IR Monitor – 26 March 2025

In this week’s newsletter:

• Resist the ‘myths’ of New York, London Stock Exchange warns UK firms. In detailed analysis, seen by The Sunday Times, the LSE has set out the risks companies face when opting for a US listing instead of the UK, including exposure to litigation and higher fees
• It’s AGM time, season of free sandwiches and protest fireworks. The Guardian suggests that corporate backsliding on climate and diversity policies means this year’s annual meetings may be tough for some of the UK’s biggest companies
• Four things we learned at IR Magazine’s AI & Technology Forum
• Shares Magazine: why companies who split their shares are often long-term winners 
• CEOs face more accountability when a board member has military experience: a new study, flagged by The Wall Street Journal, finds that Chief Executives are more likely to be fired for company underperformance if a board director has served in the military 
• And finally … Elon Musk’s X is a lesson in ebitda and ebit-don’ts, warns the FT

Rose Zu: NIRI’s Rising Leaders Under 40

You will all know our colleague Rose Zu from our “IR Monitor Live” videos. So, it came as no surprise to us when NIRI: The Association for Investor Relations last week announced that Rose is one of its 2025 Class of Rising Leaders Under 40.

The NIRI Rising Leaders Under 40 Program recognises talented young individuals in the investor relations community who have made noticeable contributions to their companies and the overall IR profession.

Rose helps clients across geographies and sectors tell their unique stories to the investment community, and works across communications disciplines to ensure these stories are seen and heard. 

Contact us for more about FTI’s IR services >>

This week’s news

Resist the ‘myths’ of New York, London Stock Exchange warns

With 88 listed companies leaving and only 17 joining in 2024 alone, the London Stock Exchange has faced an exodus of companies from London’s stock market. The Sunday Times reports on how these concerns, alongside the need to attract major companies looking to go public, have prompted the LSE to analyse the risks that companies face should they defect to New York from London. Titled ‘Mythbusting – UK vs US’, the document finds that when it comes to adviser fees, accountability, and the range of investors available, the London stock market proves to be a more favourable environment for companies. With 9 of the 20 companies that have raised $100m through listings since 2014 actually de-listing after moving to New York, the report also finds that moving to New York from London does not guarantee listing success. The findings present a potential business case for resisting broader industry pressure to de-list in London.

It’s AGM time, season of free sandwiches and protest fireworks

As many UK-listed companies prepare to hold their Annual General Meetings between April and May, this year’s season is set to be tougher than usual, writes The Guardian. Investors and activists are expected to take companies to task over the wave of recent rollbacks on initiatives related to ESG and DEI goals undertaken by some major UK corporations. Companies with ties to the US may also face particular challenges over their compliance with President Trump’s anti-DEI and pro-fossil fuel executive orders. Executive-level pay will be a hot topic for scrutiny; companies will need to justify massive boosts to CEO salaries expected over the coming year, especially if share prices have not performed well in comparison. It seems that, this AGM season, companies may have much to answer for. 

Four things we learned at IR Magazine’s AI & Technology Forum

IR Magazine’s AI & Technology Forum in London sought to address IROs’ uncertainty about how to best leverage AI in investor relations programmes. Your IR Monitor correspondents offer the key takeaways: Firstly, it’s never too late to embrace AI technologies, especially as capabilities are constantly developing. From Q&A prep to analyst report summaries and competitive intelligence, IROs have much to gain from adopting AI. Secondly, IROs need to embrace company expertise and find their own ‘Steve Jobs’, identifying internal teams or individuals who possess the existing technical knowledge /tools to help deploy AI strategically. Thirdly, using AI to analyse competitive intelligence and assess how peers are operating in the market can better inform a company’s decision making by learning from competitor mistakes. And finally, concerns around data privacy when using AI continue to hinder IROs from adopting the technology. In light of this, the forum’s experts panel recommended that IROs experiment with AI using low-risk info to learn about different models and avoid potential security issues.  

Companies who split their shares are often long-term winners – Shares

A commonly held belief is that, over the long-term, share prices track profits, indicating that a high share price is a reflection of strong growth and financial success. Shares Magazine reports on research from Bank of America that has revealed that companies which undergo share price splits see their share price increase by 25% in the first year, outperforming the 12% average which is delivered by the market. The research explains that share splits democratise share ownership by making shares more affordable to the average investor. Apple, for example, whose shares are widely owned by retail investors, has split its share price five times since its initial listing – this has meant that the share price today sits at $250, rather than $50,000. Share splits may also create higher liquidity, which is important because effective price discovery usually functions better when there is a higher volume of willing buyers and sellers. Finally, share splits indicate positive prospects to shareholders, which in turn may influence analysts to upgrade their recommendations, providing further momentum for the shares.

CEOs face more accountability when a board has military experience – WSJ

According to research flagged by The Wall Street Journal, which analysed over 850 publicly listed companies in the US between 2010 and 2020, CEOs of underperforming companies have a higher chance of being fired if a board member has a military background. Across the sample, around 2.1% of CEOs were fired when their company was underperforming on the return on assets metric against its peer group – but this rose to 2.9% when the company had a military director on the board. Interviews with such directors showed that they frequently placed a higher premium on personal accountability, which in turn translated into definitive action such as conducting formal CEO evaluations to determine the link between company performance and executive shortfalls. Interestingly, CEOs who also serve as chairperson of the board do not face the same likelihood of dismissal for underperformance, even when a director does have a military background.

And finally… Elon Musk’s X is a lesson in editda and ebit-don’ts – Financial Times

The FT looks at how Elon Musk’s X is now valued at $44 billion, the same amount that he paid for it back in 2022, despite declining tech stock values and previous investor write-downs.  It claims to be generating $1.2 billion in EBITDA, close to its 2021 levels despite declining revenue. One possible explanation is that Musk is improving X’s efficiency. However, given that these numbers are heavily adjusted, there are concerns over accuracy. EBITDA, which is frequently used to smooth over financials, can be manipulated by excluding various expenses, which makes performance appear better than it actually is Given that EBITDA is not a standard number, it can be tailored to suit the situation, and in X’s case, it is unclear what exactly those adjustments are.