Interactive investor kit
Put yourself in the shoes of the poor shareholder who wants to save trees and save you time and money by accessing electronic versions of annual reports, quarterly reports, presentations and other shareholder materials. But downloading them one by one can be a drag, especially with a slow modem connection.
Enter Nokia and a time-saving idea: the interactive investor kit. This shareholder shopping cart will soon be introduced as part of Nokia’s newly revamped web site. Simply tick off the items you’re interested in and they’re automatically bundled together in a compressed zip file. You’re told exactly how big the file is and how long it will take to download.
‘The idea is to make it easier for investors to get written materials,’ says IR manager Bill Seymour. ‘Rather than navigating around the entire web site downloading bits and pieces, they’ll have a one-stop shop for everything we think is most pertinent to investors.’
The shopping list will include the usual suspects such as annual and quarterly reports along with slideshows and Excel spreadsheets. The latter are ‘especially popular with professional investors,’ says Seymour. ‘They copy and paste them into their own models.’ There will also be as much non-financial content as possible in the form of white papers and presentations from industry events like Comdex.
Nokia’s interactive investor kit is just the latest step in its ongoing web site overhaul. Another neat feature is Sharemonitor, a new Java-enabled, interactive stock charting tool.
Nokia also gets credit for being one of the first companies to index the Q&A portion of its webcasts. The archived version of the latest quarterly earnings webcast has each question listed separately. Click the one you want and you hear a recording of the original question and answer.
One-on-one on DVD
The Cecil B DeMille of IR, Morgan Molthrop, has released his latest blockbuster. Across the table from Jose Collazo is a one-on-one interview with the CEO of Infonet Services Corp, where Molthrop is VP of IR. Both webcast and on DVD, it’s a one-on-one analyst meeting packaged for the public.
Molthrop had barely wrapped up one of the first ever analyst day webcasts in June 2000 before he began looking for the next challenge. With Reg FD still making its way through the SEC, opening up the traditionally closed analyst day had made a big splash for Infonet. Now one-on-ones were coming under attack and some companies began eliminating them. Hence Infonet released Across the table, a one-on-one analyst meeting that still lives up to the spirit of FD.
‘Infonet has a very complicated story,’ Molthrop explains. ‘We tried to create a format that would provide the kind of overview an institutional investor gets in a one-on-one meeting – that is, from the top. The DVD format lets a new investor move from segment to segment, skipping around to the parts of the story they find most interesting.’
Molthrop employed professional actors to play a pair of analysts and wrote their script based on his notes from hundreds of past one-on-ones. Collazo was unscripted, though he had PowerPoint slides to work with. The two-day video shoot accounted for most of the project’s $30,000 price tag.
The DVD was distributed to large shareowners, target owners, sell-siders and potential sell-siders, with 50 key individuals getting DVD players – to be returned when they finished – that worked by plugging into notebook computers. The video was also posted on Infonet’s web site and the DVD mailed to anyone who requested it either on the web or on Infonet’s toll-free shareholder line.
Molthrop reports that the DVD has proved more popular with institutions than with individual investors. ‘After watching it they have much more educated questions when we walk in the door.’
Still, is there anything new about a DVD in IR? It could just as well be a CD-Rom – a passe format that wouldn’t impress anyone. Such is Molthrop’s cunning, however: sending a DVD is hot, sending a CD-Rom is not. Simply webcasting the video with indexed segments would have sufficed, but without grabbing the attention the DVD got.
Some might also question the scripted interview’s credibility. With actors playing the analysts, investors might wonder who’s playing the CEO. A videotaped one-on-one with a real analyst might have been more effective. Indeed FD allows for an analyst in such a situation to sign a confidentiality agreement which would last until the interview is webcast. ‘We would have used real analysts if we weren’t afraid of offending one by choosing another,’ Molthrop admits, adding that analysts can be rather ‘sensitive’.
PDF proxy card
David Snell knows proxy cards. After all, he votes at around 1,600 company meetings a year in his job as corporate governance analyst for Hermes, the giant UK pension fund. His idea is that listed companies should post downloadable PDF proxy cards on their web sites.
Until the 2001 proxy season, Snell filled out proxy cards by hand – five or six cards for each annual meeting for the different nominee accounts he votes for. This is the way it worked: Hermes’ custodian would send Snell the report and accounts – with one proxy card – from each of 1,600 or so listed companies. He would take each card to the copier, make the copies he needed, stamp them, fill them out and send them off.
There were often delays. Sometimes Snell wouldn’t receive a particular proxy card, so he’d ask the custodian to fax it through. If the custodian didn’t have it, he would then call the company registrar, who might send him to the company secretary, and so on and so on.
‘It was all paper-based and exceedingly annoying,’ Snell complains. ‘Sometimes I would have to talk to five or six people just to get a proxy card. But if there was a PDF version of the proxy card on the company’s web site, I could just download it and print it out. It would be fantastically simple and would save an awful lot of time.’
A quick search reveals a handful of US companies, such as Cambridge Technology Partners and Hercules, which indeed post PDF proxy cards on the web along with their proxy statement. But the practice is not widespread.
Luckily for Snell and his writer’s cramp, he’s now taking advantage of electronic proxy voting which has just been launched in the UK, making the proxy card redundant. He votes on custodian Chase Manhattan Bank’s electronic platform. ‘Even better, I’ve set up a standing instruction so they vote a standard way unless I instruct them differently.’
Snell is keen to see more listed companies adopt electronic voting. ‘Most companies are a little cautious, but we welcome these developments. Electronic voting can only help facilitate higher voting levels.’
Amvescap is one of the pioneering UK companies putting electronic proxy voting to the test. Shareholders can go to transfer agent IRG Capita’s web site and vote using a code from their paper proxy cards. ‘We felt it would make life a lot simpler for some of our institutional shareholders and many of our 12,000 individual shareholders,’ explains company secretary Michael Perman. ‘Also, we have quite a large employee shareholder base, and most of our staff are very much geared towards using computers. I think it will improve the level of voting once people get used to the idea. It’s just a simple way of doing it.’
So Snell’s smart PDF proxy card idea comes too late to make much difference in the UK market now that electronic voting has arrived and an electronic messaging standard has been signed last month by three top UK share registrars and Manifest, the UK proxy voting agency. But while the UK may be shifting towards e-voting, paper still rules in other markets, making Snell’s PDF proxy card a simple way to make life easier for shareholders. Snell concludes, ‘It would be easy to set up while waiting for the level of sophistication we have here in the UK.’
Mass personalization
It’s been almost two years since Andrew Corn, president of Admaster Communications, suggested mass personalization as the next cutting-edge trend for IR web sites. What may sound at first like an oxymoron is Corn’s term for the customization features of sites such as My Yahoo. But we’re still waiting for personalization to hit IR. ‘That’s disappointing, because the technology is in place to make it easy,’ says Corn.
An e-mail alert service is the beginning – ‘A baby step,’ says Corn. It allows some customization while gathering information about users. But beyond alerts, investors could choose what information they want to see when they go to the IR home page. A retail investor might like a fancy interactive stock ticker up front, while an institutional investor would favor a balance sheet and management presentations.
Corn says the best example of ‘a professional dashboard’ is Multex.com, which he describes as ‘My Yahoo on steroids.’ Other pointers can be gleaned from Gartner’s latest web annual report (designed by Admaster), which lets the user choose how to view financial statements, though the settings can’t be saved.
Mike Reilly of Hally Enterprises was also predicting personalization for IR sites back in 1999. A good customer-oriented example is Texas Instruments’ TI&Me. Nowadays, though, Reilly questions the cost of personalization. ‘It might be good for a consumer goods company with a really big retail investor base,’ he says. ‘But it’s a stretch to understand why most corporations would pay the extra money. Starting in May 2000, everyone started saying, Let’s slow down a bit.’
At PR Newswire, which handles the web sites of 400 clients, Michelle Savage, VP of IR services, agrees with Reilly. ‘Down the road it may be more important to our corporate audience,’ she predicts. ‘While the web is very cost-efficient, companies are not willing to spend hundreds of thousands of dollars for web bells and whistles.’
CCBN president Rob Adler confirms that personalization is not a priority. ‘One of the risks is that personalization runs counter to investor privacy, even counter to Reg FD,’ he says. ‘Instead we’re thinking about how the next generation of web sites will have a feedback loop back to the company. We’ll correlate web activity with stock activity as well as with IR program touch-points.’
Still, Admaster’s Corn believes it’s up to vendors such as CCBN or PR Newswire to face the challenge of personalization. They already customize data for public companies’ cookie-cutter IR web sites – ‘The data just needs to be parsed one more time for individual users.’ They could even take the custom features chosen by an investor at one site and apply them to the other client sites the same investor visits.
Your very own retail investor day
I heard Stefan Gruber of Germany’s SAP mention this at an IR conference in Copenhagen last summer. Asked about reaching retail investors, he suggested that SAP could team up with partner companies and hold their own investor day.
A retail investor day would be a step beyond the SAP Ecosystem investor conference, a day of presentations by SAP and several partner companies, such as SAP SI and itelligence, for institutional investors and analysts. The Ecosystem event was held alongside SAP’s Sapphire user conference in May 2000.
This year a financial analyst and investor symposium will be part of Sapphire Lisbon in April 2001 and again in Orlando, Florida in June (the same time as the Niri conference). But it’s only for SAP, with portfolio managers and analysts getting to talk to product experts as well as users. ‘Bear in mind that you can’t touch our product, or go into a shop and buy it. So these background briefings and product-focused events are very important to understanding SAP,’ Gruber comments.
SAP is planning to cater more to retail investors. The company has already taken advantage of the large retail investor conferences organized by Germany’s big savings banks. ‘There’s usually a good turnout of 500-1,000 people,’ says Gruber. ‘They have a very good knowledge of SAP, and although it’s not the same questions as you get at an analyst conference, it’s a good discussion in the end.’
So why should SAP bear the cost and hassle of organizing an investor event itself? After all, there are so many sell-side firms eager to present SAP to their clients. ‘If we participate in a broker-sponsored conference, we don’t determine the other companies participating,’ Gruber explains. ‘But if we did it ourselves we could invite companies with which we cooperate on products or services. Why not cooperate with them when it comes to talking to investors, too?’
Gruber, who in November opened SAP’s US investor relations office in New York, recognizes that with a total of 100,000 shareholders in Germany, any SAP live event can only reach a fraction of the company’s retail shareholder base, and the internet is still the number one medium for reaching this audience.
Bonus idea
Drink the right water.
