ABOUT half of Fortune 500 IROs polled say they earn more than $300,000 in cash plus a wide range of equity incentives and other benefits, according to a survey conducted by Korn/Ferry International and the National Investor Relations Institute (NIRI).
Key survey findings for Fortune 500 respondents:
- At least four out of five Fortune 500 IROs surveyed report to the CFO or the CEO.
- Almost half of Fortune 500 respondents (43 percent) have responsibilities other than investor relations, including financial media relations, corporate communications and financial analysis.
- The majority of Fortune 500 respondent IROs (61 percent) have one to two direct investor relations reports, not including administrative staff.
- Fifty-five percent of respondents from the Fortune 500 earn an annual base salary of more than $200K, and 43 percent receive an annual cash bonus of more than $100K. The largest segment (57 percent) indicate a target annual cash bonus of 26 to 50 percent.
- Approximately three-quarters of Fortune 500 IRO survey respondents also receive stock options and or restricted stock/units as the equity portion of their compensation. Other widespread benefits include deferred compensation plans (53 percent) and medical examinations (43 percent).
- A large proportion of Fortune 500 respondent IROs (39 percent) manage IR budgets between $500,000 and $999,999, while another 34 percent of executives report budgets in the range of $1 million to $2,499,999. These figures do not include annual report costs, stock market listing fees, allocated overhead or salaries and benefits.
- Almost one-third (32 percent) of Fortune 500 respondents indicate that 10-14 sell-side analysts cover their company, with another 28 percent indicating they have 20 or more analysts.
- Among the Fortune 500 respondents, almost one-third (32 percent) has more than 12 years of investor relations experience.
- Sixty-one percent of Fortune 500 respondents have an MBA and 23 percent are CPAs.
Key survey findings for NIRI corporate member (non-Fortune 500) respondents include:
- The largest segment, one-third, of NIRI respondents earn between $126,000 and $175,000 and over 95 percent receive a cash bonus, with a typical bonus target of under 50 percent of base salary.
- More than half (58 percent)of NIRI respondents receive stock options and half (50 percent) receive restricted stock/units as part of their compensation packages.
- The largest proportion of NIRI respondents (23 percent) has more than 12 years of experience.
- Of NIRI respondents, 51 percent report to the CFO and 19 percent report to the president/CEO.
- Over half of NIRI respondents (53 percent) have between five and 14 sell-side analysts covering their companies.
- Sixty-two percent of NIRI respondents have responsibilities in addition to investor relations.
“These findings reinforce what we are hearing from our membership,” said Jeffrey D. Morgan, president and chief executive officer of NIRI in a statement. “The IRO is facing an increasingly complex business and legal environment that requires practitioners to broaden their skills set in order to meet the needs of the business and be effective members of the corporate leadership team.”
“Today’s investor relations professional needs to operate in a strategic and consultative capacity with leadership to clearly define and articulate messages as well as carefully choreograph their release to meet regulatory requirements and broader communications objectives,” says Richard Marshall, senior client partner with Korn/Ferry International. “Companies expect IRO candidates with deep financial and business acumen, strong relationships with the Street, and the ability to provide strategic communications counsel. And for that, they are willing to pay for the top talent.”
The first annual NIRI-Korn/Ferry International IRO Compensation Survey was an electronic survey of NIRI corporate members and Fortune 500 IROs (nearly 80% of whom are NIRI members) in late 2007. The response rate was 29 percent among Fortune 500 IROs and 25 percent among NIRI members.