2017 Global Trends in Investor Relations

Transcription

1 Global Trends in Investor Relations

2 Primacy of Geopolitical Risk Geopolitical risk is still the number one concern for companies globally. Concern is increasing regarding the impact of emerging markets growth and commodity prices. The sources for all content in this presentation, unless otherwise noted, are the reports 2017 Global Trends in Investor Relations and 2017 Global Trends in Investor Relations: A Survey Analysis of IR Practices in Brazil (accessed June 19, 2018). 1

3 Perceived Decline in the Influence of Global Markets In 2017, 27% fewer respondents than in 2013 chose the global economic environment as having an impact on demand for their companies. 2

4 Decline in focus on Financial Center Markets Investor relations teams globally are focusing less on international investors and more on investors in their home markets. Major global financial centers experienced a drop in their perceived strategic importance, with the United States being seen as the most resilient. 3

5 Shifting Focus in Shareholder Targeting There has been a shift in top IR goals, from targeting investors by geography to embracing a more diversified shareholder base over time. 4

6 Strategic Targeting Objectives for Brazilian Respondents WHAT ARE YOUR TOP GOALS FOR THE INVESTOR RELATIONS FUNCTION/PROGRAM IN THE NEXT 12 MONTHS?* 5

7 Criteria for Investor Targeting Tactical targeting criteria, such as type of investor, regional, country, or thematic focus, have decreased in importance. CRITERIA USED BY THE INVESTOR RELATIONS DEPARTMENT TO TARGET NEW EQUITY INVESTORS 6

8 Criteria for Investor Targeting: Brazilian Respondents Of Brazilian respondents, 18% reported that they do not target new investors at all. WHAT CRITERIA ARE USED BY THE INVESTOR RELATIONS DEPARTMENT TO TARGET NEW EQUITY INVESTORS?* 7

9 Investor Relations in the Driver s Seat Companies are increasingly prioritizing the use of their own investor targets when selecting brokers for roadshows. 8

10 Criteria for Interaction with the Sell Side: Brazil Prioritization of the ability to provide targets to brokers for roadshows is growing in Latin America as we have seen on the previous slide, but it is less of a priority for Brazilian issuers than is equity sales capabilities or geographic presence. WHICH OF THE FOLLOWING CRITERIA DOES YOUR COMPANY USE TO SELECT A BROKER FOR A NON-DEAL ROADSHOW?* 9

11 Brazilian Interaction with the Investment Community WHAT IS THE TOTAL NUMBER OF INVESTOR ONE-ON-ONE MEETINGS YOU HOLD PER YEAR: WHAT PERCENTAGE OF INVESTOR ONE-ON-ONE MEETINGS THAT YOUR COMPANY HOLDS IN A YEAR ARE CONDUCTED BY INVESTOR RELATIONS STAFF WITHOUT THE PRESENCE OF SENIOR MANAGEMENT? 10

12 Growing ESG Engagement Companies that engage socially responsible and/or Environmental, Social and Governance investors are more focused on ESG activities than their global peers. 11

13 ESG Investor Engagement 34% of companies globally communicated with ESG investors 61% of such companies are mega- and large-caps Due to rounding, percentage total equals 101%. 12

14 ESG Outreach: Brazilian Respondents DOES YOUR COMPANY REACH OUT TO SOCIALLY RESPONSIBLE AND/OR ESG INVESTORS TO TARGET THEM AS POTENTIAL INVESTORS? 13

15 Interaction with the Investment Community: Brazil ESG outreach for Brazilian respondents includes an increased focus on investor relations activity by the CSR team than global or emerging markets peers. DO THE FOLLOWING POSITIONS IN YOUR COMPANY DEVOTE TIME TO IR-RELATED ACTIVITIES?* 14

16 Passive Investor Engagement 32% of companies globally communicated with passive investors 56% of such companies are mega- and large-caps 62% of North American respondents expect the increase in the proportion of passive investors in their shareholder base to have the greatest influence on the job of investor relations over the next 10 years, compared to 41% of respondents globally 15

17 The Market Cap Challenge: Internal Resource Constraints 16

18 The Market Cap Challenge: External Resource Constraints 17

19 Global Gender Snapshot: Female Female Investment Relations Officers (IROs) globally earn nearly one-third (31%) less than their male counterparts (total mean salary and bonus). 18

20 Global Gender Snapshot: Male The salary gap was much greater in emerging markets, where male IROs earn almost two-thirds (65%) more compared to female IROs. 19

21 Snapshot of Brazilian Respondents IR Personnel Brazilian IR teams most closely matched the structure and budget of global mega and large-cap financials peers, who reported 6.5 people and an average budget of $762,868. WHAT IS THE TOTAL ANNUAL BUDGET IN U.S. DOLLARS FOR YOUR COMPANY'S INVESTOR RELATIONS PROGRAM (excluding staff compensation/remuneration)? HOW MANY EMPLOYEES ARE IN YOURCOMPANY'S IR DEPARTMENT? 20

22 Global Snapshot: Professional Background 75% of respondents most senior investor relations officers are currently a member of at least one management committee. 21

23 Global Snapshot: Professional Background Former sell-siders and buy-siders who are now IROs rank quality of analyst research lower than IROs with previous IR background. 22

24 Accuracy of the Sell Side: Brazilian Respondents Brazilian respondents were less likely than global or emerging markets peers to see brokerage research coverage as accurate, especially over the medium and long term. DO YOU FEEL THAT YOUR CURRENT ANALYST COVERAGE CORRECTLY REFLECTS THE OUTLOOK FOR YOUR COMPANY'S PERFORMANCE IN THE FOLLOWING TIMEFRAMES:* Strikingly, 80% reported that they were either uncertain, or did not agree with the accuracy of their long-term research coverage. 23

25 12-Month IR Objectives: Brazilian Respondents As in our 2015 study, Brazilian respondents as a group were more likely to focus on increasing liquidity (55% in 2015 ) than their global peers (22%).¹ WHAT ARE YOUR TOP GOALS FOR THE INVESTOR RELATIONS FUNCTION/PROGRAM IN THE NEXT 12 MONTHS?* 1 BNY Mellon, Global Trends in Investor Relations: A Survey Analysis of IR Practices in Brazil 2015, p. 15 (accessed June 19, 2018). 24

26 The Most Essential Skill for the Future of IR: Brazilian Respondents BASED ON YOUR EXPERIENCE, WHAT WOULD YOU RANK AS THE MOST ESSENTIALSKILLS FOR FUTURE IR PRACTITIONERS?* 25

27 An Eye for the Future of Investor Relations 56% of our survey respondents identified changes in the growth of passive investment as being expected to have the greatest influence led by North America (62%). 26

28 Influences on the Future of the Profession: Brazilian Respondents Brazilian respondents opinions contrasted with the global average, with only 35% citing Changing Shareholder Structure as a key concern, compared to 56% globally, focusing instead on the Inclusion of Nonfinancial Factors (53%) and Market Transparency (53%). OVER THE NEXT 10 YEARS, WHICH OF THE FOLLOWING AREAS WILL HAVE THE GREATEST INFLUENCE ON THE FUNCTION OF INVESTOR RELATIONS?* 27

29 Global Methodology: Respondent Profiles 537 Total Respondents 51 Countries Represented 28

30 Methodology for Brazilian Respondents 57 PRIMARY CONTACT FOR INVESTMENT COMMUNITY: MALE Total Brazilian respondents Emerging Markets Developed Markets Argentina Brazil Chile Columbia Mexico Peru Czech Republic Egypt Greece Hungary Poland Russia South Africa Turkey China India Indonesia South Korea Malaysia Nigeria Philippines Saudi Arabia Taiwan Thailand Vietnam Canada United States Austria Belgium Denmark Finland France Germany Ireland Israel Italy Netherlands Norway Portugal Spain Sweden Switzerland United Kingdom Australia Hong Kong Japan New Zealand Singapore FEMALE *Certain data may have been omitted from such graphics for purposes of this presentation. 29

31 BNY Mellon is a global investments company dedicated to helping its clients manage and service their financial assets throughout the investment lifecycle. Whether providing financial services for institutions, corporations or individual investors, BNY Mellon delivers informed investment management and investment services in 35 countries. As of March 31, 2018, BNY Mellon had $33.5 trillion in assets under custody and/or administration, and $1.9 trillion in assets under management. BNY Mellon can act as a single point of contact for clients looking to create, trade, hold, manage, service, distribute or restructure investments. BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). Additional information is available on Follow us on or visit our newsroom at for the latest company news. This document, which may be considered advertising, is for general information and reference purposes only and is not intended to provide legal, tax, accounting, investment, financial or other professional advice on any matter, and is not to be used as such. BNY Mellon does not warrant or guarantee the accuracy or completeness of, nor undertake to update or amend the information or data contained herein. We expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon any of this information or data. We provide no advice nor recommendation or endorsement with respect to any company or securities. Nothing herein shall be deemed to constitute an offer to sell or a solicitation of an offer to buy securities. If distributed in the UK or EMEA, this document may be a financial promotion and is for distribution only to persons to whom it may be communicated without breach of applicable law. This document is not intended for distribution to, or use by, any person or entity in any jurisdiction in which such distribution or use would be contrary to local law or regulation. Similarly, this document may not be distributed or used for the purpose of offers or solicitations in any jurisdiction or in any circumstances in which such offers or solicitations are unlawful or not authorized, or where there would be, by virtue of such distribution, new or additional registration requirements. Persons into whose possession this document comes are required to inform themselves about and to observe any restrictions that apply to the distribution of this document in their jurisdiction. The information contained in this document is for use by wholesale clients only and is not to be relied upon by retail clients. BNY Mellon has various subsidiaries, affiliates, branches and representative offices in the Asia Pacific Region that are subject to regulation by the relevant local regulator in that jurisdiction. Not all products and services are offered in all locations. This material may not be reproduced or disseminated in any form without the prior written permission of BNY Mellon. Depositary Receipts: NOT FDIC, STATE OR FEDERAL AGENCY INSURED MAY LOSE VALUE NO BANK, STATE OR FEDERAL AGENCY GUARANTEE Trademarks and logos belong to their respective owners The Bank of New York Mellon Corporation. All rights reserved.

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