AMN Healthcare Services, Inc. (AMN) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the Annual Meeting of Shareholders of AMN Healthcare Services, Inc. At this time, I would like to turn the call over to Mr. Douglas Wheat. Mr. Wheat, you may begin.

Thank you. Good morning, ladies and gentlemen, and welcome to the Annual Meeting of Shareholders of AMN Healthcare Services, Inc. I'm Douglas Wheat, Chairman of the Board of Directors of AMN Healthcare Services, Inc. I'd like to introduce the company's Directors, who are all present today remotely: Mr. Foletta, Mr. Harris, Dr. Johns, Ms. Marsh, Mr. Stern, Ms. Fontenot and Ms. Jones, each a Director of the company and present here today; as well as Ms. Salka, also a Director and -- sorry, lost it. I've lost my page, I apologize, and Chief Executive Officer of the company. Before we begin and turn the meeting over to Ms. Salka, who I have designated to conduct the meeting portion, business of the meeting, I'd like to first call your attention to the rules for conduct of the meeting, which you can view by clicking on the link titled Rules of Conduct in the bottom right-hand section of your screen. I'd also like to extend a very sincere thank you to Mr. Stern, who will be retiring from the Board at the conclusion of his services here today. During his 19 years as a Director, Mr. Stern has offered immeasurable insights on health care policy, administration and operational priorities. I, together with the company and the Board would like to thank Mr. Stern for his dedicated service and wish him and his wife, Sabrina, all the best in retirement. We'll miss you, Andy. I would like to explain the mechanics of the proxy process as it relates to the annual meeting. Shareholders unable to attend the meeting have the opportunity to participate in matters before the meeting through the proxy process. Shareholders' proxies received in time to be voted at the meeting will be voted according to the shareholders' instructions, together with any votes cast at this meeting. Mr. Harris, Mr. Foletta and me have been appointed as proxy agents for all shareholders of the company, who have properly returned their proxy cards representing shares to be voted at the meeting. The record date for shareholders entitled to notice of and to vote at this meeting was February 24, 2020, the notice and proxy materials were mailed to all shareholders of record as of such date. The Corporate Secretary has advised me that the proxies representing, and help me, Denise, what's the exact number?

94.9%.

Of the company's outstanding shares of stock entitled to vote at this meeting have thus far been received. As this represents more than a majority of the outstanding shares of stock entitled to vote at the meeting, a quorum is present for the conduct of meeting. Accordingly, I declare that a quorum is present and that the meeting is duly qualified to transact business. At this point, I would like to turn the meeting over to Ms. Salka to proceed with the formalities of meeting.

Thank you so much, Doug. For the orderly conduct of the meeting, arrangements have been made from Mr. Harris to make a motion with respect to the proposals before this meeting and seconded by Mr. Foletta. The proposals are explained in detail in our proxy statement. I will now explain to you the agenda of the annual meeting. As stated in the notice of meeting and further described in the proxy statement, there are 5 items of business on the agenda. Each item will be presented followed by an opportunity for discussion on the proposal. The polls are now open and will remain open until all items of business have been presented and discussed. At this time, I wish to appoint the company's Chief Legal Officer, Denise Jackson, as the Inspector of Election to count ballots and report the results of the voting. We will begin with the election of the 8 Directors to serve until the next annual meeting of shareholders or until their successors are duly elected and qualified. Your Board of Directors recommends the election of the nominees set forth in the proxy.

I hereby nominate the following persons to serve as directors of the company until the next annual meeting or until their successors are duly elected and qualified. Susan R. Salka; Mark G. Foletta; R. Jeffrey Harris; Dr. Michael M.E. Johns; Martha H. Marsh; Teri G. Fontenot; Daphne E. Jones and Douglas D. Wheat.

I second the nominations.

There being no further nominations, I shall entertain a motion that the nominations be closed.

I move that the nominations be closed.

I second the motion.

The second proposal to be considered and voted on upon is the proposal to approve the compensation of the company's named executive officers. This proposal is a nonbinding shareholder advisory vote. The company's executive compensation is discussed in the proxy statement. Your Board of Directors recommends you vote for the approval of the compensation of the company's named executive officers. Mr. Harris, will you please set forth the motion?

I move that the compensation of the company's named executive officers, as disclosed in the proxy statement pursuant to the compensation disclosure rules of the SEC be approved.

I second the motion.

The third proposal to be considered and voted upon is the proposal to ratify the appointment by the company's Board of Directors of KPMG LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020. Your Board of Directors recommends that you vote for the ratification of the appointment of KPMG as our independent public accounting firm. Mr. Harris, will you please set forth the motion?

I move to ratify the appointment of KPMG LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020.

And I second the motion.

The fourth proposal to be considered and voted upon is the proposal to reduce the ownership threshold necessary to call a special meeting of shareholders to 15% of the company's outstanding shares that have been owned continuously for at least 1 year. Your Board of Directors recommends that you vote for the approval of this proposal to reduce the threshold necessary to call a special shareholders' meeting. Mr. Harris, will you please set forth the motion?

I move that the reduction of the ownership threshold necessary to call a special meeting of the shareholders to 15% of the company's outstanding shares that have been owned continuously for at least 1 year be approved.

And I second the motion.

Mr. John Chevedden has provided notice to present a proposal for consideration at this meeting. Would our operator please open the line for Mr. Chevedden or his representative. Mr. Chevedden or his representative, your line is now open. Please introduce yourself and your relationship to Mr. Chevedden if you are representative.

This is James McRitchie. I'm representing Mr. Chevedden to move his Proposal #5, make the shareholder right to call special meetings more accessible. Shareholders ask our Board to take the steps necessary to amend the appropriate company governing documents to give the owners of a combined 10% of our outstanding common stock the power to call a special shareholder meeting. Adoption of this proposal topic could include a provision that the current 20% stock ownership threshold will apply as a single shareholder calling for a special meeting [ on ] 10% or more of AMN Healthcare stock. The 10% stock ownership threshold is important because the current 20% stock ownership threshold for shareholders to call a special meeting may be unreachable due to time constraints and the detailed technical requirements that can trip up half of shareholders who want to call a special meeting. Thus, the 20% stock ownership threshold to call a special meeting can actually be equivalent to a 40% stock ownership threshold. This proposed topic with the 10% stock ownership threshold won 44% at our 2018 annual meeting. The 2018 proposal did not have the above provision that is in this proposal with regard to the 10% single shareholder concern. If shareholders had a more realistic right to call a special meeting, shareholders would have more of a voice in whether AMN Healthcare should have a new Chairman of the Board to replace Mr. Douglas Wheat. Mr. Wheat has a 20 years long tenure, which can seriously detract from his independence. Mr. Wheat also received the most negative votes of any Director in 2019. Making the right to call a special meeting more accessible to shareholders is showing increased support. For instance, this proposal won 51% at O'Reilly Automotive in... [Technical Difficulty]

Mr. McRitchie, I believe that you are at your 3 minutes of time, and we are going to continue. Thank you for your presentation. The Board of Directors is recommending that our shareholders vote against this proposal. The Board considered the proponent's proposal to reduce the threshold to call a special meeting from the current 20% threshold to 10%, and it does not find it to be in the best interest of all shareholders because it applies different thresholds for different shareholders and creates uncertainty regarding the required threshold. It would also allow a small minority of shareholders to create a financial and administrative burden on the company and our shareholders. The Board does support a reasonable threshold for providing shareholders the right to call a special meeting, which is why it has recommended that our shareholders vote for Proposal 4 to reduce the ownership threshold necessary to call a special meeting of shareholders to 15% without any caveats that vary the threshold depending on shareholder ownership. Of the companies that do offer a special shareholder meeting right, approximately 83% of the S&P 500 and 76% of the Russell 3000 have adopted a provision regarding a threshold of 15% or greater. Mr. Harris, will you please set forth the motion?

I move for a vote on the proposal to request that our Board amend our special meeting bylaw to lower the threshold for shareholders to call a special meeting from 20% to 10% for shareholders that own less than 10% of the company's outstanding shares.

I second the motion.

This being all of the items of business to be taken up at this meeting, we open up the floor for any discussion on any of the foregoing proposals. And we are looking for any potential questions or discussions. There are no questions. So thank you. There being no other matters of shareholder business having been properly brought before this annual meeting in accordance with our bylaws and no further discussion, the polls will now be closed. We will now turn to the voting results. Ms. Jackson, will you now please report the results of the voting?

On the matter of the election of the 8 Directors, based upon the votes received, the percentage of shares entitled to vote that voted for each of the directors was as follows: Mark G. Foletta, 99.9%; Teri G. Fontenot, 99.9%; R. Jeffrey Harris, 97.7%; Dr. Michael Johns, 98.2%; Daphne E. Jones, 99.9%; Martha H. Marsh, 99.7%; Susan R. Salka, 99.3%; Douglas D. Wheat, 95.3%.

Accordingly, the following individuals are hereby elected directors of the company: Mark G. Foletta, R. Jeffrey Harris, Dr. Michael M.E. Johns, Daphne E. Jones, Martha H. Marsh, Susan R. Salka, Teri G. Fontenot and Douglas D. Wheat.

Regarding the proposal for the approval on a nonbinding advisory basis of the compensation of our named executive officers, there were 40,456,532 shares entitled to vote and present or represented by proxy that voted for the proposal, which equals 95.4% of all shares entitled to vote that were present or represented by proxy.

The number of votes cast in favor of the proposal represents more than a majority of the shares entitled to vote and present or represented by proxy. Therefore, the proposal to approve on a nonbinding advisory basis, the compensation of our named executive officers is hereby adopted. Although this proposal is not binding on the company, the Board of Directors and the compensation committee value the opinions of the shareholders, and we'll take the recommendations of our shareholders into account when making future decisions regarding executive compensation.

Regarding the proposal for the ratification of the appointment by the Board of Directors of KPMG LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020, there were 43,114,380 shares entitled to vote in present or represented by proxy that voted for the proposal, which equals 96.9% of all shares entitled to vote that were present or represented by proxy.

The number of votes cast in favor of the proposal represents more than a majority of the shares entitled to vote and present or represented by proxy. And the proposal to ratify the Board of Directors' appointment of KPMG LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020, is therefore adopted.

Regarding the proposal to reduce the ownership threshold necessary to call a special meeting of shareholders to 15% of the company's outstanding shares that have been owned continuously for at least 1 year. There were 36,319,061 shares entitled to vote and present or represented by proxy that voted for the proposal, which equals 85.7% of all shares entitled to vote that were present or represented by proxy.

The number of votes cast in favor of the proposal represent more than the majority of the shares entitled to vote and present or represented by proxy. Therefore, the proposal to reduce the ownership threshold necessary to call a special meeting of shareholders to 15% of the company's outstanding shares that have been owned continuously for at least a year is approved.

Regarding the shareholders' proposal to lower the threshold for shareholders to call a special meeting of shareholders from 20% to 10% for shareholders that own less than 10% of the company's outstanding shares. There were 28,818,260 shares entitled to vote and present or represented by proxy that voted against the proposal, which equals 68% of all shares entitled to vote that were present or represented by proxy.

The number of votes cast against the proposal represents more than a majority of the shares entitled to vote and present or represented by proxy. Therefore, the shareholder proposal to lower the threshold for shareholders to call a special meeting of shareholders from 20% to 10% for shareholders that own less than 10% of the company's outstanding shares is dismissed. If there is no further business, I will entertain a motion to adjourn.

I move that the meeting be adjourned.

I second the motion.

Will those in favor, please say, aye? [Voting]

Any opposed? [Voting]

This meeting is now adjourned. Thank you, everyone, for attending.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.