Codexis, Inc. (CDXS) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. I'm John Nicols, President and CEO of Codexis, Inc. I'm pleased to welcome you to the 2020 Annual Meeting of Stockholders of Codexis, Inc. We are hosting our annual meeting virtually this year due to the public health impact of the COVID-19 outbreak and to support the health and well-being of our partners, employees and stockholders. Before I call the meeting to order, I would like to introduce to you the officers and members of our management team online with us today: Mr. Ross Taylor, Senior Vice President and Chief Financial Officer; and Mr. Rich Sabalot, Senior Corporate Counsel. I would also like to introduce Alexander White of Latham and Watkins LLP, the company's outside counsel; [ Cathy Weeden ], inspector of election; and Ayoub Sunna and Christina Minasi of BDO USA, LLP, the company's independent registered public accounting firm. Mr. White will act as secretary of the meeting. Let me start with a brief review of the agenda for today's meeting. We will start by taking care of some housekeeping items, and then we'll move to the formal business for today's meeting, consideration of the proposals described in our proxy statement. After the conclusion of the formal business, we will provide time for appropriate questions. [Operator Instructions] We hope we can complete the meeting in about 30 minutes, and we intend to answer as many questions as possible in the time allotted. If you encounter any difficulty submitting questions during the meeting, please refer to the proxy statement for information on how to reach our support team. The meeting will now come to order. We will now proceed with the formal business of the meeting as set forth in the notice of annual meeting and proxy statement. I have at this meeting a complete list of the stockholders of record of the company's capital stock on April 21, 2020, the record date for this meeting. That list of stockholders and the number of shares held by each such stockholder as of that record date is available on the web portal for any stockholder wishing to inspect it. The stockholder list shows that as of the record date, there were 59,016,937 shares of common stock outstanding and entitled to vote at this meeting. I also have an affidavit certifying that on May 27, 2020, either: number one, a notice of Internet availability of the proxy materials; or number two, the proxy materials themselves were sent either by United States mail or e-mail to all stockholders of record at the close of business on April 21, 2020. [ Cathy Weeden ] has been appointed to act as inspector of election at this meeting. [ Ms. Weeden ] has taken and subscribed the customary oath of office to execute her duties with strict impartiality, which will be filed with the records of the meeting. Her function is to decide the qualifications of voters, accept their votes and when voting on all matters is completed, to tally the votes cast as to each matter. I am informed by the inspector of election that based on the number of proxies received to date, a quorum is present and the meeting will proceed. I hereby -- accordingly, I hereby declare this meeting to be duly constituted for the transaction of all business. We will now proceed with the formal business of this meeting. There are 3 proposals to be considered by the stockholders at this meeting, which are listed in our proxy statement. They are: number one, to elect 3 members of the company's Board of Directors to serve until the 2023 Annual Meeting of Stockholders or until their successors are elected and qualified; number two, to ratify the selection of BDO USA, LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2020; number three, to hold a nonbinding advisory vote on the compensation of our named executive officers. No other matters will be considered. The time is now 9:06 a.m. California time on June 16, 2020, and the polls are now open for voting on all matters to be presented. The polls will be closed to voting after we go through the matters to be voted upon. The first item of business is the election of the 3 directors nominated by the Board of Directors. The following individuals have been nominated to the Board of Directors to serve until the 2023 Annual Meeting of Stockholders: Alison Moore, PhD; Stephen Dilly, MBBS, PhD; and Patrick Y. Yang, PhD. The Board of Directors recommends that stockholders vote for the election of each of the nominees. No other nominations complying with the nomination procedures in the company's bylaws have been received, and the nominations are closed. A preliminary tabulation by the inspector of election of the votes submitted by proxy prior to the beginning of this meeting shows that 99.7% have voted for the election of Dr. Moore for director; 99.6% have voted for the election of Dr. Dilly for director; and 98.8% have voted for the election of Dr. Yang for director. The second item of business is the ratification of the appointment of BDO USA, LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020. The Board of Directors recommends that the stockholders vote for the ratification and appointment of BDO USA, LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020. A preliminary tabulation by the inspector of election of the votes submitted by proxy prior to the beginning of this meeting shows that 99.9% have voted for the ratification of BDO USA, LLP as the independent registered public accounting firm for the company for the fiscal year ending December 31, 2020. The third item of business is the nonbinding advisory vote to approve the compensation of our named executive officers as disclosed in our proxy statement, which we refer to as the say-on-pay vote. The Board of Directors has recommended that the stockholders vote for the approval of the following resolution. Resolved that the compensation paid to Codexis, Inc.'s named executive officers, as disclosed in the proxy statement for the 2020 Annual Meeting of Stockholders pursuant to Item 402 of Regulation S-K, including the disclosure under the heading Executive Compensation, is hereby approved. A preliminary tabulation by the inspector of election of the votes submitted by proxy prior to the beginning of this meeting shows that 92.8% have voted for the approval of the compensation of our named executive officers. Any stockholder who has not yet voted or wishes to change their vote may do so by clicking on the Voting button on the web portal and following the instructions there. Stockholders who have sent in proxies or voted via telephone or Internet and who do not want to change their vote do not need to take any further action. Only stockholders of record on April 21, 2020, or their proxy holders are eligible to vote at this meeting. We are now going to take a short pause to allow for any stockholders who may -- who have not yet voted to do so. [Voting]

The time is now 9:10 a.m., and the polls are now closed for voting. We have been informed by the inspector of election that the preliminary vote report shows that there were sufficient votes for the election of each of the nominees: Dr. Alison Moore; Dr. Stephen Dilly; and Dr. Patrick Y. Yang, and each is hereby elected to the Board of Directors to serve until the 2023 Annual Meeting of Stockholders. In addition, the inspector of election's preliminary vote report for each of the other proposals is as follows: the proposal to ratify the appointment of BDO USA, LLP as the company's independent registered accounting firm for the fiscal year ending December 31, 2020, has received sufficient affirmative votes and is approved; the proposal to approve the compensation of named executive officers on a nonbinding advisory basis has received sufficient affirmative votes and is approved. The inspector of election will prepare a final report that will be included as part of the record of this meeting. We will be reporting the final vote results in a current report on Form 8-K, which will be filed with the Securities and Exchange Commission within the next 4 business days. The results can also be obtained before that date by writing to our corporate secretary. That concludes the formal portion of our meeting. The meeting is adjourned at 9:12 a.m. California time. We will now answer appropriate questions from stockholders. We will take stockholders' questions that are being entered today on the web portal. Please note, we will attempt to answer as many questions as time allows, but only appropriate questions that are germane to the meeting will be addressed.

Okay. We have one question that's come in. The question, I will read. How does the company consider the issue of diversity at the Board level, particularly ethnic and racial diversity? Diversity has been shown to enhance decision-making and provide protection against potential insularity and groupthink. Thank you for the question. Diversity at the Board level and at all levels of management and the company is a very important topic for Codexis. We have had an active program to ensure we have diversity on multiple dimensions: diversity of ethnicity, diversity of color, diversity of experiences, diversity of backgrounds, diversity of styles. And we think we've got a very effective diverse Board accumulated, but we do have some opportunities to improve, which are key considerations for our Board and our Nominating Committee to address over time. I hope that answered that question sufficiently for now. We're going to pause for any additional questions. Okay. I'm going to give one more pause, just in case, just to make sure that all of our stockholders have a chance to ask questions as they desire to. And I am seeing no further active questions from any of our stockholders. So that concludes the question-and-answer session of the annual meeting. Thank you for attending our 2020 Annual Meeting of Stockholders. I really appreciate the time and the interest in Codexis from all of our shareholders. Thank you very much.

Now -- and this concludes today's conference call. Thank you for participating. You may now disconnect.