I’ve seen a lot of interesting content over the last few weeks with implications for the investor relations community. So instead of penning new content, I’ve decided to summarize some of what I’ve read.
From ISS Corporate Solutions on non-GAAP metrics: “To date, most institutional investors seem to be comfortable with non-GAAP metrics. According to the 2015-2016 annual ISS policy survey, only 11 percent of investors (and 1 percent of companies) responded that compensation metrics should only be based on GAAP measures.” From Compliance Week: “Three-fourths of companies in the S&P 100 reported non-GAAP earnings in 2013, exceeding their reported GAAP earnings by an average of 12 percent points.”
From Canaccord Genuity on activism: “Shareholder activism and unsolicited activity, particularly larger transactions, remain elevated,” and “Activists have also become more sophisticated in identifying their platforms and running their campaigns – often generating significant positive attention from mainstream media.” From Nasdaq: “Put yourself in the activists’ shoes and look at your company the way they would; assess your vulnerabilities as an activist would, communicate with and listen to shareholders; look for the manner in which questions are asked which may signal concerns that management should be effectively addressing; keep communications open and focused on how the company is managing both internal and external environments; provide regular updates to the Board; remain informed and plugged in with key industry members and peers; and actively monitor trading activity,” among others.
From Heartland Advisors on micro-caps: “In our view, micro-caps often have more in common with private equity investments than other publicly traded stocks. For example, the biggest payoffs from micro-caps often occur upon the sale or merger of a holding. Similar to private equity, they also require longer holding periods to fully reap the benefits of the asset class.”
From Sheppard Mullin on raising capital: “Although primarily a transportation bill, the FAST Act also made changes to the federal securities laws,” and “Overall, the FAST Act’s changes to the securities laws will help facilitate raising capital.” The FAST Act (Fixing America’s Surface Transportation Act) shortens the period of time that an emerging growth company must wait before beginning its road show from 21 days to 15 days after publicly filing its registration statement, and allows emerging growth companies to omit certain financial information in registration statements on Form S-1, among others.
From Forbes on board responsibility: “Two years ago virtually no company had proxy access, now more than 200 companies give shareowners a voice during board elections,” and “Proponents who put in proxy proposals have informed me that there has been a shift in terms of activity in this proxy season. At this time last year, they were strategizing with other proponents as to how to maximize votes. This year, they’re spending more time having rational, reasonable conversations with issuers about the technical details in regard to what type of proxy access the issuer will adopt.”
Have you read anything interesting lately? Please share with us in the comment section below.
— Laurie Berman, firstname.lastname@example.org