Take a Break from Stress: Add a Little Music to Your Life

Having days of ups and downs? Divisiveness and polarization causing the blues? You are not alone.

A national survey we just commissioned on behalf of a client that provides tele-counseling to hundreds of anxious and stressed-out people each week shows that nearly 8 in 10 Americans are worried about the country’s future. The survey also showed that the mental health of 52 percent of American adults is suffering because of the election, to say nothing about COVID and other maladies.

“Americans need to be mindful of their mental health and find relief, otherwise, symptoms will only get worse and could lead to more serious health problems,” said Marianne Callahan, Ph.D., clinical and program director at The Maple Counseling Center.

Even if you think you can handle it on your own, we can all take a tip from my long-time friend and communicator extraordinaire Howard Kalt, who says, “Add a little music to your life.”

Studies have shown that music can lead to increased levels of dopamine in our brains. This is the same chemical that floods our noggins, making us forget about pain, mental or otherwise, and allows us to feel “high” when certain drugs are ingested. Jane Collingwood, a longtime contributing journalist to Psych Central, recently wrote, “Listening to music can have a tremendously relaxing effect on our minds and bodies and can act as a powerful stress management tool in our lives.”

Music releases endorphins. Shortly after the pandemic began, Howard launched a daily, endorphin-releasing music blog for his friends, SPEAKERS UP! Every morning, he dutifully issues a post on a different musical topic and genre, along with several relevant musical links.

I grew up in a musical family with a brother who is an accomplished jazz artist. This background does not mean I am never stressed or anxious. But when I saw the results of our client’s study, along with so much that has been written about the healing effects of music, combined with Howard’s daily music blog, it triggered my idea for this post.

And in true keeping with the mission of only posting articles on PW Insight that that relate to communications and investor relations, I am happy with this post to emulate Howard’s idea.

Relax, take a listen, and enjoy:

Roger Pondel, rpondel@pondel.com

To Delete or Not to Delete: That is the Email Question

I hope this email finds you well.

We all have come across this frustrating opening salvo at one time or another from some unknown person, touting a product or service that is of very little or no interest.

The good news is that email marketing campaigns have evolved. Technology and social media are enabling email marketers to deliver relevant content to intended recipients. The bad news, however, is that we are finding more emails in our inboxes.

And it’s only getting worse. According to Statista, the number of daily worldwide emails is estimated to increase to 319 billion next year, a 20 percent jump from the 269 billion sent in 2017.

When it comes to email marketing, our basic advice to clients, whether publicly traded or privately owned companies, is focused on content and consistency. Communications should be engaging and “on brand,” with a specific call-to-action, including click-backs to a website or online platform. Frequency also is important, keeping regular communications at a minimum, not overdoing it.

But myriad emails continue to arrive in our inboxes, creating a conundrum for many on whether to hit save or delete. Management experts and even psychologists advocate for zero tolerance on unopened emails. The theory is that a positive psychological effect occurs when completing the task of clearing an inbox, thereby making a person more productive, or at least feel that way.

Full disclosure: I currently have 2,782 unopened emails. That number pales in comparison to others, who have boasted amounts in the tens of thousands, even surpassing 100,000. For the record, I have seen all of my unopened emails. For us in the communications biz, think of it in terms of impressions. I’m constantly looking at emails to determine what needs to be opened immediately or saved for later. I do, however, delete “junk” most of the time.

I like to think of myself as super organized and very responsive, so cleaning my email inbox won’t necessarily make me more productive. Rather, I am relieved that perhaps one day I will need that email I saw months ago. It sounds silly, but  my email inbox serves as a database, enabling me to search for past client-related communications, news stories, relevant research, conference opportunities, among many  other topics.

There’s no one-size-fits-all approach when it comes to managing email inboxes. What’s important is that it works for the individual and does not jeopardize productivity, which is essential for managing today’s increasingly complex, multi-faceted, work-life business environment.

I hope this blogpost finds you well.

George Medici, gmedici@pondel.com

Disappearing Transparency: A Call to Action

Back in July, the SEC proposed new 13-F rules, including amending the reporting threshold for investment managers to “reflect today’s equities markets.” At first blush, the headline seems okay. When one digs deeper (actually, you don’t need to dig deep at all), the proposed rules represent a huge step backwards to a time when issuers and the investing public had very little information about stock ownership.

Source: Securities and Exchange Commision

A little bit more about the SEC’s rationale before diving into the heart of the matter. According to its July 10 press release, the proposal would increase the 13-F reporting threshold from $100 million to $3.5 billion, “reflecting proportionally the same market value of U.S. equities that $100 million represented in 1975, the time of the statutory directive.” From everything I’ve read on the subject, this rationale is misguided and imprudent.

According to IHS Markit, approximately 600 of the 5,200 investment managers that filed a Form 13-F last quarter manage over $3.5 billion in equities. Put another way, almost 90 percent of investment managers that are currently required to report their holdings, would no longer be required to do so. Further, more than 90 percent of the dollar value of the securities currently reported is held by these 600 firms. IHS Markit also noted that, on average, 55 percent of the investors on an issuer’s shareholder list would stop filing 13-F’s, 69 percent of the hedge funds on an issuer’s shareholder list would stop filing 13-F’s, and “IR Immune investors,” including index funds, quants and brokers would stop filing for 2 percent of their share value, while active investors would stop filing for 10 percent of their share value. Not good for an industry that requires more visibility, not less.

The National Investor Relations Institute (NIRI), has aggressively taken up the cause, rallying issuers, IR counselors and other prominent business associations. Last week, NIRI sent a letter to the SEC opposing the proposed rule. 237 issuers with a combined market cap of almost $3 trillion, five high-profile business associations and 26 IR counseling firms signed on in support. Additionally, NIRI reports widespread opposition from retail investors and small investment managers, who, in total, have submitted more than 1,000 comments to the SEC.

It’s not too late to take action, even if you’ve already signed on to NIRI’s letter. The deadline for submitting comments directly to the SEC is September 29. You can visit NIRI’s Advocacy Call to Action page for more information and suggestions on how you can help.

The SEC’s proposal would significantly hamper issuers’ ability to understand who owns their stock, who is selling their stock and who is buying their stock. Imagine a scenario in which an activist is slowly building a position, but you can’t see it happening and you are blindsided by a takeover attempt. Imagine how difficult it would be to keep current holders updated if you don’t know who they are. Imagine the inefficiency of having no way to prioritize incoming phone calls and meeting requests because you are in the dark about ownership status.

Perhaps Jim Cramer said it best. “If you believe Wall Street is important, if you believe business is important, if you believe the market is important, then the public deserves to know who owns what.” Use your voice to let the SEC know that you strongly oppose the proposed rule.

Laurie Berman, lberman@pondel.com

When the Viral Fog Lifts

Those who live in Southern California fully understand the terms “May gray” and “June gloom.” It’s that time of year when the sun comes out late afternoon. The temperature isn’t that cold, but gloominess permeates the air and stays around for most of the daylight hours. Most people hate it.

This year, at least for those who live in Los Angeles, the pre-summer grayness is no big deal. There’s a lot more to complain about than the weather.

Regardless of who you ask, or what television news station you watch, when that sun is fully bright again, there is consistent agreement that a “new normal” will surface. I am not one for pontificating about what’s ahead, especially when so much of the future remains racked with uncertainty. But in our niche of investor relations and strategic public relations, I will throw caution to the wind and make a few prognostications about how our sector already is transforming:

  • Few, if any, in-person non-deal road shows (NDRs), but plenty of virtual ones. CEOs and CFOs will love that. It will keep them in the office and save lots of time, to say nothing about eliminating many expenses, like air fare, hotels, limos, fancy restaurant meals. Virtual NDRs are in. They may be easier to schedule, but they must be visual and engaging to hold interest. Hello Zoom.
  • Virtual annual meetings already are the new norm. They will be on the rise and probably never go away. CEOs and CFOs may like that, too, but investors may not. Management will control the question and answer chat button, and the democratization of public companies may take one giant step backward. So watch carefully for a rise in activism for those companies that aren’t communicative and transparent, aren’t performing and aren’t unlocking shareholder value.
  • Desk-side briefings with journalists are history. There are fewer business journalists these days, anyway, and their time has become quite limited for casual background coffee klatches. A phone call or video interview will have to do, but there had better be something cogent to say.
  • Quarterly conference calls will become even more important. But management teams sorely need to interject more life into their presentations and not merely recite numbers. Yes, they will likely still be scripted, but it would be better if they could be turned into quarterly Zoom fireside chats for the Q&A portion.
  • Investor days are still important, but as with annual shareholder meetings, for the foreseeable future, they will be virtual. This will save money, possibly attract more attendees, and eliminate the free-lunch bunch. But to be effective, they need to be live, and engage with the audience, or attendees will be distracted while management drones on.  
  • Virtual investor conferences already have arrived and will likely increase in number. But be careful which ones to attend, either as a presenter or an investor. They can prove to be a waste of time. From the issuers’ perspectives, it’s important to know who’s really paying attention. Is anyone really listening? Sponsors should do whatever it takes to do it right, such as using video to make it worthwhile and come alive.
  • Assure that “out-of-sight, out-of-mind” syndrome does not set it. With much of the above happening in the privacy of one’s home office – or at least not in the offices of investors and analysts – greater attention must be paid to messaging for those who are listening.

The times, and the market, are changing fast. Balance sheets are more important than ever. Investors are looking for corporate measures to assure that capital is being deployed in value-accretive activities. With fewer, if hardly any, companies providing financial guidance, investors want to see actions that can translate into trackable metrics. They want to hear from management teams more often, and perhaps in new, or old, ways, like maybe bringing back the quarterly report. And once regarded principally as feel-good commentary, stockholders today look increasingly to investing in companies that focus on environmental, social and governance measures.

Unlike a CEO of a publicly traded company providing financial guidance on a quarterly earnings call – with significant consequences if wrong – no real harm has been done if my forecast for the future of investor relations is wrong. And maybe, just maybe, if I am right, the transformation will be good for all when the viral fog lifts. Except, of course, for missing some great meals in those fancy New York restaurants while on an NDR.  

Roger Pondel, rpondel@pondel.com

Our Industry Stands in Solidarity, So Do We

“In the end, we will remember not the words of our enemies, but the silence of our friends.”

The words were spoken by Martin Luther King Jr.

It is in that spirit, and at this sad time for our country, we put our core communications expertise to work with messages of universal resolve toward bringing about equality, justice and respect for everyone, once and for all.

We also are heartened by statements from the leaders of two trade associations we belong to: the Public Relations Society of America (PRSA) and the National Investor Relations Institute (NIRI).

In a recent letter to members titled, “My Heart Breaks,” PRSA Chair Garland Stansell writes, “We should be the voices of compassion, civility, reason, and the earnest voices of challenge to help our employers, clients, communities, friends and families engage in productive, honest and empathetic conversation.”

Similarly, NIRI’s President and CEO Gary LeBranche takes a personal approach in a post for IR Update Weekly titled, “Breathless,” stating, “If a community can rally to find a beloved pet, we can also rally to save and improve our society and our fellow humans.”

Both letters are worth taking the time to read in their entirety.

There is little left to be said. Now is the time for action. We stand in solidarity with our industry.

 Roger Pondel, rpondel@pondel.com

No Shut-down for Activism

While activist activity was down a bit in the first quarter of 2020, compared with last year’s first quarter, according to Activist Insight’s “Shareholder Activism in Q1 2020” report, there were still plenty of shareholder demands made of public companies.

By sector, industrials was the largest group impacted by activism, followed by financial services and consumer cyclicals. Large cap companies were the most affected, with U.S.-based companies making up 70 percent of those subjected to activist demands.

Shareholder demands are still being made of public companies, according to Activist Insight’s “Shareholder Activism in Q1 2020” report.

Lazard’s 1Q 2020 activism review shows that the number of targeted companies in the first quarter of this year was roughly the same as in last year’s first quarter. On the other hand, Reuters, reporting on the Lazard review, noted that while 2020 began on a strong note, with activist firms pushing for change at 42 companies in the first two months of the year, new activist campaign launches fell by 38 percent in March, when the global economic shut-down began in earnest.  Further, Reuters reported that new activist campaigns were, “launched at the slowest pace since 2013 and corporate agitators put the smallest amount of money to work since 2016.”  

Even so, there are several high-profile campaigns looming. One getting some buzz, according to Bloomberg, is Standard General’s proxy fight with Tenga, Inc., a $2 billion media company. This contest will be the first-ever all-digital board fight. With Standard General seeking four board seats, Tenga’s virtual annual meeting on April 30 will be a test for activism, both digitally and in the world of COVID-19. 

While virtual annual meetings are nothing new, counting contested votes remotely is. Bloomberg noted that Broadridge Financial Solutions Inc., which prepares, ships and counts most of the proxies for U.S. companies, doesn’t currently have a specific platform to allow for remote voting in a contested situation.  According to a Broadridge representative, the company, “lacks the technology” to count virtual votes when there are competing director slates. 

Bob Marese, president at MacKenzie Partners Inc., a proxy solicitation firm, said that it could, “be more difficult for proxy solicitors get investors to switch their votes in the lead up to the meeting because many are not in the office, nor are the bankers or brokers they may need to change their vote.” Other potential pitfalls include the inability for shareholders to ask tough questions in a virtual meeting setting. According to the Financial Times (as reported by IR Magazine), investors have become concerned that virtual annual meetings could “shift the balance of power” away from shareholders, as companies have greater control over managing Q&A sessions virtually.

What does the future hold for activist activity? Since many companies have curtailed stock buyback activity in light of the COVID-19 crisis, Lazard believes that activists pressing for return of capital through buybacks will not be a focus. 

Jim Rossman, the head of shareholder advisory at Lazard, believes that, “lower M&A activity and companies focused on conserving cash will mean that activists are likely to increase their focus on operational performance and how management teams react to the crisis as the basis for new campaigns.” He went on to say that activists will likely want to avoid looking overly aggressive during the pandemic as to not offend other investors, “whose help they might need in pushing their case later.” 

Chris Young, managing director and global head of contested situations at Jefferies, also believes overly aggressive activists could face media backlash for seemingly profiting off the pandemic. Young further believes that, “having lived through the prior period of sky-high market volatility, we expect there will be a decline in activist campaigns in the near-term. Once volatility subsides and corporate valuations reset at new normal levels, however, we expect activists could have enough time to initiate new campaigns, including submitting director nominations for proxy season 2021.”

While COVID-19 may be changing the activist landscape in the near-term, the same best practices apply to help make sure your company is ready in the event of aggressive shareholder demands. Analyze your shareholder base and stay in-the-know about changes in ownership, especially during a period of extreme volatility when activists can build positions more cheaply; be open to proactively engaging with investors, even while you hunker down to focus on the impact of the current health crisis and economic downturn; and, think about adopting a “poison pill,” or at least having one at the ready. 

Laurie Berman, lberman@pondel.com

Wash Your Hands and Don’t Panic!

If history has taught us anything, it’s that we should learn from it.

Since the outbreak of coronavirus disease (COVID-19), financial markets continue to be rattled, as the U.S. and other global economies desperately try to respond to the pandemic.

Cases of COVID-19 also are being reported in a growing number of countries internationally, including the United States.

Global travel, entertainment, sporting events and conferences all are being cancelled in an effort to curtail the spread of the pathogen, while companies reevaluate revenue projections and earnings guidance due to the current “business slowdown.”

Some good news, however. Congress approved $8.3B in emergency spending to fight the virus, plus the Fed lowered interest rates and has begun to flood the market with liquidity. And there’s now talk about a payroll tax cut. While these fixes are helpful in the long run, what can a business or organization do right now?

It’s important to realize that pathogen outbreaks are not new. Many more serious than COVID-19. What makes this epidemic seem worse, at least economically, perhaps is because we are more than ever linked to a global economy, and there is more we don’t know about the coronavirus than we actually do.

All this puts enormous pressure on business organizations to properly communicate to stakeholders, from employees to customers to shareholders, among other key audiences. Saying the wrong thing or not saying enough can be detrimental to the bottom line.

Establishing a crisis communications plan is vital to help navigate the fallout of COVID-19. It’s probably best to do it A.S.A.P. In the interim, here are three simple actions to follow:

Foster calm. Without sounding too glib, keep clam. Create a plan on how your organization is working to circumvent the spread of the coronavirus internally and externally. Follow guidelines from the CDC or WHO, and if applicable, bring in a health expert.

Communicate. Let employees know your organizational response. Transparency is key. Also, follow up with customers, partners, and other key audiences, as applicable. If publicly traded, it’s important to assess material risk, or even lack thereof, which may require special communications.

Anticipate. Address any worst case scenarios and formulate responses, both from tactical and communications perspectives. Keep in mind this is an internal exercise and not meant for public dissemination.

While the above-mentioned tips aren’t a replacement for a professional crisis communications plan, they can help organizations better prepare for the inevitable regarding COVID-19, which to many, may occur sooner than we think.

George Medici, gmedici@pondel.com

If …

Do you remember any of your elementary school teachers? Think back for a moment if any remain in your memory.

My kindergarten teacher at Bateman Elementary School, on the north side of Chicago, was Mrs. Hart. I only remember her because it was kindergarten, and she was my first teacher. No one went to pre-school in those days.

The next teacher I remember was Mrs. Castle, third grade, at Laurel Elementary School, in the heart of the borscht belt, near Melrose and Fairfax, in Los Angeles. I only recall her name because we just moved to LA, mid-semester, and I was the new kid in class. She was nice to me, even though I was a little behind in my knowledge of cursive.

Then we moved again when I was in the sixth grade, also mid-semester, and again I was the new kid in class at Lankershim Elementary School in North Hollywood. Not easy when you are painfully shy and eleven years old. But this teacher, Irv Sherins, was different.

Mr. Sherins paid lots of attention to me. He even assigned one of the kids, Dennis Gass, to be my buddy and show me around the school. (Dennis and I remained friends through high school. He enlisted in the Army right after graduation and died in Vietnam.)

You might be wondering what my memory of Irv Sherins has to do with investor relations and strategic public relations, which, after all, is what this blog is supposed to be about.

I so vividly remember Mr. Sherins – not because he treated me well and made me feel comfortable as the new kid in class – but because of a two-letter word he wrote on a corner of the blackboard, that was never erased. It was a word that has relevancy for our clients, our staff and corporate executives, among others, everywhere: The word is “If…”

Between today’s political stress, the coronavirus, and yes, the steep stock market decline, impacting valuations and business conditions worldwide, the meaning of that one small word written by Mr. Sherins more than 50 years ago, and never erased, can help all of us now. It was the first word and title of a famous Rudyard Kipling poem circa 1895. It’s interpretation by Mr. Sherins:

If you can keep your head while others around you are not…

Roger Pondel, rpondel@pondel.com

The Danger of High Flying Startups

WeWork, once a darling of Wall Street, even before its planned IPO, has been in the news a lot…and not because its stock price is flying high after going public.

In fact, as those in the investment community well know, WeWork recently pulled its IPO amidst investor doubts about the company’s valuation and concerns about corporate governance, according to the Wall Street Journal.

A follow-up WSJ story covered the incredible downfall of the company and its CEO, who has since been relieved of his duties, removing him from the company he started in 2010. According to an editorial in The Washington Post, “This might be the most spectacular implosion of a business in U.S. history. Other failures were bigger, in mere dollars. But WeWork has to be the most literally incredible. Profanity seems somehow inadequate. It’s just . . . holy wow.”

This spectacular implosion points to WeWork’s former CEO, Adam Neumann, whom The Atlantic called the “Most Talented Grifter of Our Time.” That’s saying a lot, given the downfall of Theranos due to its founder, Elizabeth Holmes, and the billions stolen by Bernie Madoff, pyramid schemer extraordinaire.

Looking at some of Neumann’s actions, it seems like the writing was on the wall.

For example, during a courting process by Nasdaq and the New York Stock Exchange, Neumann was said to have asked if the exchanges would ban meat or single-use plastic products in their cafeterias. A noble thought for sure, but one has to wonder what kind of power Neumann thought he could wield. While working on the company’s S-1 in preparation for the IPO, Neumann’s wife, also WeWork’s chief brand officer, insisted it be printed on recycled paper, but rejected early printings as not being up to snuff. This set the process back by days, because the original printer refused to work with them anymore. Earlier in his history, Neumann is reported to have claimed that he wanted to become “leader of the world, amassing more than $1 trillion in wealth.” While a successful CEO needs to have a healthy ego, these vignettes point to someone whose ego passed healthy, all the way to downright irrational.

SoftBank Group eventually bailed WeWork out through a $10 billion+ takeover, which, according to Reuters, gave Neumann a $1.7 billion payoff. That’s a lot more than the company’s currently estimated $8 billion valuation, but not even close to the $47 billion valuation it supposedly held in January.

Can the WeWork story provide insight for future start-ups and for venture capitalists who fund them?

For one, the financials, operations and inner workings of a company matter. When a high-profile unicorn, with a tremendous pre-IPO valuation files an S-1, the details become public and scrutinized by a lot of very smart investors. If a company is not on solid ground, with a strategic plan that can be effectively implemented, it’s probably not ready to go public. Additionally, when a CEO of a high-profile unicorn, with a tremendous pre-IPO valuation has delusions of grandeur, it’s probably not a great idea to back him or her, unless they have proven their worth.

While there’s no cookie cutter mold for determining which companies and CEOs will ultimately be successful, quality should be the rule, among many other warning signs that should be heeded.

Laurie Berman, lberman@pondel.com

Fax me! No really, Fax me!

Believe it or not, “faxing” is as prevalent today as it was during its heyday of the 80s and 90s.

Financial services, healthcare, government and manufacturing industries still rely on fax technology, mostly because of security and regulatory reasons.

For many corporate communications veterans, the fax machine used to be a lifesaver. No more sending press releases via snail mail.

While cloud-based fax services have advanced the standalone fax machine, the basic principle of sending information between two dedicated points remains the same.

The same goes for corporate communications. Social media, cable and other innovations have transformed how we communicate, but what we say is still paramount.

Consider these vital communications imperatives still relevant today:

  • Make the story interesting. Whether targeting Wall Street or Main Street, the narrative needs to be noteworthy. Not every company or organization will be doing super exciting work. Leverage a unique characteristic to help cut through the media clutter.
  • Know thy audience. Rule number one when it comes to communications. Deeply understand the various stakeholders within a company or brand’s ecosystem.
  • Communicate clearly. Keep it simple and refrain from too much jargon and industry buzz words. Sometimes the use of technical terminology is required, but it’s important to explain in layman’s terms.
  • Stay on message. Keep it tight. Generally, too many action items or message points can confuse an audience.
    Spell check. Apparently good grammar and correct spelling seem to have been forgotten, particularly when communicating on social media. Review before sending. Period.

The communications industry will continue to undergo technological innovations that will alter the way Information is conveyed. But whether spoken or written, communicating effectively is a priority that should never change.

— George Medici, gmedici@pondel.com