C.H. Robinson Worldwide, Inc. (CHRW) Earnings Call Transcript & Summary

Good day and welcome to the C.H. Robinson Worldwide, Inc. 2020 Annual Meeting of Shareholders. I'd now like to turn the conference over to Chris Gerst, Assistant General Counsel and Assistant Secretary. Please go ahead.

Good afternoon and welcome to the C.H. Robinson Worldwide, Inc. 2020 Annual Meeting of Shareholders. My name is Chris Gerst, the Assistant General Counsel and Assistant Secretary of C.H. Robinson Worldwide, Inc. We are hosting our 2020 Annual Meeting of Shareholders in a virtual format, which we believe allows C.H. Robinson to be more inclusive and to safely and thoughtfully reach out to and communicate with a greater number of our shareholders. We are joined at today's annual meeting by shareholders attending via the Internet, a link to which has been provided to our shareholders in our proxy statement and other shareholder materials. We will conduct the formal business portion of our annual meeting first and answer shareholders' questions following that discussion. If you have logged into the annual meeting with your control number, you may ask a question at any time by typing your question into the box at the bottom of the web page. I would like to begin by introducing our Chief Executive Officer and our Board of Directors, all of whom are also attending our annual meeting. Our President and Chief Executive Officer is Bob Biesterfeld. The members of our Board of Directors are: Scott Anderson, Wayne Fortun, Timothy Gokey, Mary Guilfoile, Jodee Kozlak, Brian Short, Jim Stake, Paula Tolliver and John Wiehoff. Various members of C.H. Robinson's executive management team are also attending our annual meeting, including Ben Campbell, Chief Legal Officer; Michael Castagnetto, President, Robinson Fresh; Angie Freeman, Chief Human Resources and ESG Officer; Jordan Kass, President, Managed Services; Mike Neill, Chief Information Officer; Chris O'Brien, Chief Commercial Officer; Mac Pinkerton, President, North American Surface Transportation; Mike Short, President, Global Freight Forwarding; and Mike Zechmeister, Chief Financial Officer. Katie Knudtson, a representative from Deloitte & Touche LLP, our independent registered public accounting firm for the fiscal year 2019, is also attending our annual meeting. Kris Sundberg, a representative from The Links Group, is also in attendance today and is acting as our inspector of elections. At this time, I would like to call the C.H. Robinson Worldwide, Inc. 2020 Annual Meeting of Shareholders to order. On or before March 24, 2020, a notice of this meeting and a notice regarding the availability of proxy materials via the Internet were properly given to all shareholders of record as of March 11, 2020. Before we review the matters presented to our shareholders and announce the results of the election, please note that any shareholder who hasn't yet voted or who wishes to change their vote may do so by clicking on the voting button on the bottom of the web page and following the instructions stated there. Shareholders who have sent in proxies or voted via telephone or Internet and who do not wish to change their vote do not need to take any further action. Ms. Sundberg will ensure that all votes, including any votes submitted at today's annual meeting prior to the polls closing, are included in the final tabulated results. I have been informed that 114,332,508 of the 131,339,702 outstanding shares of the company as of March 11, 2020, are represented here today by proxy. The shares presented at this meeting constitute 87% of the outstanding shares of the company. As a result, a quorum is present and this annual meeting of shareholders of C.H. Robinson Worldwide, Inc. is officially convened. As set forth in the proxy materials delivered to our shareholders, there are 3 proposals on which our shareholders are being asked to vote. The first proposal to be considered at this annual meeting is the election of Scott Anderson, Robert Biesterfeld, Wayne Fortun, Timothy Gokey, Mary Guilfoile, Jodee Kozlak, Brian Short, Jim Stake and Paula Tolliver, the 9 director nominees that have been recommended by the Governance committee and nominated by the Board for election in this year's proxy statement. If elected, each director nominee will serve a 1-year term, which will expire at the company's annual meeting in 2021 or until their successors are otherwise chosen. The Board of Directors has recommended a vote for the election of each nominee. The second proposal to be considered at this annual meeting is an advisory vote on the approval of the compensation of the company's named executive officers. The Board of Directors has recommended a vote for the approval of the compensation of the company's named executive officers. The third proposal to be considered at this annual meeting is the ratification of the selection of Deloitte & Touche as the company's independent registered public accounting firm for the fiscal year 2020. The Board of Directors has recommended a vote for the ratification of the selection of Deloitte & Touche as the company's independent registered public accounting firm. At this time, any remaining votes must now be cast as the polls will now close. Again, all votes including any votes submitted at today's annual meeting prior to the poll's closing, will be included in the final tabulated results. I am able to report that based on the proxies in hand, each of the 9 director nominees set forth on the directors slate nominated by the Board of Directors have been elected. The advisory vote on the compensation of the company's named executive officers has been approved. And the proposal to ratify the selection of Deloitte & Touche as the company's independent registered public accounting firm for the current fiscal year has also been approved. The final voting results will be included in the report on Form 8-K that the company will be filing with the Securities and Exchange Commission in the next few days. You will be able to access this Form 8-K through the company's website. Before we begin answering shareholders' questions, please note that the responses to questions asked by shareholders today may contain forward-looking statements, including statements concerning future operating results. Such forward-looking statements are not guarantees of future results and involve risks and uncertainties that may cause actual results to differ materially from the potential results discussed today. Such statements are based upon the current beliefs and expectations of management and are subject to significant risks, uncertainties and other risk factors listed from time to time by C.H. Robinson in its Securities and Exchange Commission filings. At this point, we are happy to receive questions from our shareholders. [Operator Instructions]

We have received a question from a shareholder regarding -- describing the process by which our lead partner from Deloitte & Touche is rotated and the decision-making authority in selecting a new lead partner. While the lead partner from Deloitte & Touche is present on the call, she is unable to speak in this forum at this time. C.H. Robinson will reach out to this shareholder following this call and discuss this response with them directly. A second question received by C.H. Robinson asks, "The recent dynamic growth in the size of passive mutual funds corporate ownership interest in U.S. corporation raises important public policy and corporate governance issues. Currently, BlackRock, Vanguard, State Street hold 29% of the company's outstanding shares. Does the Board see this growing ownership concentration as a positive or negative development as regards to long-term corporate planning and performance? And also, are there potential conflicts of interests when a 5% holder is a managing company retiring plan assets?" Answering this question is C.H. Robinson's Chief Financial Officer, Mike Zechmeister.

Thank you for the question. While we don't play a direct role in the decision of a shareholder to buy or sell our shares, we appreciate all of our shareholders and take our obligation to act in the shareholders' best interest with great care and attention. With respect to the company retirement plan assets, we see those actions and decisions as independent from share ownership.

A third question received from a shareholder asks, "I see C.H. Robinson has laid off 7% of the U.S. and Canadian workforce. What have you done in other countries?" Answering this question on behalf of C.H. Robinson is Bob Biesterfeld, President and CEO.

Thank you for the question. So just a point of clarification on this. This was -- [ likely ] proposes 7% layoffs. Just to be very clear, we did not execute layoffs to that extent across the organization. What we stated in our most recent earnings release is that we had implemented furloughs, temporary furloughs that equaled approximately 7% of our global workforce. And so that extended outside of U.S. and Canada. In terms of the global nature of our business, we are continuing to align the size of our workforce to the demands within the business.

At this point, we have received no further questions. At any time, shareholders with questions about C.H. Robinson may contact Chuck Ives, C.H. Robinson's Director of Investor Relations, at (952) 683-2508. This concludes the C.H. Robinson Worldwide, Inc. 2020 Annual Meeting of Shareholders, which is now adjourned. Thank you for your attendance and participation in this year's annual meeting of shareholders. Goodbye and please stay safe and healthy.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time.