For Public Companies, It’s Always Something

It seems like every day there is a new article or hypothesis about corporate boards and governance.  Diversity…Say on Pay…Proxy Access…Tenure.  You name it, it’s been debated.

A new Ernst and Young study takes on the topic of board member skills, or more specifically providing more disclosure to investors about the skills and experience of board members.  According to Ernst and Young, “Investors increasingly seek confirmation that boards have the skill sets and expertise needed to provide strategic counsel and oversee key risks facing the company, including environmental and social risks.”  Of the 50 institutional investors interviewed, more than three-quarters do not believe companies do enough to explain why they have the right people in the boardroom.

The Wall Street Journal reported that a thorough approach to selecting directors is more important than lower mandatory retirement ages for board members.  It only makes sense that investors be more concerned about what each director can bring to the table (pun intended) than how old that director is or how long they have been serving.  Although, these issues are also hot buttons for today’s boards.

As we tweeted earlier this week, there are more than 100 proxy access proposals thus far in 2015, up from just 17 last year, signaling that institutional investors want to be part of the process for selecting who will be guiding the companies they own.  Fourteen corporations are taking a more proactive approaching by voluntarily agreeing to give investors the ability to nominate their own directors.

It will likely be some time before corporate America turns over the board selection process, but in the meantime, we continue to believe that disclosure and transparency in governance for listed companies are the best way to build and maintain credibility and goodwill.

– Laurie Berman, lberman@pondel.com

Remaking Tuesday

EBOTIt’s Tuesday…that day of the week when your lazy Sunday afternoon nap is a distant (but fond) memory and the manic frenzy of Monday has passed, but the rest of the work week still seems like a long stretch of road.

Here at PondelWilkinson, we’ve decided that Tuesday needs a makeover. For too long, Tuesday has been treated like the Jan of the Brady Bunch week – taken for granted, overlooked and underappreciated despite serving as the stepping stone to Hump Day, Throwback Thursday, and Thank God It’s Friday.

In our humble opinion, it’s time we remember and acknowledge why #EverythingsBetterOnTuesday (or #EBOT, for short)

Here’s just the start of a list we’ve come up with:

  • #EverythingsBetterOnTuesday because let’s face it — it isn’t Monday
  • #EverythingsBetterOnTuesday because you can usually find some two-fer deal
  • If you’re in PR, #EverythingsBetterOnTuesday because it’s easier to talk to reporters
  • #EverythingsBetterOnTuesday because you can usually find a radio station that will play two songs in a row from your favorite artist : )
  • If you’re in the stock market, #EverythingsBetterOnTuesday because it’s typically the largest purchase day of the week (Wall Street types don’t call it “Turnaround Tuesday” for nothing)

So after you finish that last sip of your morning coffee, square up those shoulders and take a moment to appreciate the day. Because everything’s better on Tuesday.

Share with us your photos and thoughts on why #EBOT ; ) We’ll share our favorite posts next Tuesday!

–E.E. Wang and George Medici

The Good, the Bad, and the Ugly

The Good, the Bad and the Ugly is a periodic feature by PondelWilkinson that turns a critical eye on the way quarterly results are communicated.

The Good

Earnings season is nearing its end, and after all of the Q4 news releases and conference call transcripts have been parsed and picked away at like a bone-in fillet, it’s time to debrief about the good, the bad and the ugly when it comes to communicating results.

Let’s start with the good. More companies are embracing the use of video when conducting earnings calls, and T-Mobile did an excellent job streaming its Q4 results in real time.   Of course, the company delivered record growth, so who knows if the positive energy would still pervade on video if the numbers were worse.

The Bad

Certain adjectives and verbs continue to see the light of day in earnings releases when they should’ve been put to bed a long time ago. Following is a short list: pleased, thrilled, excited, disruptive, highly anticipated, state-of-the-art, cutting edge, and leading.

The Ugly

I was recently invited to speak to MBA students at the University of Southern California about investor relations.  We were discussing conference calls and how analysts and investors queue up during the calls to ask management questions.   Apparently, a fairly prominent short seller had lectured to the same group a few weeks ago and said he poses as a well-known, long-only buyside institution to get into the queue and then when it’s his turn to ask a question, he hammers home his short-sighted agenda.

OK, that’s a wrap for the good, the bad and the ugly for Q4. Until next quarter.

– Evan Pondel, epondel@pondel.com

Tweet TV: Social Media is Making Television Fun Again

EllenNearly 37 million people watched the 87th Annual Academy Awards, down from 44 million last year.  Many reasons may have contributed to the viewership drop, everything ranging from the show’s host performance, to the celebrity of the actors themselves, to the types of films that were nominated.

For many pundits that offered critiques of this year’s Oscars, reviews bordered on ho-hum and boring.  But what may have been seen as a lackluster TV event, much of the action was happening on social media, more so on Facebook than on Twitter.

It’s hard not to watch a live TV event these days without being asked to tweet this or hashtag that.  This year’s Academy Awards were no exception.  While Twitter generated far less interaction than last year, 6 million tweets were posted about the 2015 #Oscars, still a fairly significant number of impressions.

Remember last year’s Ellen DeGeneres’ selfie that actually “broke” Twitter for 20 minutes?  The talk-show host’s photo was retweeted 3.3 million times and seen by 37 million people.  Experts valued the exposure to Samsung (a sponsor of The Oscars and the type of smartphone that was used to snap the photo) in the hundreds of millions of dollars.  While having several of Hollywood’s top A-list celebs in the photo certainly helped it go viral, the tweet nonetheless was a successful integration of TV and social media.

Facebook this year received more engagement, where 21 million people generated 58 million posts, likes or comments about the Oscars, up from 11.1 million users in 2014 generating 25 million interactions.  The social network this year also introduced its Trending Oscars experience that allowed fans to connect in real time about the show, which may have led to the huge engagement.

Clearly, the social experience between Twitter and Facebook is much different, although one thing is abundantly clear for both: engagement.  Today’s social platforms enable two-way communication in real time like never before.  And because tweets and posts are searchable and have a long life span – which may not always be a good thing – the value of engagement is much greater.

For the naysayers about social media, and there are those still out there, new media platforms are extending brands way beyond the TV set and onto the Internet, where discussions continue on for days and even months.

For TV in particular, social media may be giving it a sorely needed boost, especially since fewer people than ever are watching television.   Good content doesn’t hurt either.    Either way, social media is here to stay and actually making TV fun again.

– George Medici, gmedici@pondel.com

Lessons from a Legend

The world has been gripped by Super Bowl mania for the last few weeks. As such, it would probably be fairly simple (and maybe even valuable) to write about the communications lessons that could be learned from Marshawn Lynch’s press conference during Media Day where he famously answered every single question (more than 30 of them) with “I’m here so I don’t get fined.

However, I recently came across a Forbes article about lessons learned from a legend of another sport …baseball great Ernie Banks, better known as “Mr. Cub,” who passed away last week. These lessons supersede football, baseball and every other sport, and can (and should) be applied to our work lives.

Enjoy What You Do: The daily pressures and stresses of our jobs as communicators can sometimes overshadow the enjoyment we get from successfully completing a project, helping a company through a painful period or learning something new. Take time to remember why you do what you do and to appreciate it.

Don’t Begrudge Others’ Success: Comparing your successes to those of others is unproductive. Celebrate in colleagues’ accomplishments and give credit where it’s due. We are all after the same end result, so regardless of how you arrive there, enjoy the victory together.

Embrace Change: This is a big one. Change can be difficult for some and generally affects all. Is your company being acquired? Did you recently lose a client? Does your CEO want to stop providing guidance to the Street when you know it’s the wrong thing to do? Whatever the change, keep an open mind, be part of the solution and use the experience in future endeavors.

Thank you Mr. Cub for your endless optimism. And thank you Geoff Loftis, the Forbes contributor who wrote the original article, for sharing these insights.

– Laurie Berman, lberman@pondel.com

JPM Post-Mortem

The J.P. Morgan Healthcare Conference in San Francisco is the equivalent of the Super Bowl in the healthcare industry, and last week was no exception, with executives from public and private companies descending on the Bay with such vigor and force that Union Square looked like the trading floor of the AMEX circa 1970.

JPMers taking a break in Union Square.

JPMers taking a break in Union Square.

There are good ways to do “JPM” and bad ways to do “JPM.” I walked more than 14 miles during two days of strategic meetings. Fortunately, I wasn’t wearing new shoes. But that doesn’t mean other JPMers weren’t wearing new shoes, and after witnessing dozens upon dozens of executives resting their sore feet on park benches and even curbside, it got me thinking it might be helpful to pass along a few pieces of advice.

  1. Try to avoid scheduling meetings in lounges. It may sound tempting to sip martinis in a dimly lit basement with red velvet seats and a DJ spinning dubstep, but lounges are exactly what they portend to be, lounges. It is difficult to stay alert when sitting reclined with an alcoholic beverage in hand. If you’re seeking an off-the-beaten-path venue, try a tea house, such as Samovar.
  2. An average hotel room near Union Square will cost north of $500 a night during JPM. Fear not. It’s possible to get a decent room close to the action for $150 a night, which includes a lovely continental breakfast. I’m talking about the Golden Gate Hotel, technically a bed and breakfast, but who cares when you’re saving all that money for your next venture. (Be forewarned, you may have to share a bathroom if your reservation is within a few weeks of the conference.)
  3. Schedule meetings with meals. Between back-to-back strategic meetings and the conference itself, proper nourishment is often lacking. To avoid going comatose, try scheduling breakfast, lunch and dinner meetings.   The Daily Grill and Le Colonial are favorites that serve good food and a wee bit of cache for rubbing shoulders with the who’s who at JPM.
  4. Do not over extend on meetings. Yes, it is tempting to meet with anyone and everyone who wants to meet with you, particularly if you’re at an inflection point with respect to funding, M&A activity or strategic alliances. However, if you stretch yourself too thin, meetings that deserve more attention will soon take on water as attention spans wane. Bottom line: Make sure your schedule takes into account some downtime.
  5. And finally, less is more when it comes to collateral at JPM. Most folks are walking from meeting to meeting every 30 minutes to an hour, which means the less you have to carry, the better. If you are interested in passing along collateral, use it as an opportunity to follow up post-JPM.

– Evan Pondel, epondel@pondel.com

Heard During the Breaks

Often at professional conferences, the stuff one hears during the breaks and at the cocktail hour is more valuable than the content in some of the formal presentations. I’m not talking about gossip, but real trends and ideas that have practical use.

Here are a few random items worth thinking about that I jotted down from corridor and cocktail talk at the recent annual conference of the National Investor Relations Institute’s Senior Roundtable:

  • Cordial intervention with activist investors usually does more good than harm.
  • Certain things in a 10K or 10Q just cannot be easily explained in writing and can best be conveyed by a CEO or CFO at an in-person meeting.
  • Try participating in a reverse road show, where the portfolio managers come to you in small groups, often as sponsored bus tours in bigger cities with several public companies in relatively close proximity. It saves your CEOs and CFOs much time and expense.
  • How investment banks get paid by the institutions for helping to provide corporate access—a function that IR professionals formerly held—is under increasing scrutiny. Many CEOs and IROs do not even know that the banks get paid for this service.
  • Sustainability is gaining steam as a topic that public companies must pay closer attention to, but for which few in the C-suite really want to take responsibility. It could be a function that IR professionals should grab.
  • Watch for board tenure to become among the latest hot governance topics, regardless of whether the directors are doing their jobs well.
  • Activists usually operate in packs. So even if an activist only owns 1% of your shares, pay heed, because behind those shares could be a much bigger percentage from friends.
  • Boards must discuss continuous shareholder value improvement. It’s their job and does not mean they are being promotional.
  • The buy side, unless an index fund, regards access to management as part of doing proper due diligence—whether they are invited to the table by an IR professional, an institutional salesperson or a sell-side analyst.

As with most conferences, this one also had a motivational speaker who was not there because of the subject matter, but rather to re-charge the batteries of the attendees.  Yes, he wrote a book and did a signing. Since the conference was a private affair, however, you’ll have to call me if you want his or his book’s name.  It’s a quick, easy read, and I will take the liberty of ending this post with a thought from the book that I particularly like about the stresses we all endure in our jobs and having the right attitude:  “We are all lucky that we get to go to work each day…rather than we got to go to work.”

–Roger Pondel, rpondel@pondel.com

What Gates Learned from Buffet

After helping hundreds of companies with investor relations strategy and tactics over the past 20-plus years, I’m always excited to learn something new.  In fact, I try to learn something new every single day.  And, at the family dinner table, amongst the questions we ask one another every night is, “Did you learn anything new today or did anything surprise you today?”  So, when I came across this Business Insider article of a post Bill Gates made on LinkedIn about three things he learned from Warren Buffet I was intrigued.  After all, what could a genius in his own right learn from another?

  1. It’s not just about investing. Gates explains that although most people ask Buffet about how he thinks about investing, not nearly enough ask him about how he thinks about business. Rather than just being a brilliant stock picker, Buffet says it’s important to look at an entire business, inside and out and then deciding what it is worth. He says you have to be, “willing to ignore the market rather than follow it, because you want to take advantage of the market’s mistakes.” Outside of business and the stock market, this sounds like a pretty good life lesson. Don’t make decisions in a vacuum.
  2. Use your platform. Buffet often uses his annual report shareholder letter to deliver his messages. In these letters he speaks frankly and is not afraid to criticize those things he doesn’t believe in. Gates says that, “Warren inspired me to start writing my own annual letter about the foundation’s work. I still have a ways to go before mine is as good as Warren’s, but it’s been helpful to sit down once a year and explain the results we’re seeing, both good and bad.” Life lesson number two: Remain true to who you are.
  3. Know how valuable your time is. “No matter how much money you have, you can’t buy more time,” says Gates. Truer words were never spoken. Buffet only takes meetings that provide value to all participants and makes sure he’s also available and accessible to “the people he trusts.” Lesson number three: Make every minute count.

None of these lessons is earth shattering, but it’s very interesting to see that even Bill Gates finds worth in them and that he’s not afraid to say that he learned them from Warren Buffet.  No matter how intelligent you are (or think you are), take some time to listen to those around you and open your mind.  You might just learn something that helps shape your business future.

– Laurie Berman, lberman@pondel.com

Listen, Understand, Communicate. (Repeat)

Glass Lewis and ISS recently released new guidelines for the 2015 proxy season, which go into effect for shareholder meetings held on or after January 1, 2015 and February 1, 2015, respectively.

The new guidelines put greater emphasis on protecting shareholders’ rights with respect to bylaw/charter amendments, litigation, and shareholder proposals, as well as increased qualitative and quantitative scrutiny on executive pay and equity plans.

With shareholder activism continuing to rise and Glass Lewis and ISS guidelines increasingly defining how boards should conduct business, what should companies be doing to prepare for next year’s proxy season?

Here are three simple strategies for making sure your company is ahead of the curve:

  1. LISTEN. Do you know how your investors are feeling about the company and its progress…not just after you send out your proxy, but throughout the year? How often does your IR team engage with investors – not just to update them on your story but to also get feedback from them on management, company progress, etc.?There are two types of companies that typically get widespread voter turnout during proxy season: those whose management spend a lot of time listening to their investors…and those who spend virtually none and find themselves in the middle of a proxy fight.
  1. UNDERSTAND. Understanding your investors’ investment goals and philosophy can go a long way in learning how to most effectively communicate your company’s strategy and actions – before, during and after proxy season. Leverage your IR team and proxy advisory firm to help you gain a clear understanding of the investors who own your stock:
    • Breakdown of the types of investors holding your stock (retail, quantitative vs. qualitative buyside)
    • Buyside investors
      – How long does this investor typically hold? What price targets or corporate developments could cause them to exit your stock?
      – Have they been activist in the past? If so, what were their trigger points
      – What is the investment thesis of the firm? What are their typical entry and exit points? What factors led them to making the decision to buy your stock or increase/decrease their position?
      – Who is the decision maker at the firm? How do they prefer to communicate with the company –and how often?
      – Does this investor subscribe to Glass Lewis or ISS for voting recommendations? Who within your buyside investor’s firm is responsible for voting their proxy? (In many cases, it’s not the person who made the decision to invest in your stock.)
    • Glass Lewis and ISS
      – Is your management team and IR team up to date on the latest guidelines?
      – How do your current policies or potential proposals match up with ISS and Glass Lewis’ recommendations?
  2. COMMUNICATE. Strong shareholder relationships start with a commitment to communication. Waiting until proxy season starts again to talk to a dissatisfied shareholder – or any shareholder – is often too late.
    • Communicate with your investors regularly (especially with the ones who are unhappy)
    • Communicate to your board on investor sentiment and feedback quarterly.
    • Be positive and responsive to investors who request talking with your board. The best way to start a proxy fight is to ignore or dismiss a disgruntled shareholder.
    • Be proactive in communicating with Glass Lewis, ISS and shareholders on sensitive proposals

– E.E. Wang, ewang@pondel.com

 

 

 

PW Clients Mistic and Rentrak Score Top Honors at PRSA Awards

PondelWilkinson clients Mistic and Rentrak recently received top honors at this year’s PRSA-LA PRism awards.PRSA awards

A client since 2013, electronic cigarettes brand Mistic® was recognized with the 2014 PRism Award for news release writing for its 2014 American E-Cigarette Etiquette Survey. Earlier this year, PR Week did a feature highlighting PondelWilkinson’s work on Mistic’s IndyCar campaign.

“This year’s award represents the second time this year that the Mistic team has been recognized by the PR industry,” said Todd Millard, Mistic co-founder and COO. “Not coincidentally, George Medici and the team at PondelWilkinson have been a key partner in working with our leadership to develop and implement Mistic’s strategic PR program, which has helped us in our on-going efforts to expand awareness of our company and products.”

Rentrak (NASDAQ:RENT), the entertainment and marketing industries’ premier provider of worldwide consumer viewership information, received the 2014 PRism Award  of Excellence for Annual Report – Corporate. The award was especially gratifying for the PondelWilkinson account team, who have worked with Rentrak for more than six years.

“It was a great honor to work with Rentrak’s talented marketing team on this year’s annual report,” said Laurie Berman, managing director for PondelWilkinson. “I enjoyed collaborating with the team to develop messaging that complemented the original report design they created in-house. Working together, we created an annual report that not only was visually impactful, but meaningfully communicated Rentrak’s corporate progress and achievements to its stakeholders.”

Congratulations to all of this year’s PRSA PRism winners!

– E.E. Wang, ewang@pondel.com