NIRI White Paper: 2014 Compensation and the IRO

© 2014 National Investor Relations Institute

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Compensation and the Investor Relations Profession

2014 Study Results

By Ariel Finno, Director-Research ([email protected])

A NIRI White Paper

NIRI White Paper: Compensation and the Investor Relations Profession-2014


National Investor Relations Institute (NIRI) - Korn Ferry International Corporate IR Profession and Compensation Study Results Presented here are key findings from the 2014 NIRI-Korn Ferry International Corporate IR Compensation and Profession Study research project. Data from our previous biennial compensation efforts can be found on the NIRI website.

2014 Key Findings

Base salaries of corporate investor relations officers (IRO) rose for the second

consecutive survey year, to an average of $187,691. The median base salary was

$184,500 (Standard Deviation (SD) =$71,984). After adjusting for inflation, this is a two

percent increase from 2012 average base salary data ($179,404).

Average cash bonus in 2013 was $69,061 (Median=$50,000, SD=$62,353), and

$65,185 (Median=$45,000, SD=$63,198) in 2012.

The average salary plus bonus (or, total annual cash compensation) increased to

$256,760, up from $251,094 in 2012.

The median base salary for men was $195,000, and was $159,010 for women (23%

difference). Reviewing NIRI compensation data, over the last 19 years there has been a

67% decrease in the pay gap between men and women IROs.

The overall base salary average for all IROs located outside of the U.S. was $170,916

(Median=$157,500, SD=$83,309).

For the first time since 2008, investor relations (IR) budgets saw slight shifts downward,

as a greater percentage of respondents were in the lower budget ranges across all

market cap sizes1 for 2014 than in either 2012 or 2010.

The average number of IR employees (excluding administrative and ‘other’ staff) was

2.24 (SD=1.564). When including administrative and ‘other’ employees, the average

number increases slightly to 2.82 (SD=2.012).

The MBA remains the most common advanced educational attainment for those in the

IR field. The number of IROs that report holding the Chartered Financial Accountant

(CFA) credential has increased 175% since 2007.

The most popular additional benefits are 401(k) plans (86%), health insurance (83%),

and life insurance (65%), with other benefits significantly trailing.

1 Survey Definitions: Micro-cap: <$250 million in market-capitalization, Small-cap: $250 million-<$2 billion, Mid-cap: $2 billion-<$10

billion, Large-cap: $10 billion-<$25 billion, Mega-cap: $25 billion+.


Base Salary Compensation Corporate IR base salaries rose for the second consecutive survey year, to an average (mean or M) of $187,691 (Median of $184,500). Between 2012 and 2014 average base salary increased approximately five percent (from a 2012 average of $179,404). The proportion of respondents in higher base salary ranges continues to climb. The current year’s results (2014) were bi-modal, with 22% of respondents between the $150,000 to $185,000 range, and another 22% between the $240,000 and above range. The maximum reported base salary range for the 2014 survey rose back up to $475,000-$500,000 (last seen in 2010), an increase over 2012 compensation survey results. Average Base Salaries of Corporate Investor Relations Officers by Year

Cash Bonus Received The vast majority of respondents (92%) received a cash bonus (excluding long-term incentive plan pay-outs) in both 2013 and 2012. Cash bonus averages in 2013 were $69,061 (SD=$62,353), and $65,185 (SD=$63,198) in 2012. For 2013, 50% of IROs received a cash bonus of $50,000 or above. In 2012, approximately 50% received a cash bonus of $40,000 or above.


Cash Bonus Received by Corporate IROs by Year

Total annual cash compensation combines current base salary average with the most recent cash bonus (2013) average. Thus, the average salary plus bonus received for IROs increased to $256,760 in 2014, from $251,094 in 2012.


Fortune 500 IROs IROs working for a Fortune 500 company report making 11% more in base salary than their non-Fortune 500 counterparts (median of $195,000 compared with $175,500). Median Base Salary of Fortune 500 IROs


IR Budgets and IR Staff Total Investor Relations Budget by Market Cap-2014

For the first time since 2008, IR budgets shifted slightly downward, as a greater percentage of respondents’ budgets were in the lower ranges across all market cap sizes for 2014 than in either 2010 or 2012. The mode budget ranges by market cap segment are $100,000 to $499,999 for micro-caps (58% fell in this range) and small-caps (46% fell within this range), and $1,000,000 to $2,499,999 for mid- to mega-caps (43% for mid-caps, 48% for large-caps, and 45% for mega-caps).


Increases of Decreases in Staff Size for 2014

Similar to the 2010 and 2012 survey results, IR staff size remained the same in 2014 for the majority of respondents. Total IR staff size includes all IR job titles, any administrative roles, and other roles not specified. Across all market caps, the average number of IR employees (excluding administrative and ‘other’ staff) was 2.24 (SD=1.564). When factoring in administrative and ‘other’ employees in addition to IR staff, across all market caps the average number of IR employees increases slightly to 2.82 (SD=2.012). Conclusion For the second consecutive survey year, corporate investor relations officers’ base salaries increased 2% after adjusting for inflation from 2012 dollars. Cash bonuses also experienced a slight increase, while equity and benefits received remained constant. As the average number of duties a respondent is responsible for in addition to IR is steadily increasing, as well as the number of different industries an IRO will work in during their career, the number reporting attaining various educational and professional credentials is also increasing. More IROs hail from a variety of professional backgrounds than ever before, particularly from the sell-side. Current IROs continue to see the field of investor relations as either a permanent career or a transitional role for themselves, and this is reflected in the number of years’ experience of the population (the two largest percentages being less than two years and 11 or more years’ experience). Many variables affect both the base salary of IROs, and their equity and benefits compensation packages. To illustrate, in 2014, the median annual salary of an IRO with 7-10 years of work


experience employed at a mid-cap company is $180,000, whereas the annual salary of an IRO with the same amount of experience at a mega-cap company is $224,000. Or, depending on title, geographic location and industry, an IRO can have a median salary range between $55,000 and $400,000. Become a NIRI Member To receive access to the complete NIRI-Korn Korn Ferry International Corporate IR Profession and Compensation Study – 2014 Report, as well as all other research, Standards of Practice, and additional benefits, go to www.niri.org/join to become a NIRI member.

About this Survey

Today’s investor relations executives face increasingly complex professional challenges both internally and externally. The National Investor Relations Institute (NIRI) and Korn Ferry International have partnered on this fourth effort to provide current compensation benchmarking trend data for corporate investor relations professionals (those working within publically traded companies), as well as scope of responsibilities, organizational and reporting structures, and professional profiles/backgrounds of IR professionals. This white paper presents 2014 survey results from corporate investor relations practitioners, and trend results which include data from previous compensation survey efforts. The 2014 NIRI - Korn Ferry International Corporate IR Profession and Compensation Study inquired about 2014 compensation data, and 2013 and 2012 cash bonus data. All NIRI corporate members, as well as a sample of corporate IRO non-members, were invited to participate in this electronic survey through direct e-mail invitations from March 31 to April 30, 2014. A total of 790 individuals completed the survey; a sample of this size has a margin of error of plus or minus 3.3% at a 95% confidence level. This means that if the survey was repeated 100 times with different samples from the population of IROs, 95 out of 100 samples would yield a result within plus or minus 3.3% of each statistic reported in this study. For example, if an answer is offered by 50% of respondents, the results would range between a high of 53% and a low of 47% for 95 out of 100 other samples from the same population.

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 representing over 1,600 publicly held companies and $9 trillion in stock market capitalization.

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NIRI White Paper: 2014 Compensation and the IRO

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