Element Fleet Management Corp. (EFN) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Stockholders for the Element Fleet Management Corp. Please note that today's meeting is being recorded. [Operator Instructions] I would now like to hand the conference over to David Colman, Mr. Colman, the floor is yours.

Thank you very much, operator. Good morning. My name is David Colman. I'm the Executive Vice President and General Counsel of Element Fleet Management Corp. I would like to briefly read the forward-looking information statement before turning the meeting over to David Denison, as Chair of the meeting. In the course of today's meeting, directors and officers of the corporation may, in their remarks or in response to questions, make certain statements which are forward-looking statements in our perspective. Forward-looking statements are neither promises nor guarantees, but are subject to risks and uncertainties that may cause the actual results, performance or achievements of the corporation or developments in the corporation's business service industry to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. A more detailed discussion of risk factors affecting Element's business and industry can be found in the corporation's most recent AIS and MD&A. Forward-looking statements are based on management's beliefs and opinions at the time the statements are made, and undue reliance should not be placed on any of these forward-looking statements. There should be no expectation that these forward-looking statements will be updated or supplemented as a result of changing circumstances or otherwise, and other than as required by applicable laws, the corporation disclaims any obligation to do so. We will now proceed with the formal business of the meeting, and I will turn the meeting over to Element's Chair of the Board, David Denison.

Good morning, everyone, and welcome to the 2023 Annual General Meeting of the Shareholders of Element Fleet Management. I am David Denison, Chair of the Board of Element. We're holding this meeting in virtual format as we believe it provides easier access to our widespread shareholder base without the time, cost and environmental impact of travel to attend an in-person meeting. All shareholders have the opportunity to participate, submit questions and vote at this meeting. For efficiency, we request that shareholders, who have specific comments or questions on a formal item of business make such written submissions now, clearly identifying the applicable order -- item of formal business. And during the course of this meeting, at the appropriate time, such submissions will be addressed prior to voting on the applicable motions. Following the formal business of the meeting, we'll have a question-and-answer session. If you have any questions not specifically relating to an item of formal business to be discussed at today's meeting, please feel free to submit those questions at any time during the meeting, and we'll do our best to ensure that such questions are addressed at the conclusion of the meeting. Shareholders can submit questions by clicking on the message icon, typing in and submitting their questions. We'll endeavor to answer all shareholder questions, but if for any reason we're unable to do so during the meeting, we'll follow up with shareholders after the meeting. Before proceeding with the formal business of the meeting, I'd like to take this opportunity to introduce the directors and officers of the corporation, who are joining us today. In addition to myself, the following directors are in attendance, Jay Forbes, Virginia Addicott, Andrew Clarke, Keith Graham, Joan Lamm-Tennant, Rubin McDougal, Arielle Meloul-Wechsler and Andrea Rosen. As announced in January, Jay Forbes is retiring as CEO of Element effective at the conclusion of this meeting and is not standing for reelection to the Board. On behalf of the Board, I want to thank Jay for his immense contribution to Element and the remarkable track record of success he has achieved over the course of his tenure as CEO. We wish Jay all the best for his retirement. And we're also thrilled that Laura Dottori-Attanasio, who joined Element as President in February, will be taking over the role of CEO and is standing for election to the Board today. Laura's proven track record of success in leading complex organizations, coupled with her knowledge and familiarity of Element, ideally positions her to assume the CEO role and further advance our growth strategy. I'd also like to take this opportunity to thank Alex Greene for his service as a Director of Element since 2018. Alex retired in August last year, having provided the company with valuable guidance throughout this transformational period and subsequent pivot to growth. I'd now like to introduce the officers joining us virtually today. In addition to Jay and Laura, also joining us are Frank Ruperto, EVP and Chief Financial Officer; Jim Halliday, EVP and Chief Operating Officer; Jacqui McGillivray, EVP and Chief People and Social Impact Officer; David Madrigal, EVP and Chief Commercial Officer; Chris Gittens, EVP and Chief Digital Officer; Israel Kaufman, EVP and Treasurer; and David Colman, EVP and General Counsel. Now let's proceed to the business at hand. We have 4 matters of formal business to conduct today. First, the presentation of our 2022 financial statements. Second, the election of directors. Third, the appointment of the corporation's auditors. And fourth, consideration of the advisory resolution on the corporation's approach to executive compensation. And once the formal business of the meeting has been completed, the management team will briefly report on the business and financial performance of the corporation for the past year and Element's strategic direction for the future. There will then be an opportunity to ask questions. So I'll now call the meeting to order. I'll preside as Chair of this meeting, and I'll ask David Colman, EVP and General Counsel of Element, to act as Secretary of the meeting. I hereby appoint Computershare Trust Company of Canada to act as scrutineer for the meeting. Computershare is represented by [indiscernible] as a scrutineer. Also in attendance from Computershare is Daniela Munoz. The Secretary has advised me that the requisite materials have been sent to each Director of the corporation, the auditors of the corporation, and each intermediary and registered holder of common shares of the corporation as of March 15, 2023, which is the record date for this meeting. Copies of these materials are also available online on the corporation's SEDAR profile at www.sedar.com. I'll dispense with the reading of the notice of the meeting. The scrutineer has provided me with his preliminary report on attendance at this meeting. With over 85% of Element's common shares represented in person or by proxy, I declare that the requisite quorum of shareholders is present and I declare that the meeting is duly and properly constituted for the transaction of business. I direct that the confirmation of mailing of the notice of the meeting received by Computershare and the scrutineers' complete report on attendance be annexed to the minutes of this meeting. Further, in order to expedite the affairs of the meeting, I have requested that David Colman, Executive Vice President, General Counsel and Corporate Secretary of Element, make the requisite motions during the meeting and we'll dispense with the seconding of motions. Voting at today's meeting will be conducted by online ballot for all matters. If as a registered shareholder or a duly appointed proxy holder, you are using your control number to log into the meeting, and you accept the terms and conditions, you will be provided the opportunity to vote by online ballot. If you've already voted by proxy and you vote again during the online ballot during the meeting, your online votes during the meeting will revoke your previously submitted proxy. If you've already voted by proxy and do not wish to revoke your previously submitted proxy, do not vote again during the online ballot. The polls will be open for all items of business to be voted on at the same time. This will allow you to vote on each item immediately or if you prefer, you may wait until the conclusion of discussion on each item prior to casting your vote. The items of business to be voted on and your available voting options will be visible on the voting panel on your screen. To submit a vote, please click on the voting choice displayed on your screen. Once discussion has concluded on all items of business, we will provide a few additional moments to enter your votes. I'll then declare voting closed on all matters of business. The results of the votes on each matter will be announced prior to the close of the meeting. I now declare the online voting polls open on all items of business. The Secretary has the minutes of the last meeting of the shareholders of the corporation, we'll dispense with the reading of the minutes of such meeting. The first item of business is the presentation of the corporation's consolidated financial statements as at and for the year ended December 31, 2022. And the auditor's report thereon. We'll dispense with the reading of the auditor's report. Our next item of business is the election of directors of the corporation. The Board has fixed the number of directors to be elected at 9. Pursuant to our advanced notice bylaw, there have been no director nominations put forward other than the directors nominated on behalf of management as set out in our management information circular. Accordingly, in the interest of expediency, I'll ask David Colman to make the nominations.

Mr. Chair, I nominate those persons specified in the management information circular delivered with the notice of meeting, namely Virginia Addicott; Andrew Clarke, David Denison, Laura Dottori-Attanasio, Keith Graham, Joan Lamm-Tennant, Rubin McDougal, Arielle Meloul-Wechsler and Andrea Rosen, to serve as directors of the corporation and to hold office until the next Annual Meeting of Shareholders or until their successors are duly appointed or elected in accordance with the articles and bylaws of the corporation. As noted, since there were no prior nominations under advance notice bylaw, I declare the nominations closed.

So I request a motion that the 9 persons nominated as directors of the corporation be so elected.

I am David Colman, and I so move.

Mr. Moderator, can you please advise whether any questions have been received from the participants of this meeting?

There have been no questions.

In accordance with the corporation's majority voting policy, we will have individual voting for directors to be conducted by way of online ballot. As previously noted, if you've already voted by proxy and you vote again through the online ballot during the meeting, your online vote during the meeting will revoke your previously submitted proxy. If you've already voted by proxy and do not wish to revoke your previously submitted proxy, please do not vote again during the online ballot. Registered shareholders and duly appointed proxy holders can choose to vote by online ballot now by selecting the applicable voting options. I'll announce results of the vote at the conclusion of the meeting. We'll now move to the reappointment of auditors. May I have a motion that Ernst & Young LLP be reappointed as auditors of the corporation until the next Annual Meeting of Shareholders or until a successor is appointed and that the Board of Directors be authorized to fix the auditor's remuneration?

I am David Colman and I so move.

Mr. Moderator, can you please advise whether any questions have been received from the participants of this meeting?

There have been no questions.

We'll conduct the vote by way of online ballot and once again, I'll announce results of the vote at the conclusion of the meeting. We'll now move to consideration of the advisory resolution of the corporation's approach to executive compensation. As described in the management information circular, shareholders are asked to approve the resolution on the corporation's approach to executive compensation. This vote is advisory only and nonbinding on the corporation and the Board. However, it will influence how the Board and the Compensation and Corporate Governance Committee look at compensation in the future. And the Board believes that this say-on-pay vote is good governance and allows our shareholders to provide a specific feedback on the corporation's compensation practices. This advisory resolution is set out on Page 12 of the circular. To be approved, the advisory resolution must be passed by a majority of the votes cast at this meeting. May I have a motion that the advisory resolution as set out in the circular be passed as an ordinary resolution of the shareholders of the corporation?