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Q&A with L.A. Business Journal Reporter

Business reporters play an important role in helping investors identify opportunities. PondelWilkinson caught up with James Rufus Koren, staff reporter of the Los Angeles Business Journal, to shed light on factors that influence his coverage of the banking and finance world.

 

James Rufus Koren, reporter with L.A. Business Journal

James Rufus Koren, reporter with L.A. Business Journal

1. How are social media influencing your coverage of companies?

 

I don’t know that it has changed the game that terribly much because of the type of niche business publication we are. We don’t do a lot of breaking news. We are looking for the analysis story; the exclusive deep read on what’s going on.  I also don’t find social media the best way to get information about banks. The three sentences at the bottom of a 10K are usually much more insightful. That said, if we are looking for a lead, I will search through Twitter to see if anyone is tweeting about a company or I’ll read blogs to see if anyone is talking about a company.

 

2. What characteristics make for a compelling story in the Los Angeles Business Journal?

 

Growth, change and new strategies that speak to the local economy are interesting to me. Big names are also interesting. For example, if Charlie Munger is doing something, we will probably be more interested than if Evan Pondel is doing something (laughter). But often times, what interests me may not interest another reporter. I like to explore parts of the banking and finance world that are not well understood. I look for things that I don’t understand and then try to take a crack at it.

 

3. How would you define an ideal source?

 

An ideal source is someone who is deeply in the know not just about their company or their particular corner of the world but also has a broader knowledge base and a big Rolodex. It’s very helpful when someone can say, ‘hey there is something interesting going on here that you should look at,’ such as a particular sector of the economy. An ideal source is someone who will give you information without the expectation that it will result in something immediate, or something positive for them.

 

4. How do you like to be approached about prospective stories?

 

In general, email is the easiest, but the ideal approach is developing a relationship with me. If you have been helpful in arranging interviews, I am more likely to follow up on story ideas. Sending gifts does not ensure a good story. A number of interesting things come into this office. Thankfully, no one has sent me a fish wrapped in a newspaper.

 

5. Where do you foresee the future of business journalism going?

 

I actually see business journalism continuing to connect with people in more real ways than other kinds of journalism. Many people have a hard time seeing the direct impact of stories about state and local politics, but people who read business stories want information so they can make wise decisions about their money.

 

6. How do you react when a call is not returned?

 

It depends on the information I left in a message. In general, I interpret it as the person has nothing to say for themselves, or that I have things pegged well enough in a story and the person cannot benefit from getting in touch with me. Also, as a business journalist, I understand the limitations of public companies and that certain things cannot be disclosed.

 

— Evan Pondel, epondel@pondel.com

 

Influence Ebbs for Proxy Advisers

JP Morgan

Influence is waning from firms whose mission, in part, is to recommend how investors should vote in corporate elections, The Wall Street Journal reported last week.  In one striking example, the roles of chairman and chief executive officer remained as one at J.P. Morgan Chase after a widely publicized contest, even though the two largest proxy advisers were in favor of splitting it.
 
Institutional Shareholder Services Inc. and Glass Lewis & Co. have long been key influencers when it comes to recommending votes, but with nearly 30 percent more proxy contests in May than last year, issuers have become a lot savvier about engaging investors before entering proxy season.
 
And rightly so.
 
The WSJ citing ISS said investors were able to secure board seats 73 percent of the time this season, compared with 56 percent last year. Nevertheless, issuers that are showing their muscle are starting to win, as was the case with J.P. Morgan.
 
It’s always easy to come up with a “should-a, could-a” list following proxy season.  But one prevailing concept should stick with issuers year round:  a well-devised investor communications and engagement plan helps ensure that management’s side of the story gets heard.  And if such a plan is implemented long enough in advance, investors will take the time to listen and come to their own conclusions long before the ballots are cast.

 

— Evan Pondel, epondel@pondel.com
 
 
Related articles:
 

 
 

Iran Sanctions Affect Public Companies

It’s a little disconcerting when you think about it, but interesting nonetheless how politics and the world order is infiltrating corporate life.

Iran Elections

Iran Elections (Photo Credit: Flickr: bioxid)

 
This month, public companies must begin reporting–in quarterly and annual reports to the SEC– transactions that they or any of their affiliates have with Iran.  In turn, if such a report is filed, a federal investigation will be triggered.
 
The new mandatory reporting requirement stems from passage last year of the Iran Threat Reduction and Syria Human Rights Act of 2012, signed into law in August by President Obama.  The website www.govtrack.us called the Act a strengthening of Iran sanctions “for the purpose of compelling Iran to abandon its pursuit of nuclear weapons and other threatening activities.”
 
Previously, the SEC’s Office of Global Security Risk was charged with monitoring public companies’ activities that could relate to any of four countries–Iran, Syria, Sudan and Cuba–designated by the State Department as “sponsors of terrorism.”  Now, issuers are required to make active disclosures relative to Iran, rather than merely respond to SEC inquiries.
 
The major news outlets haven’t said too much about the new Act, which, granted, will impact only a relatively small percentage of the thousands of public companies–mostly shippers, financial institutions,
insurers and reinsurers. Nevertheless, how such companies ultimately communicate their Iranian transactions and the ramifications on their stock prices and customer reactions will be fascinating to watch.

 

Roger Pondel, rpondel@pondel.com

Relate to the Public

photo2.JPG

 
Sometimes in order to practice public relations, you actually have to relate to the public. Today our firm visited the Daybreak Day Center, a place that provides food, shelter, clothing and showers for mentally ill homeless women.  We made lunch as a team for more than 20 women, had conversations with staff and volunteers, and shared a meal with some of the most courageous people we’ve ever met.
 
 

PondelWilkinson Wins Two PRism Awards

PRism Awards

 
PondelWilkinson received two PRism awards this week at the 48th Annual Public Relations Society of America – Los Angeles chapter awards show.  The awards recognize reputation/brand management in investor relations for Market Leader, Inc. (Nasdaq: LEDR), a provider of online technology and marketing solutions for real estate professionals, and digital PR tactics/webcasts for Physician Therapeutics, a division of Targeted Medical Pharma, Inc., which is a specialty pharmaceutical company that develops and sells prescription medical foods for the treatment of chronic disease.
 
 

IR in Politics

 
Business folks usually don’t talk about politics, but politicians love to beat up on business.  During the debates, Romney took Obama to task on unemployment, and Obama ribbed Romney about his tax rate.  And yet, we haven’t seen any business leaders lambast the two candidates about the gobs of money they’ve spent to win the hearts of voters.
 
So far, Obama has raised approximately $934 million, versus Romney’s $881.8 million, according to the New York Times.   Between the two of them, we’re talking close to $2 billion, and that doesn’t include a whole bunch of money spent in support or against the candidates by committees, nonprofit groups and other super PACs.
 
In PondelWilkinson’s world, investors are constantly holding executives from public companies accountable for expenses and how well they can manage their income statements and balance sheets.   Votes in favor of a company’s financial performance usually result in rising shares.  The opposite is true for lackluster performance.
 
While racking up campaign expenses isn’t directly analogous to a company’s handling of SG&A, it strikes me as hypocritical when presidential candidates spend hundreds of millions of dollars to harness an asset (our country) that is ailing from the very same spendthrift ways that contribute to our nation’s growing deficit.

 

Evan Pondel, epondel@pondel.com
 
 

Don’t Get Preoccupied

Occupy Wall Street

Occupy Wall Street on November 2, 2011 (Photo Credit: Mario Tama, Getty Images)

The Occupy Wall Street movement is less than two months old, and yet it feels like the story has been around for decades.  I’m not convinced it’s a result of the Occupiers’ public relations prowess.  It’s probably more of a function of the archetypal roots of the story – media have been covering protests ever since the dawn of newsprint.  And think about the ingredients that comprise this protest story.  There’s emotion, civil disobedience, and plenty of cause, especially with a staggering unemployment rate and an allegedly clear and present culprit: Wall Street.
 
But the future of the Occupy movement is unknown, and even though big banks are the targets du jour, who’s next in line and what are the Occupiers’ long-term goals?  It appears the movement is in the midst of a public relations crisis, and unless the collective consciousness can think of something quickly, the cold snap of winter is going to shut this protest down.
 
War, civil rights and genocide all present perfectly valid theses for inciting protest.  There is a means to an end, and even if the end is not near, the path to salvation is clear.  But the Occupy movement has no such endpoint.  All of the ingredients are present, with the exception of a well-articulated goal.  Hey, hey, the protesters might say, the movement is evolving organically because that’s what the people want.  But when was the last time you tried to accomplish something without knowing what exactly you were trying to accomplish?
 
So here’s some public relations advice to keep the protest alive and media engaged:
 

  • Set some realistic goals that Occupiers and non-Occupiers can understand and rally around to stay motivated;
     

  • Assemble a dream team in Washington, i.e. lobbyists, politicians, union leaders, financial executives, etc … and create an action plan that everyone running in the 2012 election will have to address and promise to review if elected;
     

  • Keep the messaging consistent across the country.  Yes, there are a lot of things people are angry about, but staying focused on specific topics will ensure a more cohesive and powerful message;
     

  • Know your allies and do whatever is possible and practical to support them;
     

  • Do not generalize or stereotype when attacking a target.  Be specific.  Not everyone on Wall Street or who works for a big bank is an enemy.  The movement has already alienated itself from powerful people who can help accomplish the very change the Occupiers are (perhaps) seeking.

 

Evan Pondel, epondel@pondel.com
 
 

Sleep Like a Baby

Sleep like a baby

Photo Credit: Flickr, Sabine75

A sound piece of stock market advice counsels to invest in such a way that you can sleep like a baby, which is exactly how one money manager sleeps – he wakes up every two hours and cries.
 
That anecdote was among the lighter moments from this year’s Orange County Public Company Forum, where more than 200 business leaders heard perspectives on the market from NASDAQ Chief Economist Frank Hatheway, as well as thoughts from a panel that included a vice chairman of Bank of America Merrill Lynch, two public company CEOs, a hedge fund chief investment officer and a partner in the corporate and capital markets practice of an international law firm.
 
First, the economy, according to Dr. Hatheway:  “Things are not so bad, which is very good news, particularly in light of recent fears that the economy was on the precipice of a second recession.”  Hatheway said the “outlook for the U.S. is improving, albeit slowly and unevenly.”  He noted that industrial production has been steadily rising since mid-2009, although he also expects to see interest rates rise modestly and continued weakness in the dollar.
 
And second, the consensus on the stock market was similar to that of the economy:  The entire panel expects the markets to continue to improve during the next 12 months, with predictions that ranged from 3% to 10% growth.  Looking out even further, Cary Thompson, vice chairman of Bank of America Merrill Lynch, said he expects 3-5% annual growth for the next five to seven years.  Thompson also noted that the deals thus far in 2011 have been significantly larger than in 2010.
 
Given the choppiness of the expected growth, you may want to heed another piece of advice:  Don’t watch the stock market every minute of the day, and take it slow and steady for a good night’s sleep.
 
The annual event, now in its 14th year, was sponsored, in part, by PondelWilkinson, along with NASDAQ OMX; Paul Hastings; Bank of America Merrill Lynch; Deloitte; R R Donnelley; Woodruff Sawyer; NIRI Orange County; Mackenzie Partners; and the Forum for Corporate Directors.

 

PondelWilkinson, investor@pondel.com
 
 

Dear Abby: Why do IROs shun social media?

Dear Abby star on the Hollywood Walk of Fame

‘Dear Abby’ Star on the Hollywood Walk of Fame (Photo Credit: wikipedia.com)

Social media have been a part of our lives long before the advent of the Internet.  When our ancestors used ochre, hematite, charcoal and other materials to paint their triumphs and tragedies on cave walls and ceilings, they were engaging in social media.
 
When ancient Egyptians carved elaborate scenes on vases, amulets and pots, they were engaging in social media.
 
And when Pauline Phillips established her “Dear Abby” advice column in 1956, she was engaging in social media.
 
Media have always been social.  The difference today is that the Internet speeds up the dissemination of information, which is often repurposed and then dubbed “social” when it’s tweeted or published on a blog, YouTube or Facebook.   The challenge for professional communicators is harnessing the speed and power of the Internet to communicate effectively.
 
In the investor relations world, many professionals do not believe that today’s social media outlets establish effective lines of communication.  The proof:  84 percent of IROs do not use social media to communicate with their constituents, according to a Thomson Reuters survey due out this week.
 
I understand that IR folks, including myself, are more cautious about embracing social media because so many of the facts and figures we work with require adherence to strict disclosure procedures.   But that shouldn’t stop us from tapping into social media for other purposes, including the reinforcement of messaging and establishing dialogue with customers, shareholders and even employees.
 
As communications professionals, it serves in our best interest to understand how social media can be utilized to communicate more effectively with different audiences.  For example, London-based Derwent Capital runs a hedge fund that relies on Twitter for investment direction. StockTwits, which my colleague, Matt Sheldon, wrote about nearly six months ago, continues to garner more credibility in investor circles.
 
The bottom line is that human civilization has come a long way since relying on granite, clay and, yes, newsprint, to facilitate the flow of information.  Don’t you think it’s about time that IROs do the same?

 

Evan Pondel, epondel@pondel.com
 
 

Transparency Matters

“Think outside the box.”  “Stretch your imagination.”  “No idea is too big or too small.”  How many times have we heard those phrases when brainstorming solutions?  Everyone who practices our craft strives to be as creative as possible to generate the best results for our clients, but how many communications professionals fully understand the ramifications of their chosen strategy?  That’s why this story about a top-five public relations firm really piqued my interest.
 
I am not using this blog to place blame (plenty of media outlets have already done that), but rather to examine what happened and help others learn how to avoid what has become a rather public embarrassment for said PR firm.
 
On behalf of an unnamed client, who has since been identified as Facebook, Burson-Marsteller began a “whisper” campaign against Google to shed light on some of their privacy practices, presumably in the name of helping Facebook get out ahead of the competition.  While this practice might not seem extraordinary, the way the campaign was conducted, and the fact that it came from a highly respected firm, was a bit unorthodox.
 
The events:
 

  1. A Burson employee, former political columnist John Mercurio, offered to ghost write and place an op-ed column for former FTC researcher and blogger Christopher Soghoian, but would not provide the name of the client to Soghoian.
     

  2. Soghoian responded by posting Mercurio’s email pitch, along with his rejection, on the Internet. According to Forbes, Soghoian said, “I am quite capable of authoring my own anti-google stuff thank you.”
     

  3. USA Today devoted a story to the campaign about a week later, which included information about the pitch they received from Burson employee Jim Goldman, a former CNBC reporter.
     

  4. Former Internet analyst Henry Blodget, who now writes for Silicon Alley Insider, later proclaimed, “BUSTED: Former CNBC Tech Reporter Jim Goldman Caught Spreading Lies About Google For Unnamed PR Client.”
     

  5. Burson-Marsteller says that it shouldn’t have pitched negative Google stories on behalf of Facebook.

 
In their apology, Burson conceded that, “When talking to the media, we need to adhere to strict standards of transparency about clients, and this incident underscores the absolute importance of that principle.”
 
Media is a fantastic tool to get your messages to a broad group of people, but remember that everything you say or write is “on the record.”  Should we continue to find creative ways to disseminate messages?  Of course.  Should we do so without transparency?  Absolutely not.  In most cases, taking the high road is indeed the best course of action.

 

Laurie Berman, lberman@pondel.com