When it comes to investor feedback, there’s nothing better than a face-to-face chat – and that’s something global infrastructure firm Ferrovial does on a grand scale. Each year, the award-winning IR team, headed by Ricardo Jiménez, invites either an investor or an analyst to address a gathering of its top 150-180 managers from around the world at company headquarters in Madrid.
For around 20 minutes or so – followed by a ‘dialogue’ rather than a Q&A – the investor or analyst shares his or her candid view of the company. As well as being appreciated in the way all investor feedback is, this allows divisional managers running everything from construction projects like the Lyndon B Johnson Expressway north of Dallas to London’s Heathrow Airport to gain the sort of insights into market views usually reserved for the investor relations team and company executives.
But that didn’t happen in 2017. A scheduling conflict meant the carefully chosen investor – Jiménez stresses the need for someone with a genuine view of the stock, not someone ‘just dipping in for a few weeks’ – couldn’t be in Madrid for the managers’ meeting. The investor, who can’t be named for confidentiality reasons but whom Jiménez says comes from ‘a very large, long-only US fund,’ did however agree to share his thoughts on video.
It’s IR policy that any investor or analyst attending the event is free to speak his or her mind about the company, explains Jiménez, who adds that over the 12 or so years the firm has been doing this, Ferrovial has had good and bad times – resulting in sometimes more positive or more critical feedback.
But frank feedback isn’t something the company fears. In fact, with management remuneration linked to the share price, Jiménez says feedback – positive or critical – is always welcomed. ‘You cannot bring quality investors to your company and not allow them to talk freely,’ he says. ‘In fact, to bring a quality investor here to talk to the company is like having an independent adviser for half an hour.’
And although a number of institutions have no-feedback policies, Jiménez says he’s had no problems getting investors or analysts to share their thoughts on Ferrovial – so other than reminding investors ‘that they are not talking only to the CEO or CFO, but also to divisional managers whose day to day is different from those involved in the stock market’, Jiménez essentially sets no parameters.
‘We asked the investor to share not only his view of Ferrovial but also to share insights into his behavior as an investor,’ he says. ‘We asked him to explain to us what the different internal forces are that influence his fund’s decisions. As an investor, for example, you might like a company but your role is to determine whether or not a stock will actually be up over the following 12 months.’
So was the result as frank and open as the talks given in person? Jiménez says it was. And while he maintains that it’s always preferable to have someone come in person to the managers’ meeting – especially since the investor often spends the day there – video certainly has its advantages.
The 15 minutes of footage, condensed down by the IR team to around five minutes, is something that has served not only to educate Ferrovial’s management ranks but is also something Jiménez himself has returned to over the months since, to use internally and as a tool in meetings with the board. ‘It gives you something of a library,’ he says.
This article appeared in the spring 2018 issue of IR Magazine
