Strategic Planning Developing an IR Plan

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1 Webinar Series Strategic Planning Developing an IR Plan 3. Measuring the Success of Your Program August 20, p.m. ET Keith Mabee Vice Chairman, Dix & Eaton 1

2 Agenda 1. August 6 Introduction The role of IR in value creation Developing an IR plan Assessment Plan 2. August 13 Case study discussion Tactics and execution 3. August 20 Measuring the Success of your Program Measurement and strategy evolution 2

3 Questions from Second Session When, if ever, would a company want to expand its retail shareholder base? Why would you ever want to try to get an investor to sell your stock? How many sell-side analysts are optimal for a small cap firm? How do you handle investor concern over analyst notes published on speculation and rumors with seemingly questionable motivations? 3

4 Questions from Second Session (cont.) Please expand on the last two bullets for Developing an IR Plan Setting Program Objectives: To educate management and employees about how their efforts can impact share price e.g. examples To provide management and the Board with timely competitive feedback, corporate governance and market analysis e.g. examples of corporate governance. Is it typical for the IRO to be on the governance committee? 4

5 Developing an IR Plan Setting Program Objectives Typical IR Program Objectives To focus investors on your business, financial results and long-term prospects for creating value To provide meaningful and relevant public disclosure tied to business dynamics To establish timely and consistent communications and appropriate transparency with existing and potential investors To attract the optimal shareholder mix To educate management and employees about how their efforts can impact share price To provide management and the Board with timely competitive feedback, corporate governance and market analysis 5

6 Program Measurement Evaluation is critical for all IR Programs Must set measurable goals Should set management expectations Use benchmark investor perception research periodically Provide both quantitative and qualitative views Short-term share price and analysts ratings should not drive IR strategy and goals 6

7 Program Measurement Internal Management s view of IR It s not just communicating, but also participating in strategy formulation; marketing the investible story Management always has good intelligence about investors perceptions of strategic issues and concerns The market doesn t over-react to good or bad news; built-in credibility quotient IRO is an integral part of the management team 7

8 Program Measurement External Perception Study Interviews Buy Side Key Media Sell Side Industry Analysts Portfolio Managers Recent Sellers Measures perception of company s strategies and management team Identifies gaps between what management is communicating and how it is being received 8

9 Program Measurement Objective Measures Number of analysts following the company Number of meetings held with investors Number of conference presentations made Long-term share price relative to performance Long-term share price volatility Successful conversion of targeted investors Achieving optimal shareholder base Keeping management and BOD informed; minimize market surprises Managing within budget; delivering ROI on company s IR objectives 9

10 Program Measurement Subjective Measures Is the message being understood? Are analysts and investors not surprised? Are analysts and investors enthusiastic? Is IR effective in a crisis? In capital raising? Are management/board well informed? Does the IRO have credibility? Who do management and investors turn to first? Is the IRO an effective corporate governance sentinel? 10

11 Developing an IR Plan Identifying and Prioritizing Target Audiences SEC Stock exchange Rating agencies Sell-side analysts Buy-side institutional analysts and investors in the U.S. and international markets Individual investors Financial media Governance rating firms Management and board of directors Other employees 11

12 Role of IR in Value Creation Market awareness and feedback to management Credibility and consistent communication Numbers of long-term investors; optimize shareholder mix Analyst following Access to capital Share liquidity P/E ratio Share value Corporate governance 12

13 How do you measure the success of your IR program? Increase in the number of sell-side analysts Increase in the number of institutions holding shares Periodic investor quick feedback pools or in-depth perception studies Regular feedback from management on IR plan and programming Decreased volatility in stock trading Increased IR web site interest 13

14 Ask a Question During the live event only August 20, :00 5:00 p.m ET On the telephone call and follow the operator s instructions On your computer click on the Questions link on your computer screen Telephone access provided by In Comm 14

15 Replay Options A replay is available via telephone until midnight on 9/03/09 (Eastern time). Call (USA) or (International) The account number is 286 and the conference I.D. is View this forum on the web until 1/31/10 by going to the webinar page: Webcast provided by VCall, a service of Precision IR 15