Investor Relations

Intro To An IRO: Mike Saviage

Mike Saviage is the Vice President of Investor Relations at Adobe based in San Jose, California. Mike has been with Adobe for over 20 years, joining the company through an acquisition in the mid-1990s. Before taking on the investor relations role in 1999, he managed consulting services and sales teams for the Acrobat business.

1. What are your top priorities and biggest challenges?

I think the IR role is to essentially market Adobe to investors and analysts. Investor Relations is about identifying everything that analysts or investors need to understand in order to make informed decisions about whether the equity is worthy of their investment or their support.

It comes down to, for me, simple Business 101-type things: What are your products? Who are the customers? What are the problems they're solving? Who are the competitors? What is the size of the opportunity? From that, what are the kinds of growth rates you can drive? What is the company? What kind of company is it? What's the management team? Who's running the company, who's driving the business, who are the stewards of the company?

Investors not only invest in an opportunity and in a business, but also in the management team running the business. I believe that what we do well is to make sure that anybody who looks at our story understands all of the different inputs that they need to decide whether we're worthy of an investment or support from a rating standpoint, if you're on the sales side.

There are many challenges, so you have to make sure that you rise above the fray in terms of being known and understood. You can do a lot of work to help people find your story, but at the end of the day, they're also responsible for finding it. The market is very efficient that way, which is why you have to make sure that your message is getting out there. That ranges from how you work with corporate communications at the company to make sure that all the proper channels are being used and that the story is getting promoted consistently across all the ways that people receive information. Make sure there's an accurate representation of your story and your products to ensure there's a consistent, factual representation of what's happening around your story out in the market.

2. How have you seen the role and expectations of the IRO evolve in the past few years?

Companies do this differently, but I think what we've done very well is make sure that the IR role is a well-informed part of the management team. When people call and want to learn the company’s story or understand opportunities in the business, and goals and targets, they can feel comfortable speaking with the IRO, the IR professional, the CFO, or other members of the management team.

Investors or analysts wish to speak with someone from the company. If they realize who they speak with doesn't have the full picture or is limited in their ability to speak about the company, then the investor or analyst is not getting the full picture and they're going to feel frustrated by not speaking with somebody from management. We learned that early on at Adobe when investors or analysts would call in to different people at the company like the CFO, the IR person, and the President to triangulate around the same question to see if the answer from each was the same. As a result, we've been able to do is set up a strong communication role in the IR function so that the IR team functions as company experts with the investment community.

3. How can the IRO best engage the investment community?

There are two schools of thought there. I think if you have a good story, people will find you and that's through a lot of hard work by the employees and the management team. Additionally, while there are lots of conferences, we don't go to all of them; however, from time to time we do want to get out there and support the story and support the sell side by participating in their conferences. I do think the biggest value that we can provide is often going on road shows. Going door to door to meet with portfolio managers and with investment analysts is of great value to them and our management team and myself.

When we look at what's the best ROI of our time from an outbound communication perspective, it is getting on the road and meeting with people. We try to do that frequently. Maybe less today than in the past when we weren't as well known, because now a lot of people find us and come to us. In 2017, we've made it more of a priority to get on the road and to be in front of the people that make the investment decisions – such as the buy side and portfolio managers. To that end, this whole week I've been working on plans on how we do that more this year.

4. How have you seen the importance of the IRO develop during your tenure at your company?

I think that in the early days, it was really trying to get your arms around what is a very broad and complex story, and trying to decipher that down to points that are understandable. Also, I think there are many analysts and investors out there that have very large coverage spaces. You might have an analyst that just covers software, and that's great, but sometimes you meet with somebody who covers North America, and so you have to stick to a high level and find themes and trends that are attractive to them as an investment thesis, beyond just the financials and the growth projections.

Today, it's things like the cloud and big data and mobile and the explosion of digital content and the digital experiences that every business, every enterprise, every government agency, every educational institution in the world is grappling with. So how, for example, do you distill all the complexities of what we do as a business down to something that you could explain to somebody very simply and quickly in an elevator and they could get it? That’s the fun part of the job to correlate our complex products or complex use cases and distill them down to something that everybody can understand and therefore identify with.

5. What resources do you rely on to stay up to date on the capital markets?

That's the beauty of the web, of the internet, of resources like NASDAQ, where there's a lot of inbound information. There are a lot of tools that we subscribe to or that we use. There's a lot of news that we can read in this digital explosion of how we receive and consume information. You have all the information at your fingertips, and then it's about how you parse it down to what you need, which is very helpful in staying on top of what we do.

Also, I think you have to use your whole team because there are different topics that are very relevant to different parts of the organization, whether it's Legal, Tax, Accounting or Treasury. We have our inputs from those functions that help us deal with what's around the corner. It might be changes to the tax law, it might be changes to a variety of different things that we always have to be on top of, and the availability of that information through services and vendors like NASDAQ is very helpful for us to do our job.

6. What is one important initiative that you’ve championed or experience that you’ve had as an IRO?

I think Adobe has undergone, in my time, several peaks and valleys in terms of its business and its strategy. Some of that may have been economically driven and some was just growing pains over a couple of decades. I think what the company's proud of is that we've been able to reinvent ourselves and now be at the heart of where our customers want to understand and invest in. Being able to not only execute that on the business side but to be very transparent in explaining what that is to investors and analysts so that Wall Street gets it.

What we accomplished at Adobe over the last four or five years, others had tried and attempted before us and had either failed miserably or had a rocky road in trying to shift the business model the way we did. In doing that, we feel proud about where we sit today. We took what was viewed as an old, stodgy software company that sold boxes of software to corporate resellers and channel distribution to a business that's online and critical to our customers. We're helping them deal with things like digital disruption and how they're going to reinvent themselves the way that we did, through the use of our software. I think it's really exciting to look back over four or five years and feel proud of what we were able to accomplish as a company.

7. What advice do you have for the next generation of IRO?

It's not something that I would say just today but I would have said five or ten years ago – it’s what I did when I started in investor relations. I had no finance background and no accounting or financial experience, but what I had was a lot of experience around our products and the challenges our customers faced and why they were interested in the use of our products to solve problems that they had. I would look forward and say to anybody that wants to be in the investor relations role, it's not necessarily a Finance job.

It's a job where you have to understand your company's business, the products, the opportunity, and the competitors. Financial analysts and sell-side and buy-side professionals can get all the financial information they need from your financial statements or from online resources. What they really need to understand is: How is it unique or different from anybody else in this space? What's the size of the opportunity? How are you going to grow? What are the impediments to growth? It's more around the idea that you need experience in business and in products and strategy and less around being able to help somebody read the balance sheet or read the income statement. Where you can add value in teaming with your management team is to be the communicator of all things beyond the financial aspects of the business.


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