Coty Inc. (COTY) Earnings Call Transcript & Summary

Good morning, and welcome to the Coty Inc. Annual Meeting of Stockholders Audio Webcast. [Operator Instructions] Please note that this event is being recorded, and a replay will be available shortly after the meeting concludes. I would now like to turn the conference over to your host, Ms. Kristin Blazewicz, Chief Legal Officer and Secretary of Coty. Please go ahead.

Good morning, ladies and gentlemen. My name is Kristin Blazewicz, and I am the Chief Legal Officer and Secretary of Coty Inc. I will be chairing today's meeting. It is my pleasure to welcome you to Coty Inc. 2021 Annual Stockholders' Meeting. We are hosting this meeting virtually, which is a cost-efficient way for us to reach a greater number of our stockholders and to continue to protect the health of our various constituencies in light of COVID-19. We have designed this live audio webcast to provide the same rights to participate as stockholders would have at an in-person meeting, including the opportunity to submit questions. There will be a general Q&A session held later in the meeting after we adjourn the business portion of the meeting. It is now 8:30 a.m. Eastern Time, and I officially call this meeting to order. First, it is my pleasure to introduce the members of the Coty Board of Directors and to thank them for their service to our company. May I introduce Peter Harf, our Chairman of the Board; Maria Asuncion Aramburuzabala; Beatrice Ballini, who also serves as our Chair of our Remuneration and Nomination Committee; Joachim Creus; Olivier Goudet; Johannes Huth; Sue Nabi who also serves as our Chief Executive Officer; Anna Makanju; Isabelle Parize; Erhard Schoewel; Robert Singer, who also serves as our Lead Independent Director and Chair of our Audit and Finance Committee; and Justine Tan. Nancy Ford is not standing for reelection at this meeting, and we express our gratitude for her service. Coty has appointed a third-party to act as inspector of elections. Christopher J. Woods is with us today and has taken the oath of inspector of election. As noted in the notice and proxy statements sent to you, the record date for voting at this meeting was the close of business on September 10, 2021. Notice of the meeting was provided to all stockholders of record on/or about September 23, 2021, and Broadridge Financial Solutions, Inc. has delivered an affidavit of mailing to show that notice of this meeting was given. A list of stockholders of record entitled to vote at today's meeting is available to stockholders of record on our annual meeting website and is open to inspection. All documents concerning the notice of the meeting will be filed with the records of the meeting. Our stockholder list shows that holders of 816,065,849 shares of Class A common stock of the company are entitled to vote at this meeting. In addition, the holders of 1 million shares of Series B preferred stock of the company are entitled to 125.154133 votes per share for a total of 125,154,133 votes. We are informed by the inspector of elections that they are represented by proxy, 721,333,662 shares of Class A common stock or approximately 88.31% of all shares of Class A common stock entitled to vote at this meeting. And 714,424 shares of Series B preferred stock or 100% of all shares of Series B preferred stock, and together, 87.45% of all 941,219,982 votes entitled to be voted at the meeting. Since this represents more than a majority of the voting power of all issued and outstanding stock entitled to vote on the record date, a quorum is present for purposes of transacting business. We will now present and vote on the 3 proposals listed on the agenda, which are the 3 matters properly brought before today's meeting in accordance with our bylaws. For stockholders who wish to vote at the meeting, you may vote by clicking the vote here button. For stockholders who have already voted, no additional action is required with respect to the matters being voted upon. The polls are now open but will be closed as soon as all the proposals are presented and related questions asked. An opportunity for questions on the proposals will be available after all the proposals have been presented. Stockholders who wish to ask a question may submit a question in writing at any time during this meeting as directed on the annual meeting website. Only stockholders will be permitted to ask questions, and the stockholder must have his or her control number to submit a question on the website. Stockholder questions and comments not relating to an item of business properly brought before the meeting or other matters relating to the company may be raised during the general question-and-answer session. Our rules of Procedure found on the annual meeting website through which you join the meeting will apply to the question-and-answer session. Proposal #1 is the election of directors. There are 12 nominees for Director up for election. Directors elected today will hold office into the 2022 annual stockers meeting or until their successors have been duly elected and qualified. The 12 nominees are Maria Asuncion Aramburuzabala, Beatrice Ballini, Joachim Creus, Olivier Goudet, Peter Harf, Johannes Huth, Anna Makanju, Sue Nabi, Isabelle Parize, Erhard Schoewel, Robert Singer and Justine Tan. Johannes Huth is the nominee designated by the original holder of the Series B preferred stock. As previously disclosed, following the closing on October '20, 2021 of a transaction to redeem a portion of the Series B preferred stock, the original holder of Series B preferred stock is currently entitled to designate one nominee rather than 2 nominees. As a result, Nancy Ford is not standing for reelection, and the size of our Board will be reduced to 12 following this meeting. Any votes cast for Ms. Ford will not be counted. Additional information about the qualifications of each director nominee may be found in the Proposal #1, Election of Directors section of the proxy statement under the heading Director Nominees. The Board unanimously recommends that you vote for the election of each nominee for Director. Proposal #2 is a nonbinding advisory vote to approve the compensation paid to our named executive officers as disclosed in the proxy statement. This proposal, which is commonly referred to as the "say on pay" proposal, is required by the Dodd-Frank Act. Information regarding this proposal is set forth in the proxy statement under the heading Proposal #2, Approval of Advisory Resolution on Named Executive Officer Compensation Say on Pay. The Board unanimously recommends a vote for this proposal. Proposal #3 is the vote on the proposal to ratify the selection by our Audit and Finance Committee of Deloitte & Touche LLP as Coty's independent auditor to audit our consolidated financial statements for the fiscal year ending June 30, 2022. Information regarding this proposal is set forth in the proxy statement under the heading Proposal #3, Ratification of Appointment of Deloitte & Touche LLP as our Independent Registered Public Accounting Firm. And the Board unanimously recommends that you vote for this proposal. Deloitte representatives are available to answer questions during the question-and-answer session near the end of the meeting. We will now take a short pause to allow you to submit your questions related to the proposals. We will now continue. If you still have a question, please submit it, and we will be able to address your question during the Q&A session at the end of the meeting. Management, as a proxy holder, has delivered its ballot to the inspector of elections to vote as directed by the stockholders. There being no other matters to come before the meeting, voting is now completed and the polls for voting are now closed. The inspector of election has confirmed that the ballots have been counted and validated, and we have the preliminary vote totals for the 3 proposals that appeared in the proxy statement. On Proposal #1, relating to the election of directors, preliminary vote counts indicate that all 12 nominees for the election as directors were elected. The size of the full board is now 12 members. On Proposal #2, preliminary vote counts indicates that the proposal concerning a nonbinding advisory vote under named executive officer compensation was approved. On Proposal #3, preliminary vote counts indicate that the ratification of Deloitte & Touche as our independent auditor was approved. We will publicly report the final voting results for all items of business once all votes have been tabulated and verified by the inspector of elections. That concludes the scheduled official business for today's meeting. In accordance with the company's bylaws, I hereby adjourn the business portion of the meeting. We will now take a short pause for you to submit your questions.

We have received one question. The question is, will management allow our employees in the United States to opt out of getting the COVID vaccine by getting a weekly COVID test. And the answer here is that, yes, in the United States currently, our U.S. vaccine and testing policy permits employees to opt out of a vaccine by getting a weekly COVID test. This is, of course, subject to change as developments may occur. We have no further questions. So having concluded the Q&A session, today's meeting is adjourned. On behalf of the Board of Directors and the management team, I would like to sincerely thank you for attending the 2021 Coty Inc. Annual Stockholders Meeting. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.