Avis Budget Group, Inc. (CAR) Earnings Call Transcript & Summary

Good morning and welcome to the 2021 Annual Meeting of Avis Budget Group, Inc. This morning, there will be time for questions. [Operator Instructions] Now it is my pleasure to introduce Joseph A. Ferraro, President and Chief Executive Officer of Avis Budget Group. Mr. Ferraro, I turn the meeting over to you.

Thank you and good morning. I'm Joe Ferraro, President and Chief Executive Officer of Avis Budget Group. It's my pleasure to welcome you to the 2021 Annual Meeting of Stockholders. I would like to start by first thanking our Board of Directors, many of whom are joining this webcast today, including Bernardo Hees, Executive Chairman of the Board. I'd also like to thank the members of our senior leadership team, including Brian Choi, our Executive Vice President and Chief Financial Officer; and all the Avis Budget Group shareholders who are in attendance today. A representative from Deloitte & Touche, the company's independent auditors, is also present today. We appreciate the trust and loyalty you have placed in our company over the years, and I hope that you and your families are safe and healthy. I'd also like to give very special thanks and recognition to all the employees of Avis Budget Group not only for the way they responded to the COVID-19 pandemic, but for everything they continue to do to keep our company and our business up and running. Resiliency is paramount in overcoming challenges of every kind, and we are all truly grateful for your extraordinary efforts and hard work over this past year. When we last convened this meeting, the world, including our company, was grappling with unprecedented global crisis. As the world is looking forward to the easing of restrictions put in place due to COVID-19, our highest priority remains the safety and well-being of our employees, customers and our partners. With that commitment in mind, this year, we are again holding our meeting in a virtual-only format. Before we begin the formal portion of the meeting, let me call your attention to the agenda and rules of conduct that have been posted. After we complete the formal business portion of the meeting, there'll be a general question-and-answer period for questions relating to the company's business. [Operator Instructions] I would now like to call this meeting to order and introduce Jean Sera, the company's Senior Vice President, General Counsel and Corporate Secretary, and call on her to give her report.

Thank you and welcome shareholders. In order to conduct the formal business of the meeting, it is necessary to establish that notice of the meeting was duly and properly mailed and that a quorum is present. We have received an affidavit of mailing signed by Computershare that the notice of this meeting, along with the related proxy materials, was mailed on April 5, 2021, to our company's shareholders of record as of the close of business on March 29, 2021, our record date. A list of shareholders as of the record date is available for inspection by shareholders on the meeting website. Based on the affidavit from Computershare, this meeting is duly called with timely and proper notice. Based on the information provided by Computershare, a quorum of shareholders is present to conduct our meeting today. The company has appointed Christopher Coleman of Computershare as the inspector of election for this meeting to tabulate the votes. Mr. Ferraro will now conduct the formal business of the meeting.

Thank you. There are 3 proposals on the agenda to be voted today. The first proposal is the election of directors as nominated by the Board and set forth in the proxy statement. The second proposal is for the ratification of the appointment of Deloitte & Touche LLP as the company's registered public accounting firm for fiscal year 2021. The third proposal is for the advisory approval of the compensation of our named executive officers. The Board recommends a vote for all director nominees and proposals. We will now pause so that votes can be recorded by any shareholders who have logged in with a valid control number issued by Computershare. If you've previously voted by proxy and do not want to change your vote, your vote has been recorded, and you do not need to vote today. [Voting]

The polls for voting at our 2021 annual meeting are now closed. I will ask the secretary to please provide the results of the voting.

Thank you. I can now report that all the director nominees have been elected. The appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm for fiscal 2021 has been approved, and the compensation of our named executive officers has been approved by an advisory vote. The final voting results will be reported on a Form 8-K to be filed with the Securities and Exchange Commission within 4 business days of this meeting. With the conclusion of the official business, the meeting is now adjourned. Mr. Ferraro will now conduct a question-and-answer session. Today, the company may make statements about its future results and expectations, which constitute forward-looking statements within the meaning of the federal securities laws. Such statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements.

It seems we have 2 questions in the queue. The first question has to do with executive compensation. As long-term investors, people believe today's public company executive compensation plans are largely formulaic, peer-related plans with simplistic annual say-on-pay voting, reinforcing plan homogeny. The Compensation Committee has made some changes to the annual incentive plan that makes it a little less formulaic. Would you or the Chair of the Compensation Committee speak to the scorecard approach that will be used to determine an executive's annual incentive award? Okay. Well, you guys are in luck. We have the chief architect of the scorecard approach, our Chairman, Bernardo Hees. So I'll kick it over to him.

Thanks, Brian, and good morning, everyone. Thanks for the question. I think Avis has been always known for being a performance-driven company and rewarding by performance and achievements, right? The scorecard is another step in that direction in refining the process. And I'm very pleased, and I want to complement Joe for really establishing the scorecard within the leadership and cascade down very clear goals, how their performance and how the achievements of the company is really related to the compensation. And with that in mind, I think, again, it's a tool -- it's one more tool in the direction of being a even more performance-driven organization.

Great. Our second question has to do with stakeholder capitalism versus shareholder capitalism. So the -- can we discuss the Board's perspective on the concept of stakeholder capitalism and what principles the Board would use to balance the interest of various stakeholders as it develops and implements the company's long-term business strategy? I'll take the lead on this, and others can chime in. But it goes without saying that the Board and the management team at Avis Budget Group hold ourselves accountable to our investors, both on the debt and the equity side. But we view our responsibility as encompassing a lot more than that. We obviously have our employees who we hold ourselves accountable to. We have our customers. We have our counterparties. And in a more broader term, we hold ourselves accountable to the community and the environment as well. I believe all of these things are clearly laid out on our website within our values and principles. As we develop our long-term business strategy, we try and make ourselves as efficient and as productive and profitable a company as we can be while holding the interest of all of these stakeholders accountable. I think there are no more questions in the queue. I'll kick it back over to Joe.

Okay. So it appears that there are no further questions. On behalf of our Board of Directors and our leadership team, I would like to thank all of you for taking the time to participate in our 2021 Annual Meeting of Shareholders. This concludes our meeting.

The 2021 Annual Meeting of Avis Budget Group, Inc. has been concluded. You may now disconnect.

Thank you.