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Posts tagged “investor relations guidance”

The uphill battle to take down the ‘merger tax’

Merger objection class-action lawsuits have been the bane of public companies for going on a decade. Each year from 2009 through 2015, somewhere between 84 percent and 94 percent of all merger transactions over $100 million were challenged by at least one shareholder class-action lawsuit. In the January/February 2018 issue of the National Investor Relations Institute (NIRI) magazine IR Update, I write about the efforts of jurists and activists to clamp down on meritless merger suits and the maneuvers of opportunistic plaintiffs’ law firms to keep the six-figure fees flowing.

Read the full IR Update article here.

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Improving your proxy statement’s reader experience

Proxy statements have emerged as a key channel for telling a company’s story to shareholders and are a valuable tool for management and Boards. And proxies continue to become more robust – getting longer with more detailed disclosure; and the inclusion of infographics, charts and checklists are making key information more scannable and prominent. 

Content and design improvements are also being made to the shareholder letter, table of contents, company overview, and the proxy summary. Seventy-nine percent of companies included a proxy summary in 2016 (up from 39% in 2012) and 77% used color in their CD&As (up from 48% in 2012) based on Equilar’s 2017 Innovations in Proxy Design study, which examined proxies from the S&P 100. Companies are also increasing their use…

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Grappling with Non-GAAP Disclosure

As investor relations and corporate communications officers gear up for the summer round of quarterly reporting, the process promises to be more harried than usual as a result of heightened scrutiny by the Securities and Exchange Commission of non-GAAP reporting. Many companies will grapple with revisions to the wording and structure of their earnings releases. Others may need to significantly revise the template they have used for years.

Here are five Dos and Don’ts for making sure your reporting conforms with the new SEC Compliance and Disclosure Interpretations regarding the use of non-GAAP financial measures without distracting from a true financial picture.

1) Don’t Overreact.

Non-GAAP metrics have gotten a bad name due to blatant abuse by a small number of…

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The Enduring Power of the Earnings Report

How important are quarterly earnings releases and conference calls in an era of abundant information and nanosecond trading?  Very important, according to a recent study co-authored by Stanford professor Maureen McNichols. The study found that even in today’s environment, the earnings report and conference call not only have the ability to move markets (“during the three days surrounding quarterly reports, share prices are four times as likely to have big moves as they typically do”) but also can serve as indicators of how stocks will continue to move in the months ahead. 

Jeff Sommer of The New York Times also recently stated in an article that earnings reports can still move markets and traditional metrics still matter, especially when investors are looking for a…

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What’s to hide? Will FASB proposal materially limit transparency?

For public companies, materiality has long been at the center of best-practice investor relations.  Our experience has been that more open, transparent communications by companies typically leads to better relationships with investors, a level playing field and more accurate valuations.  In the wake of the Financial Accounting Standards Board’s stunning proposal to change the definition of materiality, we invited a seasoned financial services executive to offer his perspective on what the FASB is proposing. 

Armando Ramírez (MAcc, MBA) has held senior-level positions at large financial services companies in the U.S.  During his 17-year tenure at National City Corporation he primarily worked in strategic planning, corporate development and executed over 50…

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