The M&A environment is jumping with more new combinations than a monkey house in spring. Meanwhile, senior executives are getting millionaires’ salaries and others are striking out on their own to make it as entrepreneurs. I’m not talking about high tech or telecoms here, oil or automotive. I’m referring to the business of investor relations.
Indeed IR is in the embrace of a quiet revolution. It is not the lumbering upheaval of globalization. Or the internet’s rapid onslaught. This is change welling up from the inside: maturation, consolidation and the migration of talent.
1998 saw some blockbuster deals: Thomson buying Technimetrics and Georgeson’s IR division, for example. But that was just the warm-up act. Colorado IR veteran Carl Thompson predicts 1999 will be ‘the year of IR agency acquisitions’, and one New York service provider reports three offers a week. In Chicago, the Financial Relations Board was just sold to BSMG Worldwide. Florida’s Continental Capital & Equity Corp is going public and buying IR firms across the US. And gossip has it that Thomson is far from sated on the IR agency-buying front.
1997 also saw some of IR’s first generation move on to greener golf greens: Boeing’s Larry Bishop and Bell Atlantic’s Peter Crawford, for example, who both vow to stay active in business if not IR.
Some of Investor Relations magazine’s award-winning IROs were promoted out of IR in 1998: GE’s Mark Begor was appointed CFO of NBC, and HFC Inc’s Michael Wargotz is in charge of sorting out Cendant’s troubled Alliance Marketing Division as CFO. Other IROs are sitting on corporate boards, like AT&T’s Connie Weaver. Surely it can’t be long before a former IRO rises to the position of CEO.
It is clear investor relations has not just come of age, it has grown up. Look at Niri’s new senior roundtable compensation survey, which shows many of these senior professionals taking home annual pay checks of more than half a million dollars.
What does all this mean to corporate IROs in 1999? For starters, they may have fewer choices among IR service providers as consolidation surges. Just as Wal-mart signed the death warrant of mom & pop stores, so IR supermarkets may threaten small boutique communications shops. On the other hand, M&A in IR, as in any business, means senior consulting talent setting up afresh, offering all the advantages that personal service entails. Either way, IROs can be certain of one thing: a gilded future, handsomely paid, and perhaps pole position on the fast track to board level management.
