CEOs: How Not to Deal With Stock Analysts

Every CEO knows that stock analysts can help make or break his or her company. A downgrade can make a profit pinprick a hemorrhage. The negativity snowballs. Your firm is in trouble.

So, how should you handle analysts? One Wall Street investment analyst, Stephen T. McClellan, has some interesting insights:

• Do not punish or reward analysts. Never blacklist critics or suck up to advocates. Play it straight and be respected.
• When criticized, offer an open door policy.
• Don't play the blame game. When your quarter is lackluster don't blame the recession, the financial meltdown or sunspots. Krispy Kreme got fried when it blamed poor performance on the low carbohydrate diet craze. All analysts had to do was see that Dunkin' Donuts did much better, diets or no.
• Don't take too much credit when things are going well. Don't overemphasis stock price bumps because analysts will remember when things aren't so great a few quarters later.
• Don't trash competing companies.
• Don't try to impress with allusions to your McMansion, gala parties or big pay. Hubris doesn't work.