Corporate Eye

...compare, compete, excel

Investor

Getting the landing page right for investors

There are many theories regarding landing pages within and without the Investor Relations field. 

One idea is that a landing page should be quick loading and serve merely as a sign post that the user has arrived at their intended location. 

Another theory suggests that as much information as possible should be placed on the landing page in order to provide an interface which requires the fewest clicks from a user in order to reach the information they were looking for.  However, this can lead to an unpleasant looking page that is so full of information that it appears unfriendly and perhaps takes longer for the user to find what they are looking for despite any savings in how many clicks it takes to get there.

McAfee Landing Page

McAfee IR Landing Page - Click for Larger Image

The McAfee investor relations landing page is a solid example of a page which contains lots of information while maintaining its overall readability and aesthetics.

When first viewing the page, one is struck by the fact that although the page remains fully branded, there are remarkably few graphics.  This is accomplished by using not only the corporate logo in the upper left corner, but also by using a branded logo as the graphic that accompanies the top news story in the main content area. By using this technique, the page avoids the sparse look that comes from no graphics, while not wasting any area for superfluous design elements.

The other design element which allows for McAfee to get so much information onto this single page is that the separation between sections has not been aggrandized by large overbearing fonts, nor complex scrolls or other design heavy separators.  Instead, simple (and proven) gray bars are used with bold text.  Thus, the content areas are well separated, again without the cost of space loss.

What remains is a landing page that contains the beginning of virtually all of the basic information any investor might be looking for.  Just a quick perusal of the landing page shows just how much information has been loaded at the investor’s fingertips:

  • Current Stock Quote
  • Most recent webcast
  • Most recent earnings information
  • A year’s worth of previous earnings info
  • Most recent news release
  • Company Profile
  • Upcoming Events
  • List of Press Releases
  • Investor Relations Contact Information
  • Stock Listing Information

This array of information often takes many investor relations websites several pages to convey to the investor at any level.  The success of this arrangement comes from the idea that while a user will appreciate fewer clicks to find the data they are looking for, it is impractical to simply provide multiple full content documents on a single display.  Thus, when the McAfee IR landing page displays the “Corporate Profile,” it makes no attempt to display the whole text, nor even a major portion thereof.  Instead, a quick overview of what the company does (often referred to in marketing as an “elevator pitch”) is paired with two links.  One link goes to the corporate brochure, which no doubt contains a much more complete picture of the company profile, and the other goes to a corporate fact sheet, which contains much of the other information a user might want  regarding an overview of the company.

Easy navigation from the landing page to other more specific information is made easy by a clear easy to read menu bar at the left and a compact and user friendly toolbar across the top.

Best Practices – Layout Design for Maximum Information

Contrast the McAfee IR landing page to your company’s investor relations landing page.  Are you able to communicate as much information to a prospective or current investor as quickly?  Does the graphical design of your landing page use up valuable real estate that could be better spent communicating with your investors?  How many clicks does it take to find the same information?  For example, a shareholder with physical stock certificates looking for contact information for the IR department, or the transfer agent will require how many clicks to find the same information on your site?

Of course, copying the success of others is rarely the answer, but the layout and design used by McAfee provides a compelling case for the much information on the landing page paradigm without falling victim to its potential flaws.  Studying what works here can help lead to ideas that will work for you as well.

Improving Investor Relations Data Offerings with Excel

These days having the annual report somewhere on the Investor Relations website is all but a given.  While some companies publish just a PDF version of the printed document, others publish a web or HTML version.  This published data no doubt meets the expectations of the average investor.  Indeed, such easy access to annual reports is a great improvement over the days when the most the average IR site offered was an electronic way to request the standard snail mail delivery of the annual report.  However, there are some companies providing even more service to their valued investors.

Downloadable Spreadsheet Data

At Colgate’s Investor Relations website, they provide the usual Annual Report options.  There is a link for a PDF file for investors who like to download and view their reports offline, as well as a link to an online Annual Report.  But, there is one extra link.  It is for the Annual Report numbers as a Microsoft Excel document.  (I will refrain from making any comments about the garish color scheme – Oops.)

 Colgate.com - Annual Reports When it comes to investors there are all types.  Some investors care about technical analysis, or analyst recommendations, or even news reports.  Ask around long enough, and you’ll even find investors – some successful – who will admit to just using “their gut.”  But, one type of investor cares about numbers, and not just the headline numbers either.

The numbers investor wants to crunch data.  They want to calculate all those ratios that don’t come printed on the fact sheet.  They might even have a few ratios or formulas of their own that they use to help make their investment decisions.  Either way, before they can do anything else, they need those numbers in the annual report in some electronic format.

Generally, this involves subscribing to a service, or manually exporting values from an investing website or portal.  And, when all else fails, good old typing them into the computer from the page.

The Excel file on Colgate’s IR site eliminates the middleman and gives investors the raw hard numbers in a format that is easy to manipulate and export to whatever program or service they choose.

The Colgate Excel file contains nothing new or out of the ordinary, but it does make accessible the important numbers from the Annual Report.  Inside is the income statement, balance sheet, retained earnings, cash flows, and the 10-year financial summary.  Each of these is separated out as an spreadsheet page and most contain data multiple years of data (usually back to 2005). 

Benefits for IR

While this additional data may seem to be all about giving something more to company investors, it also provides a benefit for the IR Department and the company itself.

By providing its own Excel file, Colgate can ensure that ALL of the data goes with the numbers.  The 10-Year Financial Summary for example contains 6 footnotes on the numbers shown.  This ensures that investors looking at these raw numbers are getting that all important context.  Data provided by third-parties may or may not pass along such information once the raw data has been imported and standardized by whatever system they use.  Even if such information is carried through, its placement cannot be controlled by the company.  By supplying an in-house spreadsheet, the company can ensure that whatever information it deems necessary shows up in a way that they are comfortable with.

A Little Caution

Of course, releasing information in this way cannot be done on a whim, nor can the data be selectively highlighted or formatted.  Straight reproductions of already approved tables within the printed Annual Report are generally the safest way to go and ensure that there is no additional information released within the file. 

It is important to ensure that any variations from the exact numbers or formatting in the approved documents is not characterized as commentary on the data.  For example, something as simple as making certain lines or numbers bold for better visibility on the computer screen could be interpreted by some as the company drawing emphasis or attention to those numbers or fields.  (Or just as bad, as drawing attention away from other numbers or fields.)

Investor Relations Best Practices

While Microsoft Excel Spreadsheets are commonly used they are not the only format available for making electronic information accessible.  Comma-delimited files have the ability to be imported into almost any spreadsheet or analysis program.  However, the extra portability does come at the expense of readability and the increased chance of errors.

Whatever the format, now is the time to look into electronic distribution of data in this format.  Not only does it make the data more accessible to investors, it provides one more avenue of contact for IR.  Posted spreadsheets coupled with an email subscription to their updates ensures that investors regularly receive not only up to date data, but a subtle reminder about the company as well.

Ensuring that investors have correct timely data is one of the primary focuses of IR and making available electronic files like this is one more way to do just that.

Investor Relations Objectives and Measurement in 2009

As the new year begins, many departments and individuals within those departments have either looked at their performance for the previous year, or will be doing so soon.  Additionally, the same should be looking forward into 2009 and developing objectives and goals, as well as the means to measure their achievement.

Not long ago, the powers that be measured the success of an Investor Relations department by the stock price.  That is a little bit like measuring the quality of the physics department by the success of the marching band.

While the IR department can certainly influence the perception people have of the company and the news surrounding it, it cannot directly influence the actual events.  Imagine measuring the performance of a bank stock’s IR group by its stock price performance.  Not pretty.

IR Not PR

Just how to measure IR success is a bit of a mess.  We have already noted how measuring success as a function of the stock price isn’t an useful measure.  The other commonly implemented measurements aren’t necessarily pretty either.

There is the school of thought that advocates Public Relations style measurements.  This could be something along the lines of counting the number of positive press stories and comments versus the negative.  Of course, this is not tidy even for PR divisions who also need to deduce the “value” or “impact” of those items so as to not overweigh insignificant events by using just raw numbers.  It is doubly difficult for Investor Relations departments who would also need a way to quantify just how “investment related” each story was in addition to how big the story was.

More importantly, there is some disagreement as to just how much IR is like Public Relations.

Consider that most public relations departments are expected to build up relationships with individual members of the media, as well as with various media outlets.  These relationships can then use leverage both to spread information on behalf of the company and to get an “advanced” notice of information that may be forthcoming regarding the company.

But, most investor relations departments are actually tasked not with building relations with the media, but rather with shareholders and analysts.  Because the fundamental goal of each department’s relationship building is different so too should the measurements be different.

goal-gold-starMeasuring IR Effectiveness

In what way can the success of an Investor Relations department objectives be measured?  The answer lies within the objectives themselves. 

Ironically, it seems that the overall department objectives can be fuzzy at certain companies, but the objectives for specific positions within the IR department are relatively firm.  A review of recent high-level IR postings on Monster.com reveals several common themes.  From those, we can extrapolate meaningful benchmarks and measurements of effectiveness.

Common IR Objectives:

  1. Respond to requests from Investors and Analysts for information and data.
  2. Develop and implement investor materials and events including presentations, releases, fact sheets, investor events, conferences, and web events.
  3. Develop and distribute analyst materials including data, press clippings, fact sheets, and other relevant information.
  4. Develop and implement competitive intelligence and information as it pertains to publicly reported financials, the press, ratings, and public comments.
  5. Track shareholder ownership and IR contacts with major/important shareholders.
  6. Track and analyze analyst’s reports, models, and projections.
  7. Promote the purchase and retention of the company stock.

To effectively measure the performance of an IR department then, is to measure the effectiveness of the unit at carrying out these various tasks.  At first, this may appear as nebulous as before, but relatively hard data can be easily obtained by breaking down the objectives and determining what a positive outcome would look like.

For example, the first objective is to respond to requests for information.  A simple tracking system that logs a timestamp for the request, as well as the response (and if necessary, the follow up) allows an at a glance look at how timely responses are.  Are investor emails answered within 24 hours, or within one week, or maybe never?  Are analysts requests for data responded to within hours, days, weeks?  Does the response satisfy the inquiry, or are additional inquiries regarding the same information made, suggesting that the response was not fully adequate?

Investor materials can be archived and reviewed periodically to see how they not only provided the relevant education (surveys of those who received the materials can be helpful for determining this), but also how they compare to similar materials distributed by competitors and other publicly traded companies in general.

Analyst materials can be judged by observing analyst pronouncements and releases and then asking company insiders what if any information they think is flawed and what data would, if provided, counter-balance such claims.  If IR indeed provided the data or materials (whether the analyst took them into account or not) this would justify positive marks.  While the failure to include such data would justify the need for improvement.

Competitive intelligence could be judged similarly by noting where competitors are perceived as being more or less superior to the company and then ensuring that materials that weaken the ‘more superior’ argument are indeed within the materials while those that justify the ‘less superior’ areas are included.

The remaining three objectives are less promising ways of finding “hard” objectives, but are useful none the less.  Did the IR department maintain the acceptable frequency of communications with important shareholders whether they did or did not take any actions regarding the stock?   Were large changes in holdings sufficiently anticipated by the IR group?  Were analyst actions anticipated or were the company and its investors blind sided?

High performance on these benchmarks, by definition, connotes high performance in the duty to promote the purchase and retention of company stock regardless of the share price.

So, as the year begins, take stock (Hah!) of your department’s goals and objectives, as well as your own and strategize for the coming year.  Which of these objectives currently lacks a reportable metric?  Which of them are not tracked at all?  Improve on the goals and objectives and improvement within IR will follow.

Making Your IR Website More Robust

I’ve been reviewing a number of websites lately and it seems as if investor relations web sites are becoming more robust. I’ve been impressed with the variety and ingenuity exhibited on some of the sites I’ve seen, particularly for European companies. Overall, my impression is that the European IR websites have been more innovative in their use of the power of the web.

As you might expect, not every site does everything, so for the benefit of those investor relations officers that don’t have time to conduct a review of other web sites, I thought I would provide a series of posts that list some of my favorite features that can help you help investors.

ENI interactive chart

First, charting – there are lots of charting sites available, but some things can be done better on the company page. For example, interactive charts with links to events and press releases are very helpful. Many times I’ve stared at a stock price chart with a big dip or rise and wondered, “What happened here?” Such large dips or rises are almost invariably accompanied by a press release, so an interactive chart that leads you straight to the event saves a lot of time and effort.  

EADS interactive chart

Another helpful feature is being able to specify an exact time frame for your chart. After all, most investors don’t invest on the exact day necessary to fit into the standard time range specified on most web sites. I also found that charts that let you specify other companies to chart against very useful, although I’m sure many companies are not thrilled about having their competitors charted on their site.

As I continue to review sites, I hope to be able to  cite more examples of best practices.  It’s kind of fun to be able to hand out praise instead of criticism. 

DRIP Investment Programs and Investor Relations

DRIPs, or Dividend Reinvestment Programs, are typically aimed at smaller retail investors.  As such, they are not often on the front radar screen of most Investor Relations departments.  Still, as shareholders, DRIP investors end up being fairly loyal, and in most cases do not sell shares based on news, market movements, or other “events.”  So, in a very real way, DRIP investors act much like a stock buyback in that they remove shares from the market for longer periods of time.  A large DRIP program could theoretically have a nice positive impact upon a company’s long-term stock price.

DRIP Investors

Most stockholders in DRIP programs are very small time investors.  Often, they are inspired to setup such an investment after reading a magazine article or website which touts their benefits.  Therein, lies the difficulty.  Typically, such investors will have little or no experience with investing other than mutual funds and their retirement accounts.  Thus, their knowledge base regarding how stocks, the stock market, and public companies work will be very limited.  So limited, in fact, that just figuring out that “Investor Relations” means them may be a challenge, and the concept of a transfer agent will most likely be completely foreign.  A one liner directing potential DRIP investors to the main page of a company’s transfer agent will likely result in failure for converting an interested investor into an actual investor.

A more effective means of converting these small time prospective investors into actual company shareholders can be accomplished with just a small amount of effort.  Such effort, can virtually be a one-time thing that continues to pay dividends (pun intended) well into the future.

Investor Relations and DRIPs

Since the DRIP programs at most companies are administered by a third-party, many firms simply to choose to take a hands off approach to investors seeking information about a companies DRIP program by directing them, whether directly or indirectly, to the third-party that handles the DRIP.  However, those companies generally offer DRIPs for several publicly traded companies.  They have neither the time nor inclination to provide any sort of company specific information to prospective investors.

Additionally, many IR departments and their companies are concerned that offering too much information may be construed as an offer to sell securities which, of course, opens up a whole basket of potential problems.

So, for a lot of companies, the only information on their direct stock purchase program is an answer in the FAQ that says, “Yes, we offer a plan, click here.”  While completely sufficient, and for the savvy investor, more than adequate, this can be confusing to a novice shareholder, especially when the link in question points to the transfer agent’s home page where such an investor will get lost in a sea of what must be just mumbo jumbo to them.

However, a proactive IR department looking to acquire and retain more investors of any size can have a huge affect on this dilemma with just a single webpage or two of educational content.

Target-DRIP

For example, take a look at these images taken from Target’s investor relations site.  Instead of burying the information in the FAQ or elsewhere for the user to find, they have an actual webpage complete with normal header for the direct investment program.  There is very little text on the page, but what their is satisfies even the new investor’s questions.  It points out that an investor can use the program or a brokerage account.  Then, the page notes that the direct investment program is administered by its transfer agent, and says that to learn more the user will need to click the “button” below.  (It’s actually a link, so that is a tiny bit confusing, but we’ll chalk that up to design issues.)

Target-DRIP-2 The link sits directly beneath the disclaimer that the program is not an offer to sell securities, meeting requirements for both proximity and likelihood that the investor knows what they are agreeing to. 

In this case, Target has also chosen an additional notice that the investor is leaving the Target site.  When the user clicks yes, the landing page is customized to users coming from the Target site.  This prevents confusion among investors who might otherwise wonder if they are “in the right place,” and whether or not they have stumbled upon something too complicated to continue with.

The landing page at BNY Mellon spells out exactly why the users are here, and what their options are for the program.  Finally, the link for the Target specific information and details sits at the bottom of the page.

Target-DRIP-3

The combination of these two tiny pages accomplishes multiple things for the IR department.  First, it fulfils any obligation to notify users of the program as well as providing the necessary link to the appropriate third party.  But, while the FAQ answer stops here, these pages also ensure that the user understands where they are and why.  They confirm that the link they have followed it the “right” one regardless of whether they are an existing shareholder or a new shareholder, and finally, they ensure that the potential investor will arrive at the program details without any doubts or concerns.  In total, these benefits add up to less calls and emails to the IR department who otherwise might be involved by investors looking to “make sure” that they are doing it right, and also lowers the number of calls received by the transfer agent from prospective investors looking for a live person to confirm that things are in order.

As is often the case, a little extra communication ensures a smoother process for both future shareholder, and IR department.

The Minimalist Approach to IR Websites

Mies van der Rohe, one of the founders of modern architecture, famously said, “less is more”.  I have now found an investor relations website that attempts, unsuccessfully, to put this into practice.  

Kroger, a U. S. supermarket chain, has an investor relations section that consists of four pages.  The initial page contains a table with quarterly high and low stock prices and six facts about the company: number of employees, number of shareholders, shares outstanding this year, shares outstanding last year, stock ticker and exchange it is listed on.  

That’s it, nothing else, which makes it kind of difficult to form any sort of investment opinion about them.

I thought that was minimalist, but the next page takes it a step further.  Their FAQ page lists exactly six questions that they deem important enough to list.  On the third page, the effort to supply useful information about the company is not better. You want a report about the company?  Your first default is that the company sends you off to the SEC Edgar database.  You want to see the company’s annual report?  You have to dig through 73 pages of a proxy statement before you get to the most recent annual report.  No indexes, no tabs – you’re on your own if you want to find helpful data.

Finally, the webcasts page lists a link to a single upcoming event – no archive of past presentations, nothing to give you much context.

Oh well, I’ve never been much of a fan of modern architecture anyway.  In this case I think more would be more.  

Kroger has evidently decided one of two things: 1.) They are only going to provide the minimum amount of information they possibly can, or 2.) Let all those pesky investors go somewhere else to find the information.  After all, there’s a whole world wide web of information out there.  In either case, they are effectively driving investors away.  That can’t be good for their stock price.