Dana Incorporated (DAN) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to Dana Incorporated's 2020 Annual Meeting of Shareholders. I would like to introduce you to Mr. James Kamsickas, Chairman of the Board and CEO of Dana Incorporated. Please go ahead.

Good morning, ladies and gentlemen. It's my pleasure to welcome all of you to this morning's Dana's 2020 Annual Meeting of Shareholders. Joining me in the virtual meeting today are Doug Liedberg, Senior Vice President, General Counsel and Secretary of Dana, who will act as Secretary of the Meeting; and Jonathan Collins, who is Executive Vice President and Chief Financial Officer of Dana. I would also like to recognize our directors who are all present today on the virtual meeting. They are Keith E. Wandell, lead independent Director; Rachel A. Gonzalez; Virginia A. Kamsky; Bridget E. Karlin; Raymond E. Mabus, Jr.; Michael J. Mack Jr.; R. Bruce McDonald; and Diarmuid B. OConnell. A representative of PwC, our independent auditor, is also present today in the meeting. In accordance with the Notice of the Meeting, the 2020 Annual Meeting of Shareholders of Dana Incorporated is called to order. I will now turn the meeting over to Doug to begin the formal business of the meeting.

Thank you, Jim. For our virtual shareholder meeting today, we will be utilizing a well-documented set of procedures to ensure our shareholders have the opportunity to participate as they would at an in-person meeting. The meeting rules and agenda are available on the meeting website. Shareholders wishing to vote their shares during this meeting may do so from now, through the closing of the polls by logging into the meeting website as a shareholder and clicking the "vote here" button on their screen. If you have previously voted by proxy and do not wish to change your vote, no further action is required today. After the formal meeting is adjourned, we will answer questions submitted during the meeting. Shareholders wishing to ask a question will be able to submit questions by typing them into the text box on the meeting website through the end of the Q&A session. A representative of Broadridge, our Inspector of Elections has confirmed that the count of shares present prior to the meeting indicated that 91.4% of the shares have issued and outstanding voting stock are present by proxy, which represents a quorum to commence the meeting. As I mentioned, the polls are now open for voting. We will close the polls after the shareholder proposal has been presented. [Voting]

The meeting will follow the order of business on the agenda on the meeting website. The first proposal for today's meeting is the election of 9 directors to hold office for a term of 1 year until the 2021 Annual Meeting of Shareholders or until the election and qualification of their successors. The 9 nominees are: Rachel A. Gonzalez, James K. Kamsickas, Virginia A. Kamsky, Bridget E. Karlin, Raymond E. Mabus, Jr., Michael J. Mack Jr., R. Bruce McDonald, Diarmuid B. OConnell and Keith E. Wandell. The second proposal is to act upon a nonbinding advisory resolution with respect to executive compensation. The third proposal is to ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2020. One shareholder, John Chevedden, has provided notice to present a proposal that may be considered at this meeting. Operator, would you please open the line for Ms. Franklin, a representative appearing for Mr. Chevedden.

I do not see her line in the call, sir.

Okay. As no representative of the shareholder is present to present the proposal, there will be no vote on this proposal today. This is in accordance with SEC Rule 14a-8, which requires the shareholder making the proposal or its qualified representative to present the proposal. This concludes the presentation and proposals submitted for your vote at today's meeting. The polls are now closed. We will now announce the voting results for each of the proposals presented at today's meeting. The results are based on the preliminary certificate of the Inspector of Election, which was provided at the beginning of this meeting. The final certificate of the Inspector of Election will be filed with and reflected in the minutes of this meeting. For the first proposal, regarding the election of directors, the results are that at least 95.4% of the shares entitled to vote on the matter were in favor of the election of each director nominee. Therefore, each of the nominees is elected until his or her representative -- respective rather successor has been elected and qualified. For the second proposal, to approve the nonbinding advisory vote on executive compensation, the results are that approximately 94.9% of the shares entitled to vote on the matter were voted in favor of the proposal, and therefore, the proposal has been approved. For the third proposal, the ratification of the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2020, the results are that approximately 97.4% of the shares entitled to vote on the matter were voted in favor, and therefore, the proposal has been ratified. That concludes my remarks. Over to you, Jim.

Okay. Thank you, Doug. This concludes the business portion of our meeting. The formal meeting is hereby adjourned. We will now answer questions from shareholders received through the meeting website.

Okay. Jim, we have one question. The question is, if the Board has considered the adoption of a majority vote standard?

I would answer the question very directly. We appreciate that question, your investment in Dana and your support of the Board of Directors. We believe our current governance policies as it relates to director elections are appropriate, but appreciate your perspective, and we will take it under advisement.

Thank you. We have another question that's come in regarding our expectations for how we will rebound and restart the operations. And I will also mention that this question will be something we may be covering later on our earnings call next week. So we'll follow-up with these forward-looking questions after we report our earnings.

Yes. I would just remind the shareholders that our earnings call is next Thursday at 10:00 a.m., and we'll be covering quite a bit of that data during that call.

Thank you. And the last question we have in is, asking the Board if they see the growing ownership concentration amongst large shareholders as a positive or negative development in terms of corporate planning and performance. So the question, I believe, is that we have a number of large shareholders and is that a concern? Or is that a benefit for Dana?

I will answer it again. This is Jim. As it relates to our top shareholders, we believe that stewardship of their ownership stakes are appropriate and appreciate the support that they provide.

Excellent. And we have one other question and this is possibly for Jonathan Collins, our CFO. Jonathan, can you just say something about our liquidity position?

Sure, Craig. We just publicly disclosed within the last week or 2 that we ended the first quarter or at the end of March with about $650 million of cash on hand, that included a $300 million draw on our revolver. And in addition to that, we still have nearly $680 million available under the revolver. And we also announced that we put in an incremental liquidity facility, a 364-day bridge facility, which would provide an additional $500 million of liquidity. That happened at the end of the quarter, and we'll certainly provide more color on our thoughts about the business moving forward and our liquidity position on our call next week that Jim highlighted.

Thank you, Jonathan. And Jim, we have one final question in. The question is, has the executive team cut their compensation during this time of some unprecedented disruption?

I would thank the shareholder for the question as well as all the other questions. And the answer is, yes. There has been across the board. So recompensation reduction starting at 20%, up to the Chief Executive Officer and Chairman, myself, that is, it was 50%.

Thank you, Jim. And that's all the questions we have.

Okay. On that note, thank you very much for attending the meeting and for your questions and your attendance, and we look forward to talking to you again in the future likely after the earnings call next Thursday, again, at 10:00 a.m. Eastern Standard Time. Thank you very much.