An annual survey of shareholder letters found that companies scoring high in corporate spin and jargon posted a decline in total net earnings of $26.7 billion from 1999 to 2001.

 

In the same period, companies that published CEO letters providing useful information in clear English posted losses of only $4.1 billion, according to a survey conducted by New York-based investor relations firm andBEYOND Communications.

 

The stock market supports this link between weak communication and earnings losses.

 

From the beginning of 2001 to the end of 2002, the stocks of bottom-ranked companies declined in value by more than 18%, compared to a decrease of 12.7% for the top-ranked companies.

 

More than half of the content of the 25 bottom-ranked companies in the survey is diluted by jargon, spin, and confusing statements. In contrast, these problems show up in only 11% of the content from the top-ranked 25 firms.

 

(Source: The Public Relations Society of America Strategist, Spring 2003, p. 3)