NIRI lets members accept stock as pay for services

VIENNA, VA: The National Investor Relations Institute’s Board of Directors has reversed its longstanding policy against IR consultants accepting stock for services - a decision that already has some pros rethinking their compensation strategies.

VIENNA, VA: The National Investor Relations Institute’s Board of Directors has reversed its longstanding policy against IR consultants accepting stock for services - a decision that already has some pros rethinking their compensation strategies.

VIENNA, VA: The National Investor Relations Institute’s Board of

Directors has reversed its longstanding policy against IR consultants

accepting stock for services - a decision that already has some pros

rethinking their compensation strategies.



Woody Wallace, founder and chairman of The Investor Relations Company

and a member of NIRI’s Senior Seminar, said that until the recent NIRI

decision, he never considered swapping stock for services, even though

he’d seen some of his colleagues make millions doing so.



Recently, Wallace was approached by a small investment bank in Atlanta

looking to exchange up to 350,000 shares valued at $1 a share for a

year’s worth of IR services. ’We’re seriously considering this, but we

wouldn’t be if it wasn’t for the nod from NIRI,’ he said. ’It’s not a

done deal.



But let’s face it: they’re a small company who can’t afford the

services, and this could turn out to be a tremendous account for

us.’



NIRI’s original rationale behind the prohibition was to prevent the

appearance of conflicts of interest and to address concern over the

SEC’s investigation of consultants who allegedly promoted stocks in

order to artificially inflate their prices. While those situations have

not changed significantly, NIRI has acknowledged that stock is the

preferred ’currency’ of many new economy start-ups.



’We also found that the policy was forcing companies to go to stock

promoters flying under an IR banner,’ said NIRI prexy Lou Thompson. ’As

a result of the rule, the companies were not availing themselves of

legitimate, sound IR consulting.’



Regardless of the NIRI decision, there are still those in the IR

community - like Rein Nomm, president of IR consultancy Rein Nomm &

Associates - who will not take stock in client companies. Nomm, a former

president of NIRI’s Michigan chapter, said aside from the obvious

conflicts of interest, ’A lot of (the stock) turns out to be worthless

paper.’



Nomm even claims to regularly turn away business from smaller ’bulletin

board’ companies. He pointed out that most NYSE- and Nasdaq-listed

companies still pay cash for services.



’I really hope this is not the way this industry is headed,’ he

said.



’That’s just not the way I want to do business.’



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