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The study, conducted for NIRI by Rivel Research Group, found that the average annual cash compensation—salary plus bonus—for investor relations officers in 2000 increased by 20 percent over the last two years, from $120,500 to the current level of $144,900 among IROs who spend 50 percent or more of their time on investor relations.
Bonuses have also increased. More than four out of five IROs (82 percent) received a bonus in 2000, the average of which was $37,000 (up from $27,300 reported in 1998). The large majority of corporate IR executives (77 percent) received a tax-deferred contribution (such as a 401(k) or an IRA). And one out of four corporate practitioners (25 percent) exercised stock options during 2000, for an average value of $146,700.
Given that larger companies more frequently award bonuses (which are higher than those in smaller firms), large-cap IROs significantly out-earned those in mid- or small-cap companies when bonuses are combined with base salary: $171,700 in large-caps (over $1.5 billion), $141,900 in mid-caps ($500 million to just under $1.5 billion) and $111,200 in small-caps (under $500 million).
And while male IROs continue to earn more than their female counterparts ($162,700 versus $128,800), the gap between them has narrowed substantially since 1998, when their salaries were $154,000 versus $94,400 respectively. On average, the salaries of female IROs rose 36 percent over 1998 levels while those of males increased by 6 percent.
Most investor relations officers have spent the majority of their careers in fields other than investor relations. Specifically, the average corporate IRO has 16 years of business experience, seven of which have been spent in IR.
The common denominator in the background of most investor relations practitioner is finance. Over half these executives (54 percent) report having finance experience before getting involved in IR, twice the level indicated for any other field (such as corporate communications/public relations, marketing/sales, administration and strategic planning).
The survey also found:
Nine in ten companies with NIRI members have IR departments (89 percent). Investor relations typically reports to the CFO or treasurer (68 percent), while one in five IR departments (22 percent) report to the CEO, president or chairman. The typical IR office is staffed by between two and three individuals (2.5, compared to 2.6 in 1999 and 2.8 in 1996). Tracking data from 1999 and 1996 indicates very little change in the functions for which investor relations assumes primary responsibility: 88 percent of IR departments are responsible for relationships with analysts 88 percent are responsible for oversight of content for IR Web site 87 percent manage presentations for analysts 85 percent manage relationships with portfolio managers 85 percent are responsible for targeting investors Strategic positioning/messaging (97 percent) Crisis communications; corporate disclosure counseling; writing press releases/scripts (96 percent) Media relations; targeting investors (92 percent) Producing annual/quarterly reports; oversight of content for the IR web site (91 percent) Earnings conference calls (90 percent) Investor perception studies (89 percent) Webcasts (85 percent) Investor relations practitioners report using IR counselors less often in 2001 than in 1999 and 1996 in four key areas: targeting investors, annual reports, proxy solicitation and analyst presentations.
While investor relations itself takes up the lion's share of time for corporate IROs (67 percent of the average day), other tasks also take up large percentages of time: 56 percent of IROs handle shareholder relations; 50 percent handle corporate communications; 32 percent handle financial media relations; and 25 percent have a role in strategic and corporate planning.
On the agency side of the business, base salaries were only marginally higher in 2000 than in 1998 ($128,000 compared to $125,000). Significantly, fewer counselors received bonuses in 2000 than in 1998 (50 percent versus 55 percent) and the typical amount awarded was lower ($28,000 and $47,500 respectively). For that reason, the average cash compensation (including salary and bonuses paid) for IR counselors declined 7 percent over the past two years, from $153,200 to $141,900.
In terms of specific IR services provided, investor relations counselors are focusing on the following IR activities:
Investor relations counselors continue to favor retainer hiring over project work. A majority of these firms typically works on retainer (58 percent, similar to 61 percent in 1999) while, on average, 35 percent are employed on a project basis.
