Paper Tigers

The SEC may soon let companies direct investors to their online financial filings rather than pay for thousands of mailings. The problem? Some technophobic shareholders still prefer print.


Log on to any public company's Website and with relative ease you can access current financial data, including regulatory filings. It's so easy, in fact, that for the past five years corporations have been campaigning to do away with the slick, costly annual reports they mail to shareholders.

The Securities and Exchange Commission seems likely to agree. On December 13, it will rule on whether firms can just direct shareholders to the online version of their annual reports and mail paper copies only upon request. As the SEC recently approved a similar proposal from the New York Stock Exchange, its own rule will likely pass.

The ruling, says FedEx CFO Alan B. Graf Jr., "will obviously save us a tremendous amount." In fact, the savings on printing and postage could be considerable; nearly 30 percent of companies pay $100,000 or more for printing alone. And in anticipation of the conversion, FedEx and other companies have enhanced their online financial presentations. According to the National Investor Relations Institute, 35 percent of companies have created a separate online version of their report — for less than $20,000 apiece — that investors can view without downloading. CEO Jeff Eichel says almost 2,000 companies pay his firm, IR Solutions, to post interactive or digital reports on its Website.

But here's the rub: more than 80 percent of investors still want a printed version, according to a Withum Smith & Brown survey. "It has larger resolution, the pictures are clearer, it's more portable, and it can be filed away," says George Stenitzer, vice president, communications, at Tellabs, which has surveyed its shareholders' preferences for the past four years. Only 54 percent of investors over the age of 65 go online, he adds.

Still, even if the SEC grants a choice, firms need to put more effort into their reports, says Mike Guillaume, editor of's Annual Report on Annual Reports. Too often they take the easy way out with print versions. "Simply copying and pasting a 10-K hardly qualifies as an annual report," he says. Moreover, given all the disclosures now required, many of the reports are simply a big "yawn," he adds.


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