The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Vince Valentini - TD Securities Equity Research - Analyst
: My congrats to Frank as well, and all the best to you. Your stock is up like 4% to 5% today, which may surprise you. It surprises me a little bit, given
the strength of the revenue and the increased guidance. I think there may be a bit of concern about these extra costs in the fourth quarter. So Mike,
I'm hoping you can flesh that in a bit more detail, both the extra compensation costs you talk about, is this some sort of one-off? Or is this a new
run rate? And then the $25 million, I'm not sure I fully get it. It's not part of the Change Program, but it's related to go-forward improvements in
sort of sales and service capabilities. And technically, was that in the Corporate line? Or was that spread across the other 3 or 5 divisions?
Question: Vince Valentini - TD Securities Equity Research - Analyst
: Actually, can I just clarify on the compensation impact of 100 basis points? Is that a bit of a timing issue because the targets weren't fully met in
2020 for reasons that may have been beyond management's control? But are you sort of snapping back to a full year of all those performance
bonuses being paid? So if I look forward to '22, even if you meet all your targets, it won't be another 100 basis point drag, it will be more of a plateau?
Question: Vince Valentini - TD Securities Equity Research - Analyst
: I think you did.
Question: Stephanie L. Yee - JPMorgan Chase & Co, Research Division - Analyst
: This is Stephanie Yee sitting in for Andrew. Just had a question on the margin trajectory, I guess, from 31% in 2021 to 35% in 2022. It looks like
you'll already be at kind of that 35% level in the first quarter. And I know you talked about a lot of different drivers. But I just wanted to get a little
bit more color on what that step-up -- what's driving that step-up?
Because as we look to 2023, it looks like the margin step-up from '22 to '23 is really just taking out the Change cost. There was a 470 basis point
drag in the fourth quarter, you're still investing in '22. So '23, we don't have those costs anymore. So kind of that step-up from '22 to '23 is, I feel,
like more visible. So if you can just kind of comment on kind of going to 35% in the next year in the first quarter.
Question: Stephanie L. Yee - JPMorgan Chase & Co, Research Division - Analyst
: Okay. Great. That's super helpful. And if I can just ask a follow-up question. So you guys talked about additional interest in M&A this year. Is legal
contract management solutions an area that Thomson might be interested in pursuing?
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FEBRUARY 08, 2022 / 2:00PM, TRI.TO - Q4 2021 Thomson Reuters Corp Earnings Call
Question: Paul Steep - Scotiabank Global Banking and Markets, Research Division - Analyst
: Congratulations, Frank. Welcome, Gary. Steve, could you just give maybe a higher-level view of M&A? There's more discussion around it in terms
of the approach. Should we think of it more as a Pondera, Netmaster-like? Or is this larger acquisitions you're thinking of more transformative? Or
are we thinking more incremental technologies to drive growth? And then I've got one quick follow-up.
Question: Paul Steep - Scotiabank Global Banking and Markets, Research Division - Analyst
: Great. And then the follow-up would just be, could you remind us a little bit on the size of the GRC business today and maybe the opportunity set
that it's looking at in terms of growth potential relative to the rest of the group, obviously, reflecting it's off a smaller base?
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