Investor relations professionals continue to demonstrate their strategic value to Canadian issuer management and boards
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TORONTO — The role of investor relations is increasingly recognized for its strategic value as more IROs contribute to the company’s strategic plan and execute the IR elements of that plan. According to new reports from the Canadian Investor Relations Institute (CIRI) and Global Governance Advisors (GGA), more than half of IROs (Investor Relations Officers) contribute to the company’s strategic plan and nearly three quarters are executing the IR elements of the company’s strategy. In addition, more than three-quarters of IROs advise executives and boards on IR issues and more than a quarter develop the company’s ESG/sustainability strategy. With these expanded responsibilities comes improved compensation, with more than half (59%) of IROs earning at least $225,000 in total cash compensation, with 28% earning more than $300,000.
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“Over the past few years, the investor relations profession has been impacted by changes in the Canadian financial markets, economy and environment, some of which have been driven by the pandemic. This has forced IROs to evolve their practices and take on additional, more strategic responsibilities,” commented Yvette Lokker, President and CEO of CIRI. “These factors have contributed to IROs being recognized by boards and executives for the strategic value and insights they provide, which has raised the stature of the role, resulting in higher compensation. high.”
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“The average total cash compensation of IR professionals spending more than half of their time on IR activities increased to $220,470, a 5% increase from $210,800 in the last survey,” commented Peter Landers, Senior Partner at Global Governance Advisors. “We saw a significant increase in the percentage of IROs earning $200,000 or more in total cash compensation. Additionally, most IROs (79%) received long-term incentive awards this year, up from 59% in the last survey. This indicates the relative seniority of participants in this year’s survey and that companies want to align their compensation with longer-term performance given the critical role they play beyond a year.
Main results of the survey:
- Investor relations is a valued business function
- Recognition as a distinct business function: Three quarters (74%) of IROs work for companies with separate IR departments, in line with 2019.
- Closer to C-suite: More and more IROs are working more closely with key business decision makers, with 88% reporting to senior executives, up from 79% in 2019: 34% reporting to the CEO and 54% reporting to the CFO.
- More financial resources: The average RI budget is $830,150 (excluding allocated overhead but including compensation), up 6% from 2019.
- IROs increase their strategic influence by providing insight to management and boards
- Deliver strategic value: Recognizing that IR is considered a strategic role, more than half (57%) of IROs contribute to the company’s strategic plan, up from 53% in 2019, and three-quarters (73%) execute the IR elements of the company’s strategy, in line with 2019.
- Expand ESG responsibilities: IROs have taken on increased responsibilities related to ESG/sustainability: 55% engage with investors on ESG/sustainability; 50% write or edit the company’s ESG/sustainability report; and 28% develop the company’s ESG/sustainability strategy. These are new additions to the 2022 survey, therefore comparisons are not available.
- Stronger engagement with the Board: The strategic value provided by IROs is further underpinned by their increased engagement with the board. Most IROs (82%) prepare reports for the Board while more than half (53%) present them to the Board. More than three-quarters (77%) of IROs advise executives and boards on IR issues. IROs also facilitate board-to-shareholder engagement, with one-third (36%) of IROs managing the engagement process between institutional shareholders and the board. These are largely in line with 2019.
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- IR compensation is up
- With expanded responsibility comes enhanced compensation: Total cash compensation for all IROs averaged $223,000, up from $202,000 in 2019. More than half (59%) earned at least $225,000, up significantly from 34% in 2019, including 28% who earned more than $300,000, up from 22% in 2019.
- Closing the gender gap… marginally: While the pay gap between men and women has narrowed, a considerable disparity remains. On average, male IROs received total cash compensation of $246,000 while female IROs earned $206,000. This $40,000 or 19% pay gap is down $5,000 or 11% from 2019.
The results of the survey have been published in two separate reports, accessible here.
About the survey
CIRI and GGA conducted the ninth Investor Relations Compensation and Responsibilities Survey during the first and second quarters of 2022. One hundred and ninety-two investor relations professionals participated.
The research objectives of this survey were to:
- Provide members, non-members and industry professionals with RI budget information for reference analysis; and
- Track key trends in the roles, responsibilities, resources and compensation of IR professionals in Canada.
The CIRI is a non-profit professional association of executives responsible for communication between public companies, investors and the financial community. The CIRI contributes to the transparency and integrity of the Canadian financial markets by advancing the practice of investor relations, the professional competence of its members and the stature of the profession. With nearly 500 members and four chapters across the country, CIRI is the voice of IR in Canada. For more information, please visit CIRI.org.
Global Governance Advisors (GGA) is a human capital advisory firm that provides executive compensation and governance advisory services to boards of directors and senior management. The value we deliver to our clients stems from our unique combination of independence, experience, rigor and integrity. This means strategic, objective and conflict-free advice. Our wide range of advisory services are backed by a foundation of over a decade of analysis of compensation, design, performance metrics and compensation levels. We bring a strategic, innovative and practical approach to maximizing executive talent. The result is improved shareholder returns, solutions that align with shareholder advisory firm guidelines, and pay-for-performance that truly rewards the generation of exceptional returns. For more information about GGA, please visit www.ggainc.com
President and CEO
Canadian Investor Relations Institute
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Global Governance Advisors