Like the Marines, investor relations (IR) professionals are the few and the proud. Increasingly, though, companies are trying to add to their ranks in order to keep up with an increasingly complex regulatory environment.
Entering the field can be tricky since there are no degrees or certifications that signify that someone is qualified to enter the field. The departments are also small, which means there are few jobs to be had, though hiring is on the rise as is the pay for the positions, according to a recent survey.
How to break into IR
Instead, people enter IR through other ways. Some promising finance executives are sent to the IR on a rotational basis, though they are usually not put in charge because companies want stability in that role. Others are picked from investor relations agencies or are recruited from other companies. Having the CFA designation and/or an MBA degree also helps as does a background on Wall Street as an analyst. At one time, being a skilled writer alone could get someone a foot in the door in IR, but that’s no longer the case.
“There are a very small number of companies that have more than three or four people in an IR department,” said Smooch Reynolds, a partner with Caldwell Partners International in Los Angeles. Reynolds tells eFinancialCareers there has been an increase in job postings over the past six months. “In IR, every individual counts for twice as much,” said Reynolds.
Navigating regulatory minefields
Demand for IR professionals is strong at new companies navigating the regulatory minefields of going public that have tripped up Groupon, among others, to more established firms. That job has become more complicated with the advent of social media and the growth in the numbers of CEOs who communicate via Twitter, Facebook and blogs.
For those who wind up in IR, it can be a lucrative field that may be less sensitive to hiccups in the economy since publicly traded companies need to be sure that proper disclosure procedures are followed regardless of how the business is performing.
The SEC has at times fined both executives and their employers for violating regulations such as Regulation FD. Regulators are reportedly taking an even tougher line on selective disclosure.
Pay for IR officers is up
A recent survey by the National Investor Relations Institute (NIRI) and Korn Ferry found that base salaries for investment relations officers were $175,000 and $200,000, up $50,000 from 2010 and 2008. Cash bonuses are on the rise as well. More than 20 percent of Fortune 500 IROs got payouts of between $50,000 and $100,000, the survey said, adding that the figure has climbed for four straight years.
Skills needed in IR
To be a success in IR, a candidate needs to have an outgoing personality and to be able to effectively communicate the company’s strategy to an often-skeptical audience of Wall Street analysts and fund managers who don’t suffer fools. Moreover, IR people need to foster an effective relationship with investors while at the same time making sure their employers don’t run afoul of disclosure laws.
"You have got to be a spreadsheet jockey," said NIRI President and CEO Jeff Morgan through a spokesman. "You have to understand everything the CEO and CFO understands.”