Have you ever wondered what a one-on-one meeting with your CFO or CEO is worth - not to the company but to the broker arranging the meeting?
How does $4,500 for a meeting at an industry conference and $7,500 to $10,000 per meeting for a non-deal road show appearance sound?
Now you understand why you keep getting called for meetings with management – they are a valuable commodity. That was one conclusion from the most recent Greenwich Associates US Equity Investors Study as interpreted by some savvy observers.
The annual survey estimated that brokerage commissions paid by US institutions on trades of domestic equities fell 13 percent to an estimated $12.1 bn from Q1 2009 to Q1 2010. And an estimated 53 percent of that, or $6.4 bn, was for research, corporate access and sales and account management services not related directly to trade execution.
Greenwich broke it down further, allotting 10 percent, or $900,000, for conferences and 24 percent ($1.2 bn) for non-deal road shows.
Here is where the interpretation comes in. The Wall St Transcript (TWST), which provides software for sell-side firms to manage their corporate access programs under the MeetMax CAM name, estimates that 200,000 one-on-ones take place at conferences annually. Divide that into $900,000 and you get an average of $4,500.
Integrity Research, which researches the equity research industry, reports that TWST also put a range of between $7,500 and $10,000 on the more difficult to estimate non-deal road shows. That translates into approximately 140,000 non-deal one-on-ones a year. Given TWST’s participation in the corporate access market, the numbers have some credibility.
‘This is consistent with our working estimates, so it’s great to get some supporting data on it,’ Integrity added.
