<SPECIAL FEATURE>
January 26, 1999
Investors' Rights
Ratings 4.5 - 4
In a wholly unscientific manner, Yi-Hsin Chang and Louis Corrigan each picked 10 well-known companies from a wide range of industries. Efforts were made to contact every company's investor relations (IR) department to ask about policies regarding conference calls, website offerings, and earnings press releases. Conference calls were rated on two criteria -- their availability to individual shareowners and whether a live broadcast was available on the Internet. Earnings announcements were rated on clarity, detail, and depth. The companies' IR websites were navigated to determine usefulness to shareowners. Each company was rated on a scale of 1 to 10, 10 being the highest rating possible.
Rating: 4.5
Rating: 4
Rating: 4
Rating: 4
Next -- Company Ratings 3.5 - 1
Home Depot <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: HD)") else Response.Write("(NYSE: HD)") end if %>
2455 Paces Ferry Road N.W.
Atlanta, GA 30339
(770) 433-8211
http://www.HomeDepot.com
Foolish Efforts: Home Depot recently rolled out a Direct Stock Purchase Plan that allows investors to conduct transactions online, buying and selling even small amounts of Home Depot's stock. They can use the same service to set up automatic monthly investments or dividend reinvestments. Investors can also sign-up for an automatic e-mail press release service. Annual reports from the last three years can be viewed online (but not downloaded). Conference call replays are available for three days (a toll call). And though do-it-yourself is Home Depot's business, it's great to see the company beef up that commerce-oriented side of its website.
Areas for Improvement: Conference calls begin at 9 a.m. with the Q&A extending into market hours. Problem is, individuals aren't allowed on the live call. Plus, members of the media get dumped after the prepared statements and before the Q&A. The company should offer at least live Web access, but preferably that and transcripts and archives of one or both. Also, the stock purchase link repeatedly failed to work for us -- probably a start-up glitch. While the earnings release page includes links going back to the first quarter of 1995, the most recent report isn't archived here yet. Plus, the latest link includes only the financial tables while the others include just the press release copy and not the tables. Investors would like both. They'd also like a press release archive dating back at least two years rather than just seven months. There's also a contact number buried in the Stock Purchase area, but no e-mail or contact name. Links to outside news articles about this home improvement juggernaut would also be welcome.
One Coca-Cola Plaza
Atlanta, GA 30313
(404) 676-2121
http://www.thecoca-colacompany.com/investors/index.html
Rating: 4
Foolish Efforts: Coke's IR site gives a fairly comprehensive summary of the company's history and background, business model, operations, and corporate objectives. It also provides last year's annual report and 10-K, quarterly earnings releases and 10-Q's dating back to Q1 1998, as well as transcripts of speeches by CEO Doug Ivester and former CEO Roberto Goizueta.
Areas for Improvement: Coke excludes individual investors from its crucial quarterly volume updates, where senior management briefs selected analysts and answers questions. (The company says that no individual shareholders have asked to attend the briefings -- though we know of at least one Fool who has -- and adds that it prefers a "hands on" and "more personal approach" to answering questions from shareholders.) For the past two quarters, Coke has called impromptu meetings with analysts to warn of disappointing earnings, leaving individual shareholders to the mercy of the trickle-down effect. The company should broadcast these important volume updates and earnings warnings live via the Internet. It should also offer an e-mail notification service for major events and announcements.
Gap Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GPS)") else Response.Write("(NYSE: GPS)") end if %>
One Harrison Street
San Francisco, CA 94105
(650) 952-4400
http://www.gap.com
Foolish Efforts: Although Gap.com is clearly an online store first and foremost, it does make available its annual reports for the last two years with historical financials going back 10 years, a useful calendar of dates on which it plans to report quarterly earnings and monthly sales figures, and an archive of quarterly earnings (dating back to Q3 1997) and monthly sales reports (going back to November 1997). The company also lists a history of its stock splits since going public in 1976. You can also view the company's latest products and advertising efforts.
Areas for Improvement: Gap should open its conference calls to individual investors and not limit them to just the analysts and institutional investors it considers "the investment community." (The company says it prefers to address the concerns of individual investors on a one-on-one basis.) Ideally, this would mean allowing individual investors to phone in on the conference calls, or broadcasting and archiving such calls on the Internet.
One Bowerman Drive
Beaverton, OR 97005
(503) 671-6453
http://www.nikebiz.com
Foolish Efforts: The company's website includes the 1998 annual report (download or view online); an archive of earnings releases (complete with full balance sheets, geographic and divisional breakdowns, and helpful percent change calculations) back through FY96; SEC links; historical financials downloadable for Excel; and a very cool audio file and transcript of the annual shareowners' meeting. Jumping to the media area, there's an interesting FAQ about Nike's shoes; corporate bios; a very large section on Nike's labor practices, with audio/video files and direct email; and a fact sheet about the company's economic impact on the U.S.
Areas for Improvement: The investors' FAQ is pretty useless, with no clear contact info. Also, the general press release archive should go back at least two years, as should the annual report archive. The company should also use its website for live conference calls and make its site browser-friendly for America Online users. We would like to say more about Nike's conference calls and Web features. But after Nike's IR office asked us to email our survey, we waited and waited for a response. When we checked back, we were told they had received the survey, looked at it, and recycled it. And they were too busy to answer our questions. So much for the new kissy-face Nike.
20555 SH 249
Houston, TX 77070
(281) 370-0670
http://www.compaq.com
Foolish Efforts: Compaq's dynamic website is full of useful information, including a live webcast (plus transcript) of CEO Eckhard Pfeiffer's speech at the fall Comdex show. There's an archive of press releases through 1994; a list of "Web advisories," online news highlights, through May1997; financial news releases (complete with balance sheets) through 1994; annual reports through 1994, with the 1997 edition for online viewing or downloading (and in an assortment of languages); SEC links; and a corporate governance area including bios of board members. You can also sign up for the company's investor plan/DRIP, and the company will buy shares for you for just a $10 fee. There's also a good online form for ordering financial information.
Areas for Improvement: Compaq's "Comments" feedback page isn't IR specific; the website's calendar of events is stale; we couldn't get the historical financials section to work. More important, Compaq declined to participate in our survey, which is too bad because we wanted to know why the company's executives have at times disclosed material nonpublic information to select groups of Wall Street professionals. Compaq has reportedly even shut out the media from its Q&A breakout sessions at private investment conferences where the media was generally allowed to monitor such sessions. So individual investors have at times been forced to get news third-hand. That just won't cut it.
A Compaq IR representative even flatly refused to tell us what the company's policy is regarding conference calls; somehow that constituted participating in a survey rather than answering a basic shareowner question! Apparently, though, Compaq's calls take place at 8:30 a.m. ET, just in time for the chosen few allowed on the live call to get a jump on other investors once the market opens.
Addendum: In announcing plans to take Alta Vista public, Compaq actually did allow individual investors to listen in on the live call. It even disseminated the access number in a press release, along with info about the replay. This may be a sign of more good things to come, or it may be merely a one-time deal designed to get individual investors interested in the stock offering. We'll have to wait and see.