IR case studies: ConEd and CA, Inc (part three)

Barclays is one that's been very aggressive. City is another, you could go right down the list. Jeff, UBS, Oppenheimer, very aggressive now in trying to gain access for their institutional clients to senior management. So they are willing, eager and bring a lot of resources to helping us reach the right target. There are very good reasons to have sell-side company an executive management team on a non-deal road show. But it's very important to keep a balance in that process. So aside from the fact that they can do a lot of the planning and execution and absorb some of the costs for the simple things like transportation and that kind of thing, which does save the company money, I find that taking the sell-side on non-deal road shows is actually strategic for me in that I tend to engage the analysts who are the least involved with us to take them on the road because their level of engagement on the company does not keep them from talking about the company. So if I have an investor who's interested and makes a phone call to a sell-side analyst who has neglected our story or isn't current on our story, that only hurts us. So we use the non-deal road show as actually a means of forcing, for lack of a better word, sell-side analysts to get engaged on the story because they'll spend an entire day with management. We'll also be able to access their research sales team, which is very helpful. And by the end of that day, we find that we have been able to re-engage their level of enthusiasm on the company, and we know for a fact that they're as up-to-date as they need to be in order to be helpful to our investors. So some people choose to go out only with analysts who have a buy rating on the stock. In our case, we don't make those distinctions and we actually find it to be more productive to go out with the lesser engaged analysts because we can turn their attitude around.

Everybody is responsible for keeping budgets down. I frequently find that the IR budget at the companies I've been has been one of the smallest budgets of all the budgets in the organization. So there's not as much to cut. I think that one of the ways to do that here at CA we actually transitioned our listing and have been able to take advantage of some of the services that the NASDAQ provides at very attractive rates. So things like surveillance and shareholder.com hosting our website. Because of the association with the NASDAQ, we've been able to drive value at a lesser rate. So I think that that's been important. Some of the areas that we have chosen to spend less money would be in the form of an annual report. So we do a glossy wrap on our 10K. We find that that is perfectly sufficient for what we need to accomplish with the 10K and the annual report. So that's allowed us to save a great deal of money and time.

Yeah, austerity is today's mantra across corporations and it's as apparent in investor relations as any other area of the company. We have been asked to do more with less. All the things I talked about suggest greater demand on investor relations. We used to have an outside consultant set up our meetings. Now we do that ourselves. We do a lot of targeting ourselves. We have always used an outside service to assist us in targeting equity analyst, but now we are doing the fixed income targeting ourselves. A lot of that ourselves in terms of management's time. We are doubling up, covering a lot more ground with two teams, but in some cases, Neil, we are doing for instance we've got a trip coming up in early December in Texas and we are doing this with Barclays Capital and we've got both the equity research analyst and the fixed income research analyst setting up meetings for us and we're going to do that with one team in this case. So we're going to try to have both sides of the institutional house in a meeting. Otherwise, we'll just spend an extra day there. So it's a much more efficient use of our chief financial officer's time. So we're doing a lot of that. We are looking at the schedule of our CEO and our CFO and if they're going to be in a city like Los Angeles where we have one of our largest shareholders and a number of other key targets, then we'll try to schedule meetings to coincide with their meetings. So we're doing a lot of that. The other interesting development has been New York Stock Exchange. They have stepped up in ways that continue to surprise me. Stepped up in terms of offering services that are very useful to us and that we ordinarily would have to pay for. And that has been a boon for us particularly in the past 18 months. A lot of tools now available through the stock exchange.

So what we've been working on doing is actually changing the strategy of investor relations from being very financially focused, very P&L based communication form to being much more strategic in nature. And so the goal has been to engage analysts and investors in forums which are focusing on our strategy, our products, our product depth, our technology portfolio and our go-to-market leadership, and to have them subsequently write notes which highlight those attributes for the company. So one of the ways that investor relations, it's so hard to measure, but one of the ways you can do it is whether or not you have been able to successfully communicate in a way that the analyst can write a note that reflects the corporate priorities and strategic direction. And so it's a very time intensive exercise. It's very one-on-one. But what we are seeing is an increase in notes published that reflect the corporate positioning and what we want to achieve, which is great because that's the message we really want to be delivering to the street. Crisis aside, that need to communicate has become so critical. Investors have become so demanding and our peers have become aggressive enough that we cannot afford to wait for our investors to call us. We have to be proactive. We have to be increasingly transparent and that is becoming more of an issue even as we deal with proxy issues. The need for transparency goes hand in hand with communication. So I think as I look across the globe at companies who are trying to attract investors, communication and transparency is critical.