Companies that cultivate shareholder value

To conclude our discussion on the benefits of expanding your investor relations program to reach your employee-investors, I thought it might be helpful to see how some companies are doing so.

To conclude our discussion on the benefits of expanding your investor relations program to reach your employee-investors, I thought it might be helpful to see how some companies are doing so.

One company whose efforts in this area I really admire is Total SA. Not only does the company actively communicate with its employee-investors, it cultivated this investor population by implementing a free share plan where every one of its more than 100,000 employees in 124 countries received the rights to 25 shares of Total stock. The share plan was rolled out in 23 different languages and a network of 500 correspondents in 124 countries was established to answer any employee questions. Following the free-share plan, employees were given the opportunity to purchase additional shares at a discount. As a result, by the end of 2011, employees held approximately 8% of the company's shareholder voting rights. Among other things, Total serves this important voting bloc through various dedicated resources, including its intranet site, and substantial involvement by the management team. [Note: while the French government has incentivized French companies to create large retail shareholder bases, there is no obligation to do so.]

Another company whose IR for employee-investors efforts I like is UPS. The Atlanta-based package-delivery company has about 35% of its equity in the hands of current or former employees. According to a recent article in the Brunswick Review, company stock makes up part of many employees' compensation. To serve this audience, the company's IR officer holds town hall meetings with business leaders so they can accurately express Wall Street's sentiment and feedback to employees. Similarly, given that so much of its stock is held by retirees, the company hosts multiple webcasts each year to update them on the company's progress and answer any questions they have. They also host various investor meetings for retirees throughout the year.

Other good examples of investor relations for employee-investors include:

  • At our client KeyBank, new CEO Beth Mooney recently opened the quarterly business leaders' conference call to all employees so she can share her reaction and perspective on the company's quarterly performance to everyone simultaneously.
  • Microsoft regularly posts videos of its CFO discussing the company with an analyst or fund manager on its intranet.
  • BASF produces a dedicated newsletter for employees on IR topics. The company also hosts investor relations forums for employees twice a year so they can hear from a different financial analyst's perspective on the company's stock and future prospects.   

Obviously, there are certain tactics that are more common than others. What's important is that you implement the ones that are most complementary to your other internal communications and IR activities. As with most things in life, a little goes a long way in the area of investor relations for employee-investors.

Keep me posted on your efforts on this front.

Lisa Rose is senior managing director at Dix & Eaton. She can be reached at lrose@dix-eaton.com.

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