2014 STUDY ON HOW IN VE STMENT HORIZON
AND E X PEC TATIONS OF SHAREHOLDER BA SE
IMPAC T C ORP OR ATE DECISION - M AKIN G
TA B L E O F C O N T E N T S
Executive Summary and Key Findings............... 1
Review of Findings..........................
2014 Study on How Investment Horizon and Expectations of Shareholder Base Impact Corporate Decision-Making 	 1
Executive S...
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Companies d...
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Review of F...
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3.	What is ...
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Pension Fun...
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Directors o...
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5.	How woul...
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Capital Mar...
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11.	 To wha...
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12. To wha...
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Long-term ...
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Votes cons...
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15.	 Suppo...
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Demographi...
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What is th...
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Methodolog...
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About the ...
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About NIRI...
2014 Study on How Investment Horizon and Expectations of Shareholder Base Impact Corporate Decision-Making with The Nation...
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2014 Study on How Investment Horizon and Expectations of Shareholder Base Impact Corporate Decision-Making with The National Investor Relations Institute (NIRI)

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Executives View Ideal Shareholder Base as Key to Increased Market Value
Companies that want to maximize their market value would do well to pay attention to shareholder composition.

This study found that nearly all companies describe their ideal shareholder as having a long-term investment horizon, but that about half of companies’ shareholder base has a short- or medium-term horizon. As a result, the authors find, most companies see significant upside to managing their shareholder base, and senior leaders spend considerable time meeting with current and prospective investors.

“More than three-quarters of companies in our survey see significant stock market benefits from managing their shareholder base,” says Anne Beyer, associate professor of accounting at Stanford Graduate School of Business (GSB) and coauthor of the study. “Companies believe that if they can identify and attract the right shareholder base, they will be able to increase the price of their stock and decrease its volatility.”

In fact, this survey of 138 investor relations professionals at North American companies shows that 80% of companies believe their stock price would trade higher over a two- to three-year period if they could attract their ideal shareholder base. On average, companies estimate their stock would rise 15% and share price volatility would decrease 20%.

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2014 Study on How Investment Horizon and Expectations of Shareholder Base Impact Corporate Decision-Making with The National Investor Relations Institute (NIRI)

  1. 1. 2014 STUDY ON HOW IN VE STMENT HORIZON AND E X PEC TATIONS OF SHAREHOLDER BA SE IMPAC T C ORP OR ATE DECISION - M AKIN G
  2. 2. TA B L E O F C O N T E N T S Executive Summary and Key Findings............... 1 Review of Findings......................................... 3 Demographics.............................................14 Methodology...............................................16 About the Authors........................................17 About NIRI and the Rock Center.....................18 Contact Information......................................18
  3. 3. 2014 Study on How Investment Horizon and Expectations of Shareholder Base Impact Corporate Decision-Making 1 Executive Summary and Key Findings Nearly all companies prefer long-term investors but about half of investors have a shorter horizon — with significant consequences for companies’ strategic decisions and stock market performance Nearly all companies describe their ideal shareholder as having a long-term investment horizon but about half of companies’ shareholder base has a short-or medium-term horizon. As a result, most companies see significant upside to managing their shareholder base and senior leaders spend considerable time meeting with current and prospective investors. “More than three-quarters of companies in our survey see significant stock market benefits from managing their shareholder base,” says Professor Anne Beyer, Associate Professor of Accounting at the Stanford Graduate School of Business and co-author of the study. “Companies believe that if they can identify and attract the right shareholder base, they will be able to increase the price of their stock and decrease its volatility.” “Companies want long-term shareholders in particular because it allows them to implement their corporate strategy and make long-term investments without the distraction and short-term performance pressures that come from active traders,” says Professor David F. Larcker, James Irvin Miller Professor of Accounting and Senior Faculty at the Rock Center for Corporate Governance. “We find that the investor relations department can create a real competitive advantage by attracting a shareholder base with the same long-term investment horizon as the company.” The study, conducted in partnership with the National Investor Relations Institute (NIRI), surveyed 138 investor relations professionals at North American companies about the investment horizon and expectations of their shareholder base and the impact that these have on corporate decision-making. Companies believe that short-term investors distract from strategic decisions Nearly two-thirds of companies (65%) agree or strongly agree that a company whose shareholder base is dominated by short-term investors cannot focus on strategic decisions because of a focus on short-term results. Just over half (51%) believe that short-term investors lead a company to focus on cost cutting. The majority of companies (57%) agree or strongly agree that a company whose shareholder base is dominated by short-term investors will have reduced market value and/or reduced long-term growth. However, being able to make strategic acquisitions is generally not a concern even if the shareholder base is dominated by investors with short-term investment horizons (only 26% of companies indicate strategic acquisitions as an area of concern). “Investors with short-term horizons pay close attention not only to stock prices in the near term but also the companies’ short-term performance as reported in their financial statements. If short- term projects yield lower returns on investment than long-term projects as it is often the case, a shareholder base dominated by short-term investors can become a real challenge for companies,” says Professor Larcker. The ideal shareholder base consists of long-term investors – still “long-term” is not that long Companies are most likely to describe their ideal shareholder as having a “long-term investment horizon,” with the vast majority (92%) listing this quality. Still, a “long-term” investment horizon doesn’t have to be that long. On average, companies estimate the investment horizon of a typical long-term investor to be at least 2.8 years. By contrast, short-term investors are seen as having an investment horizon of 7 months or less. Not surprisingly, most companies agree or strongly agree that desirable shareholders are not activists (87%). About two-thirds of companies don’t want a concentration of ownership and pay attention to the price at which an investor acquired a company’s shares. The geographical location in which the shareholder resides plays virtually no role with only 7% of the companies deeming this an important shareholder characteristic. Companies want to increase ownership of management, employees and pension funds Top management and corporate directors are seen as having the longest investment horizon among major shareholder groups, with 93% and 92% of companies describing their investment horizon as long-term or somewhat long-term, respectively. Among other major shareholder groups, pension funds are seen as having the longest investment horizon.
  4. 4. 2014 Study on How Investment Horizon and Expectations of Shareholder Base Impact Corporate Decision-Making 2 Companies don’t want hedge fund or private equity investors When asked to describe their ideal shareholder base, companies are most likely to want hedge funds to own a lower percentage of their shares. Currently, companies report that approximately 8% of their shares are held by hedge funds. Ideally, this figure would be 3%, a 60 percent reduction. One reason for the reduction seems to be that hedge fund investors are seen as short-term oriented. 94% of companies believe that hedge funds have a short-term or somewhat short-term investment horizon. Zero companies believe they have a long-term horizon. Also, all companies that reported being partially owned by private equity (PE) want to reduce the ownership of PE investors. In fact, all of these companies want to see the ownership of PE investors go down to zero. Companies believe that their stock price would be higher if they had their ideal shareholder base Most companies (80%) believe that their stock price would trade higher over a two to three year period if they could attract their ideal shareholder base. On average, companies estimate their stock would rise 15% and share price volatility decrease 20%. These stock-market effects seem to be driven by companies’ beliefs that a more suitable shareholder base would allow management to implement the company’s strategy more effectively, put less pressure on management to focus on short-term results, and provide higher quality feedback on management’s decision. Three-quarters of companies (76%) agree or strongly agree with at least one of these three factors being a benefit of attracting their ideal shareholder base. “Companies see very large, tangible benefits to managing their shareholder base, so there seems to be a real opportunity for some companies to improve corporate decisions and increase their value by paying close attention to who holds their shares,” says Professor Beyer. Senior leaders spend considerable time managing their shareholder base Almost all companies (91%) discuss the composition of their shareholder base at the senior executive level. A large majority (75%) discusses this at the board level. On average, the CEO spends 4.2 days per quarter managing the company’s shareholder base. As might be expected, the CFO spends even more time – 6.4 days on average. “The amount of time senior leaders spend on developing their company’s shareholder base shows a real recognition of the importance of shareholder characteristics for a company’s performance. Understanding how shareholders affect management decisions is key for any company,” says Professor Larcker. Companies rely on road shows and investor conferences – fewer companies actively reach out to potential investors When it comes to actively managing their shareholder base, companies most frequently rely on investor conferences, road shows, and meetings of current and potential shareholders with top management or members of the board. About three- quarters of the companies use these tools at least on a quarterly basis. Significantly fewer companies actively approach potential shareholders with more than 40% of companies pursuing this strategy less than twice a year.
  5. 5. 2014 Study on How Investment Horizon and Expectations of Shareholder Base Impact Corporate Decision-Making 3 Review of Findings Composition of Shareholder Base 1. What is the investment horizon of a typical investor (in years)? Short-term investor 0.6 years or less Medium-term Between 0.9 and 2.3 years Long-term 2.8 years or longer 2. How important are the following to a long-term investor? Next quarter’s earnings Percent 1 Extremely important 67 Somewhat important 31 Not at all important Stable/smooth earnings path Percent 49 Extremely important 45 Somewhat important 7 Not at all important Growth opportunities Percent 95 Extremely important 5 Somewhat important 0 Not at all important Cost cutting Percent 17 Extremely important 69 Somewhat important 14 Not at all important Payout policy (dividends and share repurchases) Percent 46 Extremely important 46 Somewhat important 8 Not at all important Active engagement with the company regarding management decisions Percent 30 Extremely important 47 Somewhat important 22 Not at all important Sustainability of the firm’s business model Percent 98 Extremely important 2 Somewhat important 0 Not at all important
  6. 6. 2014 Study on How Investment Horizon and Expectations of Shareholder Base Impact Corporate Decision-Making 4 3. What is the typical investment horizon of the following shareholder groups? Retail shares held in street name Percent 13 Long-term 21 Somewhat long-term 33 Medium-term 23 Somewhat short-term 9 Short-term Retail shares held in personal name Percent 25 Long-term 22 Somewhat long-term 30 Medium-term 17 Somewhat short-term 4 Short-term Passive Fund – Index Percent 46 Long-term 31 Somewhat long-term 13 Medium-term 6 Somewhat short-term 4 Short-term Active Fund -Growth Percent 6 Long-term 33 Somewhat long-term 38 Medium-term 19 Somewhat short-term 4 Short-term Active Fund – Value Percent 17 Long-term 41 Somewhat long-term 30 Medium-term 11 Somewhat short-term 1 Short-term Hedge Fund; long/short positions Percent 0 Long-term 0 Somewhat long-term 6 Medium-term 28 Somewhat short-term 67 Short-term
  7. 7. 2014 Study on How Investment Horizon and Expectations of Shareholder Base Impact Corporate Decision-Making 5 Pension Fund Private Percent 39 Long-term 39 Somewhat long-term 20 Medium-term 2 Somewhat short-term 0 Short-term Pension Fund Unions Percent 36 Long-term 46 Somewhat long-term 16 Medium-term 2 Somewhat short-term 0 Short-term Pension Fund Public Percent 42 Long-term 46 Somewhat long-term 12 Medium-term 1 Somewhat short-term 0 Short-term Activist Individual Percent 1 Long-term 3 Somewhat long-term 17 Medium-term 39 Somewhat short-term 41 Short-term Activist Fund Percent 1 Long-term 4 Somewhat long-term 22 Medium-term 36 Somewhat short-term 37 Short-term Top Management Percent 77 Long-term 16 Somewhat long-term 4 Medium-term 3 Somewhat short-term 0 Short-term
  8. 8. 2014 Study on How Investment Horizon and Expectations of Shareholder Base Impact Corporate Decision-Making 6 Directors of the company Percent 76 Long-term 16 Somewhat long-term 6 Medium-term 2 Somewhat short-term 0 Short-term Employee stock ownership plan (ESOP) Percent 53 Long-term 22 Somewhat long-term 18 Medium-term 4 Somewhat short-term 3 Short-term 4. What is the current composition of your company’s shareholder base? Percent 7.6 Retail shares held in street name 3.7 Retail shares held in personal name 14.3 Passive Fund – Index 23.0 Active Fund – Growth 15.3 Active Fund – Value 8.1 Hedge Fund; long/short positions 1.8 Pension Fund Private: 0.9 Pension Fund Unions 1.7 Pension Fund Public 0.4 Activist Individual 1.3 Activist Fund 5.0 Top Management 3.4 Directors of the company 1.4 Employee stock ownership plan (ESOP) 8.7 Other 3.4 Unknown Note: The differences between Q4 and Q10 is due to different sample sizes. For Q10, the sample size is smaller than for Q4. The “Actual” column on Q10 only includes the firms that responded to the question of the “Ideal” shareholder base.
  9. 9. 2014 Study on How Investment Horizon and Expectations of Shareholder Base Impact Corporate Decision-Making 7 5. How would you characterize the investment horizon of your company’s current shareholder base? Percentage of shareholder base best described as Percent 9.5 Exclusively short-term 12.2 Somewhat short-term 24.7 Medium-term 24.1 Somewhat long-term 25.6 Exclusively long-term 4.0 Unknown Management of Shareholder Base 6. Is the composition of the shareholder base discussed at the C-level or Board in your company? Board-Level Percent 75 Yes 13 No 12 Don’t know C-Level Percent 91 Yes 7 No 2 Don’t know 7. How frequently do you employ the following strategies in order to actively manage your company’s shareholder base? Road shows Percent 37 More than quarterly 39 Quarterly 12 Semi-annually 5 Annually 7 Less than annually Investor conferences Percent 50 More than quarterly 33 Quarterly 7 Semi-annually 7 Annually 2 Less than annually Identify and actively approach shareholders (targeting) Percent 29 More than quarterly 28 Quarterly 15 Semi-annually 12 Annually 16 Less than annually
  10. 10. 2014 Study on How Investment Horizon and Expectations of Shareholder Base Impact Corporate Decision-Making 8 Capital Market Day (company specific, no conference) Percent 2 More than quarterly 0 Quarterly 2 Semi-annually 32 Annually 64 Less than annually Enable meetings of current shareholders with board members and/or top management Percent 49 More than quarterly 22 Quarterly 9 Semi-annually 8 Annually 12 Less than annually Enable meetings of prospective shareholders with board members and/or top management Percent 48 More than quarterly 26 Quarterly 8 Semi-annually 5 Annually 13 Less than annually 8. How much time do the following executives spend actively managing shareholder base (days/quarter)? CEO – 4.2 days/quarter CFO – 6.4 days/quarter 9. How much time does the investor relations function spend actively managing the shareholder base (days/quarter)? 31.3 days/quarter Ideal Target/Shareholder Base 10. Describe your ideal or best possible composition of your company’s shareholder base versus your actual shareholder base: Ideal Actual Difference Retail shares held in street name 5.8% 7.4% -1.6% Retail shares held in personal name 3.7% 3.9% -0.2% Passive Fund - Index 15.3% 14.6% 0.7% Active Fund -Growth 25.0% 23.0% 2.0% Active Fund - Value 16.9% 14.6% 2.3% Hedge Fund; long/short positions 3.2% 8.4% -5.2% Pension Fund Private 3.9% 1.4% 2.5% Pension Fund Unions 1.6% 1.0% 0.6% Pension Fund Public 3.6% 2.0% 1.6% Activist Individual 0.0% 0.0% 0.0% Activist Fund 0.0% 1.3% -1.3% Top Management 6.1% 4.3% 1.8% Directors of the company 3.2% 3.6% -0.4% Employee stock ownership plan (ESOP) 3.1% 1.4% 1.7% Other 2.7% 9.8% -7.1% Unknown 6.1% 3.5% 2.6% Note: The differences between Q4 and Q10 is due to different sample sizes. For Q10, the sample size is smaller than for Q4. The “Actual” column on Q10 only includes the firms that responded to the question of the “Ideal” shareholder base.
  11. 11. 2014 Study on How Investment Horizon and Expectations of Shareholder Base Impact Corporate Decision-Making 9 11. To what extent do you agree with the following statements? “If the company attracted its ideal/target shareholder base…:” Management would face less pressure to focus on short-term results Percent 12 Strongly agree 46 Agree 24 Neither agree nor disagree 15 Disagree 3 Strongly disagree Management could implement the company’s strategy more effectively Percent 6 Strongly agree 33 Agree 37 Neither agree nor disagree 19 Disagree 5 Strongly disagree Management could make better investment decisions Percent 6 Strongly agree 24 Agree 42 Neither agree nor disagree 21 Disagree 7 Strongly disagree Management could more easily pursue value-enhancing strategic M&A transactions Percent 7 Strongly agree 24 Agree 46 Neither agree nor disagree 20 Disagree 4 Strongly disagree Shareholders would provide higher quality feedback on management’s decision Percent 14 Strongly agree 34 Agree 38 Neither agree nor disagree 10 Disagree 4 Strongly disagree Board would be able to focus on business rather than appeasing certain shareholders Percent 8 Strongly agree 25 Agree 38 Neither agree nor disagree 22 Disagree 7 Strongly disagree
  12. 12. 2014 Study on How Investment Horizon and Expectations of Shareholder Base Impact Corporate Decision-Making 10 12. To what extent do you agree with the following statements? “The ideal/target shareholder for our company is characterized by:” Holding only long positions Percent 14 Strongly agree 48 Agree 18 Neither agree nor disagree 19 Disagree 2 Strongly disagree Ownership not over 10% Percent 16 Strongly agree 48 Agree 23 Neither agree nor disagree 12 Disagree 1 Strongly disagree Ownership not over 5% Percent 5 Strongly agree 24 Agree 36 Neither agree nor disagree 32 Disagree 4 Strongly disagree Non-activist Percent 41 Strongly agree 46 Agree 11 Neither agree nor disagree 2 Disagree 0 Strongly disagree Invested at a price below current price Percent 11 Strongly agree 46 Agree 37 Neither agree nor disagree 7 Disagree 1 Strongly disagree Invested at a price close to current price Percent 0 Strongly agree 21 Agree 63 Neither agree nor disagree 15 Disagree 2 Strongly disagree
  13. 13. 2014 Study on How Investment Horizon and Expectations of Shareholder Base Impact Corporate Decision-Making 11 Long-term investment horizon Percent 51 Strongly agree 41 Agree 8 Neither agree nor disagree 0 Disagree 0 Strongly disagree Medium-term investment horizon Percent 12 Strongly agree 69 Agree 18 Neither agree nor disagree 1 Disagree 0 Strongly disagree Short-term investment horizon Percent 0 Strongly agree 8 Agree 22 Neither agree nor disagree 46 Disagree 24 Strongly disagree Pursues investment strategy focused on growth Percent 15 Strongly agree 54 Agree 25 Neither agree nor disagree 6 Disagree 0 Strongly disagree Pursues investment strategy focused on value Percent 7 Strongly agree 57 Agree 28 Neither agree nor disagree 8 Disagree 1 Strongly disagree Has preference for increase in dividend payments Percent 6 Strongly agree 28 Agree 34 Neither agree nor disagree 22 Disagree 11 Strongly disagree
  14. 14. 2014 Study on How Investment Horizon and Expectations of Shareholder Base Impact Corporate Decision-Making 12 Votes consistently with management Percent 20 Strongly agree 37 Agree 37 Neither agree nor disagree 6 Disagree 0 Strongly disagree Does not vote Percent 1 Strongly agree 3 Agree 33 Neither agree nor disagree 42 Disagree 20 Strongly disagree Resides in a specific geographical location Percent 0 Strongly agree 7 Agree 37 Neither agree nor disagree 33 Disagree 23 Strongly disagree Possesses substantial industry expertise Percent 6 Strongly agree 37 Agree 44 Neither agree nor disagree 9 Disagree 4 Strongly disagree 13. Do you expect that a change in your shareholder base toward your ideal/target composition would have a positive impact on your share price over the next two to three years? Percent 80 Yes 20 No 14. Suppose you could change the composition of your shareholder base such that the ownership of an ideal investor as described above increases by 10% which of the following benefits would you expect to realize over the next two to three years: Increase in share price – 15.4% increase Decrease in volatility – 19.6% decrease Increase in trading volume – 5.9% increase
  15. 15. 2014 Study on How Investment Horizon and Expectations of Shareholder Base Impact Corporate Decision-Making 13 15. Suppose a company in your industry has a shareholder base that is dominated by investors with short-term investment horizons. To what extent to you agree with the following statements? “A company with a shareholder base that is dominated by investors with short-term investment horizons…” Has reduced market value Percent 7 Strongly agree 34 Agree 40 Neither agree nor disagree 20 Disagree 0 Strongly disagree Has reduced long-term growth Percent 6 Strongly agree 36 Agree 36 Neither agree nor disagree 22 Disagree 0 Strongly disagree Cannot focus on strategic decisions because of the focus on short-term success Percent 7 Strongly agree 58 Agree 21 Neither agree nor disagree 13 Disagree 0 Strongly disagree Focuses on cost-cutting Percent 7 Strongly agree 44 Agree 36 Neither agree nor disagree 12 Disagree 1 Strongly disagree Cannot effectively implement the company’s strategy Percent 2 Strongly agree 37 Agree 40 Neither agree nor disagree 19 Disagree 2 Strongly disagree Is restricted from making strategic acquisitions Percent 3 Strongly agree 22 Agree 45 Neither agree nor disagree 25 Disagree 4 Strongly disagree
  16. 16. 2014 Study on How Investment Horizon and Expectations of Shareholder Base Impact Corporate Decision-Making 14 Demographic Information What is the annual budget for Investor Relations in your company (excluding annual report costs and listing fees but including staff salaries and benefits as well as allocated overhead)? $818,423 mean $550,000 median How many people work in Investor Relations in your company? 2 mean 2 median How frequently do you use outside Investor Relation consultants? Percent 23 On an ongoing basis 39 Occasionally 38 Never What is the revenue for your company? Percent 15 <$500 million 19 $500 million to $1 billion 39 $1 billion to $5 billion 12 $5 billion to $10 billion 9 $10 billion to $20 billion 7 >$20 billion What is the industrial sector for your company? Percent 2 Business Services 2 Chemicals 2 Commercial Banking 1 Commodities 2 Communications 7 Computer Services 9 Electronics 7 Energy 10 Financial Services (other than commercial banking) 4 Food and Tobacco 7 Industrial and Transportation Equipment 2 Insurance 2 Lumber and Paper 12 Other Manufacturing 8 Other Services 5 Retail Trade
  17. 17. 2014 Study on How Investment Horizon and Expectations of Shareholder Base Impact Corporate Decision-Making 15 What is the industrial sector for your company? (continued) 0 Transportation 3 Utilities 1 Wholesale Trade 13 Other What is your gender? Percent 61 Male 39 Female What is your age? Percent 3 <30 23 31 to 40 37 41 to 50 27 51 to 60 9 61 to 70 0 >70 How long have you been employed in investor relations? Percent 7 Less than one year 10 1 – 2 years 8 3 – 4 years 11 5 – 6 years 12 7 – 10 years 21 11 – 15 years 19 16 – 20 years 11 20 – 30 years 1 31+ years What is your title? Percent 39 Vice President 12 Senior Vice President 1 Executive Vice President 31 Director 9 Manager 7 Other
  18. 18. 2014 Study on How Investment Horizon and Expectations of Shareholder Base Impact Corporate Decision-Making 16 Methodology Results are based on the survey of 138 investor relations professionals conducted between February and March 2014.
  19. 19. 2014 Study on How Investment Horizon and Expectations of Shareholder Base Impact Corporate Decision-Making 17 About the Authors Anne Beyer Anne Beyer is an Associate Professor of Accounting at the Stanford Graduate School of Business and former Michelle R. Clayman Faculty Scholar. Anne’s research interest is in the area of financial accounting with a focus on corporate disclosure, capital market prices, and corporate governance. Her recent work has examined the properties of analyst and management earnings forecasts as well as investors’ reaction to different kinds of corporate disclosures. Email: abeyer@stanford.edu David F. Larcker David F. Larcker is James Irvin Miller Professor of Accounting at the Graduate School of Business of Stanford University; director of the Corporate Governance Research Initiative; and senior faculty at the Arthur and Toni Rembe Rock Center for Corporate Governance. His research focuses on executive compensation and corporate governance. Professor Larcker presently serves on the Board of Trustees for Wells Fargo Advantage Funds. He is co-author of the books A Real Look at Real World Corporate Governance and Corporate Governance Matters. Email: dlarcker@stanford.edu Brian Tayan Brian Tayan is a member of the Corporate Governance Research Initiative at the Stanford Graduate School of Business. He has written broadly on the subject of corporate governance, including the boards of directors, succession planning, compensation, financial accounting, and shareholder relations. He is co-author with David Larcker of the books A Real Look at Real World Corporate Governance and Corporate Governance Matters. Email: btayan@stanford.edu Acknowledgements The authors would like to thank Matt D. Brusch, Ariel A. Finno, and Michelle E. Gutman for assistance in the preparation of this study.
  20. 20. 2014 Study on How Investment Horizon and Expectations of Shareholder Base Impact Corporate Decision-Making 18 About NIRI and the Rock Center About the National Investor Relations Institute Founded in 1969, the National Investor Relations Institute (NIRI) is the professional association of corporate officers and investor relations consultants responsible for communication among corporate management, shareholders, securities analysts and other financial community constituents. The largest professional investor relations association in the world, NIRI’s more than 3,300 members represent over 1,600 publicly held companies and $9 trillion in stock market capitalization. www.niri.org About The Rock Center for Corporate Governance The Arthur and Toni Rembe Rock Center for Corporate Governance is a joint initiative of Stanford Law School and the Graduate School of Business at Stanford University. The Center was created to advance the understanding and practice of corporate governance in a cross-disciplinary environment where leading academics, business leaders, policy makers, practitioners and regulators can meet and work together. www.rockcenter.law.stanford.edu Contact Information For more information on this report, please contact: Katie Pandes Assistant Communications Director Stanford Graduate School of Business Knight Management Center Stanford University 655 Knight Way Stanford, CA 94305-7298 Phone: 650.724.9152 Email: kpandes@stanford.edu Ariel A. Finno Director-Research National Investor Relations Institute 225 Reinekers Lane Alexandria, VA 22314 Phone: 703.562.7678 Email: afinno@niri.org © National Investor Relations Institute and Stanford University | 2014 Study on How Investment Horizon and Expectations of Shareholder Base Impact Corporate Decision-Making

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