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Finance Best Practices
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based investor notification services, such as www.bestcalls.com, www.vcall.com,
and www.companyboardroom.com to automatically notify their subscribing
investors of the times when they can access these calls. The only limitation on
this approach is the number of investors allowed on a conference call, which one
can select based on the type of conference call paid for. For example, one confer-
ence call company only allows 16 participants in a call, but offers the lowest rate
per minute, while another allows 50 participants but at a slightly higher cost to
the company.
Cost: Installation time:

11–7 OUTSOURCE THE COMPANY STOCK PURCHASE PLAN
Many publicly held companies have a stock purchase plan, which they use to
attract incremental investments by long-term investors who wish to buy small
numbers of shares on a regular basis. Some plans even take regular deductions
from investor bank accounts on an ongoing basis, so repeat contributions require
no effort by investors. An additional feature is that some plans automatically re-
invest dividends (known as dividend-reinvestment plans, or DRIPs). Such plans
are valuable, because they attract those investors who are least likely to sell off
shares at the slightest sign of earnings volatility. The only problem with these
accounts is the cost of servicing them, which is typically in the range of $19 per
year for each investor. Though this may seem insignificant, it can add up if there
are thousands of participating investors.
A simple best practice that relieves a company of this cost is to shift the
plans over to a brokerage firm. A brokerage firm is more than happy to take on
these plans, since they can then charge fees to the participating investors. In
essence, the company has shifted the cost of the stock purchase plan to investors.
However, if making the investment experience as simple and trouble-free for
investors as possible is more important to a company, then retaining the function
in-house in order to avoid charging brokerage fees to investors may be a better
approach. Another problem with this method is that on-line brokerages that handle
these accounts allow investors to sort through the various plans for such features
as the size of the initial investment and the required size of ongoing investments,
which means that a company’s plan is essentially competing for investor attention
with the features of other plans, which may reduce the number of participating
investors. Examples of on-line brokerages that handle stock purchase plans are
www.buyandhold.com, www.netstockdirect.com, and www.investpower.com.

Cost: Installation time: