Heard on the street

Financial markets move with stunning alacrity these days, and when they do, savvy investors insist that corporations provide swift, informed insights often 24/7 and via the latest technologies. That’s posing new challenges for investor relations officers (IROs), key C-suite officers who are better positioned and compensated for their increasingly demanding roles, Korn Ferry research finds.

To provide a clearer picture of requirements and rewards among top industry leaders, the firm partners biannually with the National Investor Relations Institute (NIRI) to survey elite Fortune 500 leaders to track trends in the profession’s compensation, benefits, and related practice. This year’s responses came from more than 200 IR professionals in Fortune 500 companies.

“Whether their background is rooted in finance, investor relations, or as an analyst, the most important role the IRO can serve today is to counsel and assist management in refining, or shifting the corporate and investment narrative, in a way that has credibility with the Street, and that requires a broader and more diverse set of skills,” Richard S. Marshall, global managing director, Corporate Affairs, and IR at Korn Ferry, said of the firm’s most recent findings with NIRI.

The firm’s study found increasing financial acumen, as reflected in advanced training and degrees, among Fortune 500 IROs: 55.7% have CPAs, 48.1% have MBAs, and 25.7% have or are pursuing a CFA. These capacities are key as investor relations (IR) strategy and related tactics are more complex and nuanced now and often must be coordinated, delivered, and sequenced under tight deadlines and in challenging circumstances, the firm found.

Figure 2. CPA designation.
Figure 3. CFA designation.

Although Fortune 500 IROs did not focus on any singular challenges in their roles, they offered general concerns about heavy demands they confront, especially in balancing their many duties and obligations as well as in dealing with the added stresses of responding to increasing shareholder activism.

Their professional lives also have been complicated, they said, by continuing changes and volatility in the equity markets, intense regulatory scrutiny, the need for increasing transparency in finance-related communications, and the many and varied ways that rapidly advancing technologies allow investors and other stakeholders to access financial information about organizations 24/7.

The latest survey data shows continued increases in average base salaries of corporate IROs. Average base salaries rose for the third consecutive survey year to $202,000 from $188,000 in 2014, an increase of more than 7%. The median base salary of all respondents was $200,000, an increase of more than 8% from $185,000 in 2014. The median base salary of Fortune 500 IROs was $214,000.

The 2016 survey data also reflects sustained improvement in bonuses received. For Fortune 500 IROs, the average cash bonus received was $90,000; the last time the survey was conducted, that sum was $86,919.

“In this increasingly disruptive and activist environment, where companies need to redefine themselves to the marketplace and investment community, we see the IRO role continuing to grow in importance to the C-suite,” Marshall said.

Authors

  • Richard Marshall

    Global Managing Director, Corporate Affairs

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  • Peter McDermott

    Principal, Corporate Affairs

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  • Bryan Proctor

    Senior Client Partner, Chicago Office

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