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- W266922034 abstract "Straight talk from Wall Street What makes an effective investor relations program? The answer depends to an extent on your position. I will provide the perspective of a Wall Street bank stock analyst. We'll start with the person in charge of investor relations. This person must have a thorough understanding of the company and its financial statements, as well as access to senior management. He or she must be able to perform the delicate task of providing information to analysts and investors without crossing the line of differential disclosure. This person cannot be purely a cheerleader, nor a sugar-coater. The goal is to present a fair picture of current conditions. There is no one spot in the organization from which the head of investor relations should come. For example, at Wachovia Corp. and Mellon Bank Corp. the heads of investor relations are individuals located in the finance part of the organization. Both are excellent. Bank of America Corp. has one individual whose sole responsibility is investor relations and he is the best in the business. Fleet/Norstar Financial Group operates with a team involving the chief financial officer and two individuals with responsibilities in addition to investor relations. Yet the result is quite effective. The form may vary, but in all these cases the end result is an effective program. Unfortunately, in too many companies, including some of the largest banking firms, the head of investor relations is either not knowledgeable about the company and its financial or lacks timely access to senior management. These companies are known for their mishandling of important information, for differential disclosure, and for the dreaded surprise announcement. Responsive voice. As important as the quality of information disseminated is its timeliness. Institutional analysts and investors are under ever-increasing pressure to gain access to important information and draw investment conclusions. At First Union Corp. and Wells Fargo & Co., investor relations staffs are briefed about the company's quarterly earnings just before they are released. In this way, several individuals at the company are then able to answer questions from analysts and investors once the earnings release is made public. At other companies there is only one individual available to answer questions. This inevitably leads to long delays in receiving answers and effectively puts some analysts at a significant competitive disadvantage. However, because there are more investors and analysts than staffers, at times priorities will have to be made as to who is called first. Don't just return calls in the order they are received. In my opinion, the top priorities should be large shareholders and those Wall Street analysts who have been particularly visible (both positive and negative) in providing research on the company. This may seem unfair, but it will lead to quickest dissemination of information. Good, timely disclosure. Analysts are never satisfied with the level of disclosure. So it's only natural that one of the traits that I find in the best investor relations programs is excellent disclosure of timely information. Recent examples of breakthroughs in the disclosure of important new information include: * A reconciliation of flows in nonperforming assets provided by Valley National Corp., Bank of Boston Corp., and Shawmut National Corp. * First Tennessee National Corp. provides a breakdown of its loan portfolio by risk rating. * Wells Fargo provides excellent disclosure of the cash payments received on nonperforming loans. The goal of increased disclosure should be to put meat on the bones of the company's required financial statements. The enhanced disclosure of asset quality trends previously described, as well as line-of-business results, are quite helpful in this regard. …" @default.
- W266922034 created "2016-06-24" @default.
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- W266922034 date "1992-01-01" @default.
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- W266922034 title "Straight Talk from Wall Street" @default.
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