Compass Minerals International, Inc. (CMP) Earnings Call Transcript & Summary

Good day and welcome to the Compass Minerals International, Inc. Annual Meeting of Stockholders. I would now like to turn the conference over to Dick Grant. Please go ahead.

Hello. I'm Dick Grant, Non-Executive Chairman of the Board of Compass Minerals International. Welcome to our 2020 Annual Meeting of Stockholders. I'm very pleased you could join us. Mary Frontczak, Chief Legal and Administrative Officer and Corporate Secretary for the company, will act as Secretary, and I will act as Chair of today's meeting. The meeting is now called to order. As you all know, in light of public health concerns due to COVID-19, we are broadcasting our meeting via live webcast. We know that these are unsettling times and that this pandemic has in one way or another, impacted all of us. For our employees, I continue to be impressed by the dedication you have shown to sustaining our essential business despite this challenge. For our stockholders, know that your Compass Minerals team is rising to the occasion. And we place no higher priority than the commitments we have made to our stockholders, customers and communities coupled with the health and safety of our employees. It is my pleasure to introduce the directors of Compass Minerals, in addition to me, who are present for this meeting. Kevin Crutchfield, our President and CEO; Dave D'Antoni; Valdemar Fischer; Eric Ford; Joe Reece; Allan Rothwell; Lori Walker; Paul Williams; and Amy Yoder. I would now like to take a minute to thank Dave D'Antoni, who is retiring from our Board after more than 15 years of faithful service. On behalf of the entire Board, I want to express my gratitude to Dave for his important, valuable and lasting contributions to Compass Minerals. I would now like to introduce Tim Fagan and [ Kila Leith ] from Ernst & Young, our independent registered accounting firm who are also present. Now we will hear the secretary's report from Mary Frontczak.

Thank you, Dick. Again, this year, Compass Minerals elected to provide access to its proxy materials over the Internet. A notice of Internet availability of proxy materials was sent to our stockholders beginning on March 31, 2020. All stockholders had the ability to access the proxy materials on the website referred to in the notice or request and obtain a paper copy of the proxy materials. This process is an environmentally sound way to reduce the cost of printing and distributing our proxy materials. Broadridge Financial Services acted as our independent vote tabulator again this year and also handle proxy distribution for the company. Based on Broadridge's report, more than 93% of the outstanding shares of the company are represented at this meeting. The agenda appears on your screen on the virtual meeting page. We will conduct the meeting in accordance with this agenda. Notice has been given to the Compass Minerals stockholders in accordance with the company's bylaws, and there is a quorum present. So this meeting is duly convened and is ready for the transaction of business. I would like to introduce Zoe Vantzos, who has been appointed the inspector of election for the 2020 annual meeting and has filed her oath with the secretary. Any stockholder who would like to vote during this meeting should see the proxy ballot available on your screen on the virtual meeting page. Immediately following the meeting, we will entertain questions from Compass Minerals stockholders. Only validated stockholders may ask questions using the ask-a-question tool on the virtual meeting page. Out of consideration for others, please limit yourself to one question. The next order of business is the stockholder vote on the 5 items described in the Compass Minerals proxy statement. The first item for stockholder approval is the amendment of our certificate of incorporation to declassify our Board of Directors. The Board of Directors recommends approval of this proposal. The next item for stockholder approval is the election of directors. Compass Minerals currently has a Board of Directors divided into 3 classes. One class is elected each year for a term of 3 years. This year, the Compass Minerals Board of Directors has nominated and recommended for election Valdemar Fischer; Richard Grant; and Amy Yoder as class 2 directors for 3-year terms expiring at the Annual Meeting of Stockholders to be held in 2023. Unless the declassification proposal, proposal One is approved. In which case, their terms will expire at our 2021 Annual Meeting of Stockholders or until their successors are elected and qualified. No written notice of other nominations was received as provided for in the company's bylaws, so the nominations for directors are now closed. The next item before stockholders is an advisory approval of the compensation of the named executive officers for 2019 as set forth in the Compass Minerals proxy statement. The Board of Directors recommends approval of the compensation of the named executive officers. The next item for stockholder approval is the Compass Minerals International, Inc.'s 2020 incentive award plan. The Board of Directors recommends the approval of this proposal. The next item before stockholders is ratification of the appointment of Ernst & Young LLP as the company's independent registered accounting firm for 2020. The Board of Directors recommends the ratification of the selection of Ernst & Young. The polls are now open. Any stockholder who hasn't yet voted or wishes to change their vote, may do so by clicking on the voting button on the virtual meeting website and following the instructions there. Stockholders who have sent in proxies or voted via telephone or internet and do not want to change their vote, do not need to take any further action. [Voting]

Now that everyone has had the opportunity to vote, I declare the polls for the 2020 Compass Minerals Annual Stockholder Meeting now closed. The final vote totals will be released as soon as the inspector of elections and Broadridge complete their count. And Compass Minerals will announce the voting results via a current report Form 8-K filed with the Securities and Exchange Commission no later than May 20, 2020. From the votes on each item already verified and tabulated today, the inspector of election has reported to me that the amendment to Compass Minerals certificate of incorporation to declassify its Board of Directors is approved. The nominees for class 2 director, Valdemar L. Fischer, Richard S. Grant, and Amy J. Yoder, have been elected, each for a term of 1 year. Stockholders have advised that the compensation of the named executive officers for 2019 is approved. The Compass Minerals International, Inc.'s 2020 incentive award plan is approved, and the appointment of Ernst & Young LLP as Compass Minerals independent registered accounting firm for 2020 has been ratified. I will now turn the meeting back to Dick.

Thank you, Mary. The formal business is completed, and the meeting is now adjourned. Do any stockholders have questions? If so, please submit your questions via the ask-a-question tool on the virtual meeting page. Please note, we will attempt to answer as many questions as time allows. Let us pause for a moment to allow the submission of questions.

Now we will have Theresa Womble, Director of Investor Relations, share any questions that have been submitted. Theresa?

Thank you, Dick. We have 2 questions so far from the [ carpenter ] union pension funds. The first question is directed to Mary. Has the Board considered the adoption of a majority vote standard? And if so, why has it chosen to retain a plurality standard?

Thank you, Theresa. We have a majority vote standard. It's the majority of the votes cast that we consider.

Our second question is this. Given the recent dramatic growth in the size of passive mutual fund corporate ownership interest in U.S. corporations, raises important public policy and corporate governance issues. Currently, BlackRock, Vanguard and State Street collectively hold 27% of the company's outstanding shares. Does the Board see this growing ownership concentration as a positive or negative development as regards long-term corporate planning and performance?

Thanks, Theresa. This is Kevin Crutchfield. I think the management and Board view around passive versus active ownership doesn't affect the way we attempt to run the company day-to-day in terms of its operations, safety of employees and execution of its long-term strategic plan.

Thank you. Seeing no further questions, this concludes today's meeting. Thank you for attending.