COPT Defense Properties (CDP) Earnings Call Transcript & Summary

Welcome to the 2021 Annual Meeting of Shareholders of Corporate Office Properties Trust. Thomas Brady, the Chairman of the Board of Corporate Office Properties Trust will preside over the meeting. Mr. Brady?

Thank you. Good morning, and welcome to the 2021 Annual Meeting of Shareholders of Corporate Office Properties Trust. I'm Tom Brady, Chairman of the Board, and it's my pleasure to serve as Chairman of this meeting. Before we begin, let's address a few administrative items. If you have not cast your votes prior to the date of this meeting, you may do so during the meeting by following the instructions posted on the virtual meeting website. In addition, during the course of the meeting, you may submit questions through the same website by using the message icon in the top center of the screen. At this time, I call the meeting to order. The other trustees of the company participating in today's meeting are: Steve Budorick, our President and CEO; Rob Denton; Phil Hawkins, David Jacobstein, Steve Kesler, Tish Long, Ray Owens, Taylor Pickett and Lisa Trimberger. The 2021 annual meeting is formally called to order. Our agenda will be to conduct the formal business of the meeting, which includes 3 proposals, which I will describe in a moment. But first, to the business of the meeting, let me turn it over to David Finch, who is the company's General Counsel and Secretary of the meeting. David?

Thank you, Tom. First, a final reminder that if you have not yet voted on the 3 proposals, you may do so during the course of this meeting by following the instructions on the website. If you need technical assistance, please call the number provided on the website, which is 1 (800) 690-6903. Shareholders who have already submitted their proxy cards may not vote during this meeting. Your voting instructions will be carried out by the appointed proxies, Steve Budorick and Anthony Mifsud. The Board of Trustees established March 12, 2021, as the record date for determining all shareholders entitled to receive notice of and vote at this meeting. Mr. Chairman, I have copies of the notice of meeting, proxy statement and proxy card as well as the notice filed with the United States Securities and Exchange Commission confirming the Annual Meeting of Shareholders would be conducted pursuant to a virtual format. I also have an affidavit of distribution of the materials on April 1, 2021, to each shareholder of record as of the close of business on March 12, 2021. The affidavit is an order and made by Broadridge, which serves as the proxy tabulator for the company. The polls have been opened for voting on the matters listed on the notice since April 1, 2021. An alphabetical list of shareholders entitled to vote at this meeting with the address and number of shares held by each, is present and available for inspection. This has been certified correct by EQ Shareowner Services, the company's transfer agent. The list that's been available for the 10 days preceding this meeting, the notice of meeting and affidavit distribution will be in the company's minute books. I suggest we dispense with the reading of the notice of the meeting and affidavit of distribution.

It is so ordered.

The company has received proxies of shareholders of the company's common stock. Each of these has been carefully checked and is in good order. There are over 112 million common shares outstanding and entitled to vote at this meeting. There are an excess of 103 million common shares represented by proxy at this meeting, which constitutes approximately 92% of the outstanding shares entitled to vote today. Therefore, a quorum is present.

Thank you, David. As Chairman of the meeting, I declare it properly constituted, duly organized and ready for business.

Mr. Chairman, that completes the necessary formalities. We can now proceed with the business of the meeting.

As I mentioned, we have 3 matters to be voted upon. In order to conduct this meeting in an efficient matter, I suggest the items be proposed and that the vote with respect to all matters take place following the proposal. Once votes are taken, we will report on the outcome. The first matter is the election of 10 trustees. The nominees are: Steve Budorick, Rob Denton, Phil Hawkins, David Jacobstein, Steve Kesler, Tish Long, Ray Owens, Taylor Pickett, Lisa Trimberger and myself. All 10 are presently trustees of the company and have been nominated to serve until the 2022 annual meeting. No other nominations have been received, and no additional nominations may be made at this time. The second matter is the ratification of the appointment of PricewaterhouseCoopers as our independent registered public accounting firm. And third, is approval on an advisory basis of the compensation of our named executive officers. There being no other matters be presented. I now declare the polls open for voting. Anyone who wishes to vote should follow the instructions on the virtual meeting website. If you have already submitted your proxy, there is no need to vote at this time. We will pause for a few minutes to allow shareholders participating in this meeting to submit their votes, if they have not already done so. [Voting]

I believe that the votes are now tallied. Mr. Finch, please present the results.

First, each of the nominees has received the majority of the votes cast. Accordingly, each nominee has been elected as a trustee of the company to serve a 1-year term and until his or her successor is duly elected and qualified. Second, the resolution to ratify the appointment of PricewaterhouseCoopers as the company's independent registered public accounting firm received a requisite majority of shareholder vote. And third, the shareholders have approved the compensation of the company's named executive officers.

Thank you. That concludes the formal business for this morning. I will entertain a motion that the annual meeting be adjourned.

I move for adjournment.

I move for adjournment.

I second the motion.

There being no further business, the meeting is adjourned. At this time, I would like to introduce our President and CEO, Steve Budorick, who will respond to any questions received during the meeting. Steve?

So we've received 1 question, regarding the structure of our executive compensation plan, noting the similarity of our structure to that of other publicly-traded REITs and specifically inquiring why we don't tailor the plan more specifically to our long-term strategic objectives? I will refer this question to the Chairman of our Compensation Committee, Taylor Pickett. Taylor?

Thanks, Steve. A couple of things to note. Our compensation plan has 3 components, and one important component is the annual bonus every year in the plan. And that is focused exclusively on achieving important long-term business milestones. And since these targets change and evolve every year, we think the annual measure is most appropriate for our business. Turning to the share compensation component. This reflects longer-term share performance and is designed with our outside independent compensation consultant.

Thank you, Taylor. Having no further questions, back to you, Tom.

Okay. This concludes the meeting. I thank everybody for attending and listening in and hope to be in touch with everybody next year.

Thank you. That concludes our proceeding.

Thank you, Mr. Brady. The meeting is now closed.