‘I had a reputation for not sugarcoating things’: Former IRO DiRaimo
‘I view you to be one of the most talented professionals I’ve ever had the pleasure and honor to work with,’ said Leonard Comma, Jack in the Box’s CEO, of Carol DiRaimo on the company’s August earnings call.
DiRaimo had just announced her retirement from Jack in the Box, after a career in IR that spanned almost 20 years at both Jack in the Box and Applebees. DiRaimo is one of the most decorated IR professionals in the history of the IR Magazine Awards – US. She won the best investor relations officer (small to mid-cap) award at the IR Magazine Awards – US in 2004, 2005, 2006, 2007, 2011 and 2017, the latter award shared with Julie Dewey from Wright Medical Group. In this Q&A, she reflects on her career and looks to the future.
You formally retired from Jack in the Box in late August. What are your plans now?
What I would really like to do first is vacation! I’ve booked a trip to Australia for 18 days. In IR, you can never book an 18-day trip because you can only really get a week off at the start of the quiet period, so that will be very nice.
After that, I’d like to pursue board opportunities. During my time at Jack in the Box, I reported to the CFO, but I was in every board meeting and had a lot of exposure to the audit and finance committees. I was fortunate that they would ask my opinion, and it felt like I had a seat at the table.
Not only am I female with board exposure, but I also have financial experience and activist experience. I think that, broadly, there’s an opportunity for some IR professionals to make that step up to board level.
You announced your retirement on your last earnings call for Jack in the Box and it was clear from the remarks of your management team and covering analysts that you are very highly thought of. How have you approached building and managing key relationships throughout your career?
Our current CEO [Leonard Comma] was in an operations role when I joined Jack in the Box. I knew the then CEO [Linda Lang] had plans to retire probably within the next five years or so, and I worked with her to figure out an heir apparent. Lenny came to the top quickly, so I tried to give him exposure long before the transition was announced. When we made Linda’s retirement public in 2013, it was a seamless transition.
Lenny is known on the Street for being very transparent. If I’m at a conference, people will come up to me in the ladies’ room and say how great it is that I work with him. He doesn’t want to use buzzword bingo, so he was very easy to work with from that point of view, though I did have to do a lot of work educating him on what the Street wanted.
With Lance [Tucker, Jack in the Box’s CFO since March 2018] it was much easier because he’d been with a public company, though he hadn’t worked with a dedicated IR function. There were lots of things we were doing last year – such as engaging with activists and reviewing strategic issues – that were new to him.
When it comes to Wall Street, I learned that it’s important to have confidence. I came into IR in the early 2000s, following Regulation Fair Disclosure (Reg FD) and the dotcom bubble. When you’re new to IR, analysts can be quite intimidating. What pushed me to learn was to have the confidence to point out when I didn’t agree with them, but also, importantly, not to penalize them when I didn’t agree. These guys aren’t accountants so they don’t understand the nuances of a financial statement, of stock buyback plans and trading periods versus blackout periods. If you can help explain things that apply to your whole industry, you provide a lot of value.
How has IR changed since the early 2000s and how did that prompt you to grow as an IRO?
Short-termism has exacerbated the market. It’s really hard to attract and maintain long-term investors, especially in the retail space. Now you hear a lot of companies talking about the alternative data that is available to investors. If you think about the purpose of Reg FD, it was supposed to put the individual investor on a level playing field with institutions, because all the funds and institutions have access to data that individual investors don’t.
Recently our stock hit a 52-week low before we reported because there was some bad data out there and the hedge funds ran with it. The day we reported, our stock price corrected. But from an IR perspective, there’s not much you can do about alternative data. When your stock is down in your quiet period, you can’t really talk to people to correct the story. The analysts we had a good relationship with sent a note during the quiet period, letting me know what they were hearing. That meant we were able to address concerns around the data in a press release and on the earnings call.
What do you consider to be your greatest achievement in IR?
I would say the last two and half years at Jack in the Box. We’ve had several activists involved – from Jana Partners to Blue Harbor to Corvex – and we’ve survived with our reputation intact. So dealing with all of that in an upfront fashion and not just putting up barricades, which I see a lot of companies do when activists get involved, is an achievement. I’ve had a reputation for not sugarcoating things, which I’m proud of.
I’m also proud of the fact that I was able to change IR for the better at two companies, not just one.
IR Magazine has run its Women in IR campaign for the last two years, looking to promote gender equality and pay parity within the IR function. What career advice do you have for aspiring IROs – and especially aspiring female IROs?
There are a lot of people new to IR every year. They need to ask themselves what they’re passionate about. To be successful, you absolutely have to be a good communicator. You don’t necessarily have to have a financial background, but it helps – it’s great to strive to be a surrogate for the CFO.
In terms of the women in IR topic, I personally haven’t experienced issues. I was fortunate at Jack in the Box that I had a female CEO who wanted to upgrade the IR function. I can certainly see how issues could arise in other companies, though, especially if it’s treated as a less strategic function.
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