Conduent Incorporated (CNDT) Earnings Call Transcript & Summary

Hello, and welcome to the 2021 Annual Meeting of Stockholders of Conduent Incorporated. Please note that today's meeting is being recorded. During the meeting, participants who properly registered and provided a control number may submit questions or comments pertaining to the subject matter of the specific proposals being presented. You can submit these questions or comments at any time by clicking on the Message icon. It is now my pleasure to turn today's meeting over to Scott Letier, Chairman of the Board. Mr. Letier, the floor is yours.

Thank you. Welcome to Conduent's Fifth Annual Meeting of Shareholders. I'm Scott Letier, the Chairman of the Board, and I will be chairing today's meeting. I want to thank everyone for joining our meeting today. And on behalf of the Board, I'd like to express our hope that you are all staying safe and well. 2020 was a year like no other. The Board of Directors is proud of how far Conduent has come. And we, as a Board, are particularly proud of all Conduent associates who delivered for our clients every day and continue to deliver for our clients every day. Conduent continues to meet or exceed the commitments to our associates, to our clients and to our shareholders. We look forward to continuing this journey with you, our shareholders. I'd now like to introduce the members of the Board of Directors who are on the call with us today. Hunter Gary, Chair of our Compensation Committee and member of our Corporate Guidance Committee; Kathy Higgins Victor, Chair of our Corporate Social Responsibility and Public Policy Committee and member of our Audit Committee; Jesse Lynn, a member of our Corporate Governance and our Corporate Social Responsibility and Public Policy Committee; Steven Miller, Chair of our Finance Committee and member of our Audit Committee; Michael Montelongo, Chair of our Audit Committee and a member of our Finance and Corporate Social Responsibility and Public Policy Committees; Margarita Palau-Hernandez, Chair of our Corporate Governance Committee and Chair of our Compensation Committee -- member of our Compensation Committee, excuse me; and Clifford Skelton, Conduent's Chief Executive Officer. Also participating in this call from PricewaterhouseCoopers, the company's independent auditor, is Prabh Singh, the lead PwC Engagement Partner. In addition, several members of the company's management team are with us today, including our Chief Executive Officer and Board member, Cliff Skelton, who I just introduced; as well as Michael Krawitz, our General Counsel and Secretary. Finally, please note that we are recording today's meeting so that shareholders who cannot attend the meeting can listen to the replay and also to make sure that we have an accurate record of this meeting. Before we turn to the business of the meeting, I'd like to ask Cliff to say a few words.

Thanks, Scott. I hope everyone is doing well, and I appreciate you dialing in today. As you may know, we recently held the Q1 earnings call, and I encourage you to listen to that if you have not already. Our goal is to be the business services partner of choice for companies and governments globally. To do this, we focus on our client success and their desire to deliver exceptional end-user experiences and outcomes. We serve our clients through an extensive portfolio of services and solutions. Through this diverse set of business offerings, we handle millions of interactions every day on behalf of our clients. Getting this right results in opportunities for our clients to reduce cost and improve efficiency. And of course, quality remains paramount along the way. Meanwhile, our financial and operational performance points to the progress we've made over the past 24 months. We achieved another strong sales quarter in Q1, with year-over-year improvement in total contract value, recurring revenue and margin. In addition, we continue to drive a culture of teamwork and leadership. Every member of our team believes in the mission. In fact, we were just named to a list of Best Global Company Cultures by Comparably and to Forbes' Top 500 Companies For Diversity. We've doubled down on our commitment to Environmental, Social and Governance efforts, including a new Board Committee, focused on corporate social responsibility and public policy. We must continue to deliver on our commitments to our associates, to our clients and to you, our shareholders, and we will. Thank you for being on this journey with us. And now I'll turn it back to Scott.

Thanks, Cliff. Let's turn to the business of the day. I will now ask Michael Krawitz to handle some of our administrative matters. Michael?

Thanks, Scott, and good morning, everyone. Greg Veliotis of Computershare has been appointed to act as inspector of election at this meeting. He has subscribed his oath of office and he has submitted his report as follows. There were outstanding on March 26, 2021, the record date for this meeting, 212,388,620 shares of common stock. The holders of approximately 178,001,452 shares are present at the meeting or by proxy or approximately 83.81% of the outstanding shares of common stock. Accordingly, a quorum is present.

Since we have a quorum present, I now declare that the meeting is legally convened. We will now conduct the formal business of the meeting. Michael, please discuss the procedures for transacting business of this meeting.

The agenda has been posted on the website for the meeting, and the meeting will take place as described in the agenda. The guidelines for this meeting have also been posted on the website for this meeting. Shareholders will have the opportunity to ask a question about any resolution that is before the meeting for consideration. If you wish to do so, please click on the Message icon on your screen to submit your question or comment. Please keep your questions or statements brief and limited to the specific item up for discussion. At the relevant time, I'll read questions submitted that pertain to that specific proposal being presented as we go through the formal business noted on the agenda. We will take as many questions as we reasonably can for each item. We'll also have a general Q&A period after our formal business has been conducted so we can address any questions not related to a matter on which you are voting. Our annual meeting guidelines contain a list of questions that will not be entertained at the meeting. Note also that in our annual meeting guidelines, we ask that you limit -- please limit your comments and questions to no more than one submission per agenda item being submitted to the shareholders for consideration and no more than one submission for the general Q&A period. That's to give everybody an opportunity to participate. For the shareholders who wish to vote online during the meeting, there is a Cast Your Vote button available on the screen that is available to shareholders who properly registered and provided a control number. Shareholders may vote until the polls close, which will occur shortly after agenda item #4, the approval of the Conduent 2021 Performance Incentive Plan. If you have voted your shares prior to the start of the meeting, your vote has already been received by the company's inspector of elections and there is no need to vote those shares during the meeting, unless you wish to revoke or change your vote.

Thank you, Michael. I'll now ask you to present the matters to be voted on during this meeting.

First, to the election of directors and on behalf of the Board of Directors, I nominate the following persons named in the proxy statement for election as directors, to hold office for a term of 1 year until their successors have been elected and qualified. Hunter Gary, Kathy Higgins Victor, Scott Letier, Jesse Lynn, Steven Miller, Michael Montelongo, Margarita Palau-Hernandez and Clifford Skelton.

Are there any comments or questions on this proposal?

There are none.

Since there are no additional comments or questions, we will proceed.

The second item for voting is the ratification of independent auditors, and I move for the adoption of the following resolution: resolved, that the selection of PricewaterhouseCoopers LLP to act as the company's independent registered public accounting firm for the year 2021 be and hereby is ratified.

Are there any comments or questions?

No.

Since there are no comments, we'll proceed.

The third item for voting is the proposal regarding approval on an advisory basis of the 2020 compensation of our named executive officers. I move for the adoption of the following resolution: resolved, that the company's shareholders approve on an advisory basis the compensation of the named executive officers as disclosed in the company's proxy statement for the 2021 Annual Meeting of Shareholders pursuant to Item 402 of Regulation S-K, including the compensation discussion and analysis, the summary compensation table and the other related tables and disclosures.

Do we have any questions or comments?

No, Scott. There's none.

Since there are no comments and questions, the discussion of the proposal and resolution is now concluded.

The fourth item for voting is the proposal to approve the Conduent Incorporated 2021 Performance Incentive Plan. I move for the adoption of the following resolution: resolved, that the company's shareholders approve, pursuant to Item 402 of Regulation S-K, the Conduent Incorporated 2021 Performance Incentive Plan as disclosed in the company's proxy statement for the 2021 Annual Meeting of Shareholders.

Are there any comments or questions?

There are none.

Since there are no comments and no questions, the discussion of the proposals and resolutions is now concluded. Ladies and gentlemen, the polls will close shortly. If there is any shareholder who would like to vote before the polls close, please vote now by clicking your Cast Your Vote button on your screen so we can make sure your vote is counted. As was said earlier, if you voted your shares prior to the start of the meeting, there is no need to vote those shares again during the meeting, unless you wish to revoke or change your vote. [Voting]

Does it appear that all the votes are in?

Yes, it does.

I now declare the polls closed. Michael, will you please present the report of the inspector of election?

The inspector of election has presented his preliminary report to me, and he has determined that: first, for the election of directors, each of the director nominees received at least 93.67% of the votes cast at this meeting for his or her election. This satisfies the majority vote requirement for the election of each of the directors. Second, for ratification of PricewaterhouseCoopers LLP as independent registered public accounting firm for the year 2021, 99.78% of the votes have been cast for this proposal. Third, for approval on an advisory basis of the 2020 compensation of our named executive officers, 96.84% of the votes have been cast for this proposal. And finally, for approval of the Conduit Incorporated 2021 Performance Incentive Plan, 96.47% of the votes have been cast for this proposal.

Thank you, Michael. Having received the report of the inspector of election, I declare that all the directors nominated by the Board have been elected; the selection of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for 2021 has been ratified; the 2020 compensation of our named executive officers has been approved; and the Conduit Incorporated 2021 Performance Incentive Plan has been approved. That concludes the formal business portion of the meeting today. There being no further business to come before the meeting, the meeting is adjourned. Cliff and I would be happy to answer any questions of a more general nature. As a reminder, our annual meeting guidelines lists certain topics that we will not address at this Q&A. Also, as requested earlier, please limit your comments and questions to no more than one submission per shareholder. This is in addition to any questions you may have and any questions you've asked in relation to a specific proposal. In order to get through as many questions as we can, some questions on the same topic or related topics may be grouped, summarized and answered together. Michael, are there any questions that have not been addressed?

No, Scott. No questions have come in.

Okay. With that, again, thank you for all of you for joining today. We hope you stay well and stay safe.

This concludes the meeting. You may now disconnect.