Credit Acceptance Corporation (CACC) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Stockholders of Credit Acceptance Corporation. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn today's meeting over to Charles Pearce, Secretary. Mr. Pearce, the floor is yours.

Thank you. Good morning, and welcome to the Credit Acceptance Corporation 2020 Annual Shareholders Meeting. My name is Charles Pearce, and I am the company Secretary. Because of the continuing public health concerns relating to COVID-19, we are holding this year's annual meeting in a virtual-only format by live audio webcast. During the meeting today, the company and persons acting on its behalf, may make forward-looking statements as defined under federal securities law. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control and which could cause the company's actual results to differ materially from such statements. Please see the risk factors and forward-looking statements sections in the company's most recent Form 10-Q filed with the SEC on May 27, 2020, along with the Risk Factors section of the company's annual report on Form 10-K filed with the SEC on February 11, 2020. At this time, I would like to introduce Brett Roberts, the company's Chief Executive Officer and a member of the company's Board of Directors, who is joining by audio connection and will preside at today's meeting as Chairperson of the meeting.

Thank you, Charlie. Good morning. It is now 8:02 Eastern Time, and I call the meeting to order. At this time, I'd like to turn the meeting over to Mr. Pearce, who's acting as the Secretary for the meeting.

Thank you. I will now introduce the company's independent directors who are participating today by audio connection. Mr. Thomas Tryforos, our Lead Director; Mr. Scott Vassalluzzo; and Ms. Glenda Flanagan. Also in attendance by audio connection is Jim Trouba, the lead client service partner of Grant Thornton, the company's independent registered public accounting firm. The company's 2019 annual report contains a letter from our CEO, Mr. Roberts. This letter provides a comprehensive overview of the company's 2019 performance, along with some important historical information. Shareholders were provided access to a copy of the annual report prior to today. In lieu of restated the information contained in Mr. Roberts' shareholder letter, we will proceed directly to the business matters of this meeting following the agenda posted in the virtual meeting center. As set forth in the agenda, following the formal business portion of this meeting, members of management, including Mr. Roberts and Mr. Trouba of Grant Thorton, will respond to questions relating to the company's business. [Operator Instructions] This meeting is being held pursuant to the Notice of Meeting that was included in the notice of Internet availability of proxy materials mailed on or about June 4, 2020, to each shareholder of record of the company's common stock on May 21, 2020, which was the record date for this meeting. In addition, a notice of change of location of annual meeting of shareholders was mailed on or about July 2, 2020, to such shareholders of record. Computershare, the company's transfer agent, has submitted an affidavit evidencing the mailing of these notices as stated. The following documents in connection with this meeting are available in the virtual meeting center. The rules of conduct and procedures, the proxy statement, together with the Notice of Meeting, the company's 2019 annual report, the notice of change of location of annual meeting, and a list of shareholders entitled to vote at this meeting. The shareholder list is available for inspection only by shareholders and proxy holders who have logged into the virtual meeting center using a control number and is not available to anyone accessing the virtual meeting as a guest. These meetings and all -- these materials and all other documents concerning the call and notice of 2020 annual meeting will be filed with the minutes of this meeting. Jade Larimore of Computershare has been appointed inspector of election of the meeting and will tabulate the final vote on matters coming before the meeting. The preliminary report of the inspector of election on the shareholders present, in-person or by proxy, indicates that holders of a majority of the company's shares of common stock issued and outstanding on the record date and entitled to vote at this meeting are present in-person or by proxy. On the basis of the preliminary report of the inspector of election, I declare a quorum present. Accordingly, this meeting may proceed with the conduct of its business. The purpose for which this meeting is being held, is: Number one, the election of 4 directors named in the proxy statement, each to serve until 2021 annual meeting of shareholders and until his or her successor has been elected and qualified; number two, an advisory vote to approve named Executive Officer compensation; number three, ratification of the selection of Grant Thorton LLP as the company's independent registered public accounting firm for 2020; and to transaction any such business that may be properly brought before this meeting. I declare that the polls for voting on all matters are now open. If you have previously voted by proxy and do not want to change your vote, it is not necessary to vote at this time. If you have not voted, or if you wish to change your previously cast vote, please do so by clicking on the cast-your-vote button in the virtual meeting center and follow the directions. Please remember that if you have already voted by proxy, it is not necessary to vote again. Your submission of a new vote will revoke all prior proxies. After shareholders have had an opportunity to vote, the Chairperson of the meeting will announce the closing of the polls, and the inspector of election will provide her preliminary report. We'll move now to review the items of business. The election of directors. Ms. Flanagan, Mr. Roberts, Mr. Tryforos and Mr. Vassalluzzo are the nominees for Director named in the proxy statement for election for a term expiring at the next annual meeting in 2021 and until his or her successor has been elected and qualified. There being no further nominations, I declare that the nominations are closed. The Board of Directors recommends a vote for each of the nominees named in the proxy statement. Item 2, the advisory vote to approve named Executive Officer compensation as disclosed in the compensation discussion and analysis within company's compensation tables and the related narrative disclosure contained in the company's proxy statement for the 2020 annual meeting of shareholders. Pursuant to SEC rules, we are including this proposal as set forth in the proxy statement to enable our shareholders to vote on an advisory basis on the compensation of our named executive officers. This vote is not intended to address any specific item of compensation, but rather the overall compensation of our named executive officers and the compensation philosophy, policies and practices described in the statements. The Board of Directors recommends a vote for the proposal to approve the compensation of the named executive officers. The third item, ratification of the selection of Credit Acceptance's independent registered public accounting firm for 2020 Grant Thorton LLP. They have been selected by the Board as the company's independent registered public accounting firm for 2020. The Board of Directors recommends a vote for ratifying the selection of Grant Thornton as the company's independent registered public accounting firm for 2020. There is no other business properly before this meeting. We will now take a moment to address shareholder questions regarding the matters of business today. We will address other questions relating to the company's business later in the meeting. As there are no questions on matters of business, we will pause for a moment to allow shareholders to complete their voting before the chairperson of the meeting announces the closing of the polls. [Voting]