Compass Diversified (CODI) Earnings Call Transcript & Summary

Welcome to the Compass Diversified Holdings Annual Meeting. My name is Peggy, and I will be your operator. [Operator Instructions] I would now like to turn the conference over to Sean Day, Chairman of the Board. You may begin.

Good morning, ladies and gentlemen. The meeting will now come to order. It's a pleasure to welcome you to this annual meeting of the shareholders of Compass Diversified Holdings. I am Sean Day, Chairman of the Board. We hope that everyone is doing well and staying safe during this unprecedented time, the health and well-being of our team, stakeholders and all of you is our top priority in light of the coronavirus, COVID-19, we have made a decision to move to a completely virtual shareholder annual meeting conducted via live audio webcast. This webcast incorporates shareholder validation capabilities, which means that any shareholder can vote in real-time during this meeting unless the polls were closed. And any shareholder may submit questions while the meeting is still in progress. I now declare the polls open for voting. [Voting]

If you have already voted your proxy, please do not vote again unless you would like to change your vote. If you want to vote now, click on the Vote Here button at the bottom-right corner of the screen. The polls will remain open until the conclusion of the presentation of proposals. I hope you entered this meeting using your 16-digit control number. If you did not, you'll be unable to vote your shares or submit questions during this meeting. After the meeting has been adjourned, the company's management and I will answer questions submitted on the website in the field provided for shareholders. We may not have enough time to answer all the questions submitted by shareholders during the meeting. So if you would like a direct response after this meeting, please provide your contact information along with your question. We ask that you restrict any questions to the subject matter of this meeting. I would like to take this opportunity to introduce the directors who are all in attendance at this meeting. Gene Ewing, Sally McCoy, Harold Edwards, Gordon Burns, Larry Enterline and James Bottiglieri. Also in attendance today on the offices of the company and members of the management team, Elias Sabo, who is the CEO and a Director; Ryan Faulkingham, our Chief Financial Officer; Pat Maciariello, the Chief Operating Officer; and a partner of Compass Group Management, LLC; Dave Swanson, who is a partner of Compass Group Management as well; and Carrie Ryan, who's our Corporate Secretary. They're a terrific management team, who've done an excellent job. [ Patricia Hoffman ], a representative of Broadridge, has been appointed to serve as the Inspector of Election for this meeting. The notice of meeting, together with the proxy statement were sent to all persons who were shareholders of record at the close of business on March 30 this year and such shareholders of record are entitled to vote of this meeting. I've been informed by the inspector of election that a majority of the outstanding shares of the company are present in person or represented by proxy at this meeting. Therefore, we have a quorum, and the meeting is duly convened. Since no shareholder nominations, all proposals were properly filed with the company's secretary in advance of this meeting, the business of this meeting is limited to the proposals described in the company's proxy statement. I will now present the proposals described in the proxy statement. Proposal #1 is the election of 2 Class 2 directors of the company. The 2 members who are elected today and the remaining 5 directors whose terms continue after this meeting will be the directors of the company. James Bottiglieri and Gordon Burns have been nominated for election as Class 2 directors, each to serve for a 3-year term once the successor has been elected and qualified. Both nominees are presently directors of the company. Our Board recommends that you vote for all Director nominees listed, that is Messrs. Bottiglieri and Burns, to be elected to our Board as Class 2 directors for a 3-year term ending at our 2023 annual meeting of shareholders. Proposal #2, to approve on a nonbinding and advisory basis is the resolution approving the compensation of our named executive officer as disclosed in the proxy statement. Our Board recommends that you vote on a nonbinding and advisory basis for the resolution approving the compensation of our named executive officer as disclosed in the proxy statement. Proposal #3, to ratify the appointment of Grant Thornton LLP to serve as the independent auditor for the company and the trust for the fiscal year ending December 31, 2020, as recommended by our auditor committee. Our Board recommends that you vote based on the recommendation of the audit committee for the ratification of the appointment of Grant Thornton LLP to serve as independent auditor for the company and the trust for the fiscal year ending December 31, 2020. Because each of these items was listed in the notice of the meeting, I will not ask for a motion or a second to approve any of these items. As all proposals have now been presented, and all shareholders have been given an opportunity to vote, I now declare the polls closed and ask the inspector to read off the preliminary results of the voting. Over to the inspector.

Mr. Chairman, I have received the preliminary tabulation report and based on that report, I declare as follows: Mr. Bottiglieri received 92% of the shares of the company voted for the election of a Class 2 Director; and Mr. Burns received 77.3% of the shares of the company voted for election as a Class 2 Director. No other candidates for election of the Class 2 Director received any votes. At least 39.5% of the shares of the company voted in favor of proposal #2, the approval on an advisory basis of the compensation of the company's named executive officer. And at least 81.8% of the shares of the company voted in favor of the proposal #3, the ratification of the appointment of Grant Thornton LLP as the company's independent auditor for the fiscal year ending December 31, 2020.

Thank you. I'm pleased to announce that Messrs. Bottiglieri and Burns have, therefore, been duly elected as Class II directors, each to serve a 3-year term or until his successor has been elected and qualified. Since the number of votes in favor of approval of proposal #2 represents more than a majority of the shares of the company represented by proxy, I'm pleased to announce that proposal #2, the advisory vote on the compensation of our named executive officer has been approved. Since the number of votes in favor of approval of proposal #3 represents more than a majority of the shares of the company represented by proxy. I'm pleased to announce that the ratification of the appointment of Grant Thornton LLP as the company's independent auditors for the fiscal year ending December 31, 2020, has been approved. The final voting results of today's meeting will be reported on Form 8-K and filed within 4 business days of this meeting. This concludes the formal matters to be acted upon at this annual meeting. Are there any questions or comments concerning the formal part of the meeting?

Mr. Day, we have received no questions at this point.

All right. Then -- well, then, since there's no further business to come before this meeting, it would be in order to adjourn the meeting. Is there a motion to do so?

I move that we adjourn the meeting.

Is there a second to this motion?

I second the motion.

All right. It's been moved and seconded that the meeting adjourn. All in favor, say aye.

Aye.

Aye.

Aye.

All oppose, say nay. Okay. The motion is carried, and the meeting is adjourned. Thank you very much, everybody, for attending.

Thank you, all. This does conclude today's conference, and thank you for participating. You may now disconnect, and have a great day.