value
This is not the first time Carey has talked of ARC’s stock as less than exciting, describing the firm’s typical investor as someone who ‘appreciates a boring stock’ when IR Magazine spoke to him for the Investor Perception Study – Canada 2014. Given the turbulence in commodity prices, is that still the case?
Yes, says Carey – if anything, even more so. ‘Boring still needs to have value,’ he explains. ‘You can do a great deal of work looking at the indicators of performance in the oil and gas space. Obviously cash flow per share is a big one but another is balance sheet strength – in good times and bad – and that dampens the volatility in your stock. If you look at our stock, you’ll see we have very low volatility.’
So while commodity prices are the first question on investors’ minds, it’s encouraging, Carey says, that ‘recently, and this is a really good indicator of how investors have turned the corner, the questions have turned more toward, ‘OK, we’ve seen what you’ve done in a low-priced environment – you’ve hunkered down, you’ve protected the balance sheet and you’ve still managed to drill the company. What are you going to do when prices improve?’
Uncertain future?
In fact, part of ARC’s budget this year has been focused on future projects – even as some of its peers struggle to maintain the balance sheet. That makes it a good time to retire as the company turns toward the future again – which begs the question: what does retirement hold for ARC’s IR big-hitter? ‘At this point IR has been a part of what I’ve done for the last 20 years,’ Carey notes, so it’s not without some trepidation that he takes what he describes as ‘a bit of a leap into the unknown.’
‘I don’t feel that different from 30 years ago (as long as I don’t look in the mirror!),’ he says. ‘Except at 7.00 am on Saturday, because I’m tired at the end of the week and it is always a busy week, because you’re on all the time. At 7.00 am on Saturday 25 years ago, my wife and I would have been heading to the mountains to go hiking or skiing three weekends out of four depending on the time of year. So I’m really looking forward to hiking and skiing from Monday to Friday.’
Clearly, then, spending more time in the mountains, travel (without meetings), riding his pedal bike ‘and perhaps some volunteer work’ are all on the cards. ‘At some point it’s just time,’ Carey says. ‘Time to move on and spend time doing things other than spending time on the road.’
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A treasurer, a CFO and an IRO ‘Everyone’s a little bit different and there are so many diverse backgrounds coming into IR,’ says David Carey, senior vice president of capital markets at ARC Resources, on the IR endgame. He notes that, especially at large organizations, ‘exposure to the capital markets is a very important stepping stone in searching out those other, higher career roles. ‘But IR can also be a great destination and I think I realized – I guess in some ways when I joined ARC, at which time I’d already been a CFO and a treasurer – that what was important to me was that I didn’t want to be the person making the decisions. I wanted to be someone who influenced those decisions.’ |
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On his most memorable moments This goes back to sometime in the late 1990s, but I got the opportunity to present to Peter Lynch, who at that time had retired from Fidelity where he had run the Magellan Fund, one of the really big, successful mutual funds,’ recalls David Carey, senior vice president of capital markets at ARC Resources. ‘He was one of the first portfolio managers I was aware of who really became a household name and it was fascinating to be in a meeting with one of the icons of portfolio management from the 1990s. ‘We met with him in what was very obviously his private office – it was not in the Fidelity building, it was in an older part of Boston, in a small building overlooking one of the historic buildings. His dog was curled up in the corner and it very much felt as if we were meeting someone in his den at home.’ |
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Final roadtrip to CIRI As IR Magazine went to press, David Carey, senior vice president of capital markets at ARC Resources, was due to retire in early September, though his final date hadn’t been confirmed. His last event was in June, though, when he attended an investor conference in Montreal prior to CIRI 2016. Speaking to IR Magazine shortly afterwards, he said: ‘I’ve got a lot more investor meetings and one more quarter to go but as far as conferences are concerned, CIRI was my last.’ And as it was Carey’s last trip, ARC’s CEO Myron Stadnyk decided to tag along, ‘which was nice’ and also worked out well for CIRI. ‘Yvette [Lokker] called me from CIRI and the institute was looking for a keynote speaker for the Monday morning so I pitched it to Myron and he went for it,’ Carey says. |
New kid on the block
Bevin Wirzba, David Carey’s successor, spent 12 years as an engineer domestically and internationally (he holds a BS in civil engineering), working at Chevron’s head office on major commercial projects and on major M&A work, working as part of the team on the Chevron acquisition of Unocal.
He then returned to Canada to join M&A specialists Rundle, where he became familiar with western Canadian assets as well as relationship coverage for some of the major US players and Asian natural gas firms following RBC’s takeover of Rundle.
He was an outside hire, but Wirzba has actually been with ARC since January 2016 as senior vice president of business development, Carey’s first title at the firm. ‘When I depart, the IR portfolio will fold into [Bevin] and he’ll end up with a profile very similar to mine,’ says Carey.
This also means Wirzba’s already been on most of the road trips ARC has done this year – so how is he getting on?
‘Well, we did what you’re supposed to do,’ laughs Carey. ‘We hired someone younger and smarter than me!’
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ARC by numbers Awards won since David Carey, senior vice president of capital markets, joined ARC resources in fall 2001: 15, including five for best IRO (mid-cap) Team size: Five including Carey (soon to be Bevin Wirzba; see New kid on the block, abover) IR budget: Approximately C$1.5 mn ($1.1 mn), excluding Carey’s compensation, but including salaries, bonuses and benefits for other IR staff Percentage of IR budget spent on outsourcing: Approximately 25 percent Roadshows and conferences: ARC does between 10 and 12 non-deal roadshows a year with Carey spending 75-80 days on the road. He attends 16-20 conferences per year, including the ‘Calgary stampede’ Senior management and IR: CEO Myron Stadnyk spends around 30 days a year on meetings outside Calgary. CFO Van Dafoe currently spends around 15 days on IR, ‘but this will likely increase to 20’ Senior management and one-on-ones: The CEO and/or CFO attend about 70 percent of meetings. ‘Our CFO is just two years into the position, so we’ve been making an effort to have him meet investors,’ Carey explains. |
This article appeared in the fall 2016 issue of IR Magazine
