Expedia Group, Inc. (EXPE) Earnings Call Transcript & Summary

Good morning and welcome to Expedia Group Inc.'s 2021 Annual Stockholders' Meeting. Today's meeting is being recorded. At this time, I would like to turn proceedings over to Mr. Barry Diller, Chairman and Senior Executive of Expedia Group. Please go ahead, sir.

Thank you very much. Good morning, everyone. We have time at the end for any questions that are submitted by any stockholders after the meeting. But first, we have a lot of little items to go through, and I'm turning the proceedings over to Bob Dzielak, who is our -- Expedia Group's Chief Legal Officer, and he will go through the formal part of the meeting. Bob?

Thank you, Mr. Diller. Good morning, everyone. I would like to officially call this meeting to order. Before we move to the business before us today, I would like to introduce a few additional individuals. First, we have Mr. Carideo from Broadridge, who is the inspector of election. From Expedia Group, we have Peter Kern, Vice Chairman and CEO; Eric Hart, CFO; and Pat Thompson, Head of Investor Relations. And finally, we have Erica Su and Matthew Taggart from Ernst & Young, our independent registered public accounting firm. Expedia Group stockholders who may vote on the matters presented at this meeting are stockholders of record at the close of business on April 12, 2021. Stockholders of the company have been voting since we mailed the company's notice of meeting, proxy statement and proxy card on or about April 26, 2021. If you have already cast your votes, then your votes have been tallied and you need not vote again today. If you're entitled to vote and wish to revoke a previously submitted proxy or cast your vote during the meeting, you may do so online now until the polls are closed. The record will show that we have received a report from Mr. Carideo certifying that sufficient shares of the company's outstanding capital stock and of the outstanding voting power are represented at this meeting to constitute a quorum for the items of business to be voted on. A quorum is accordingly present, and we may proceed with the transaction of business stated in the notice of meeting. This year, there are 4 items on the agenda. Item number one is a proposal to elect directors. As you may have seen in our recent 8-K filings, David Sambur and Jon Gieselman have resigned from Expedia Group's Board of Directors. Therefore, although Mr. Sambur and Mr. Gieselman were listed as nominees for election to the Board in our proxy materials, they are no longer standing for reelection and are not included on today's ballot and no votes previously cast for them will be counted. On May 24, 2021, the Board acted to reduce the size of the Board of Directors from 14 to 12. Therefore, today shareholders will vote on a proposal to elect 12 directors. 8 of the nominees will be voted upon collectively by the holders of Expedia Group's common stock and Class B common stock. They are Samuel Altman, Susan Athey, Chelsea Clinton, Barry Diller, Peter Kern, Dara Khosrowshahi, Greg Mondre and Alex von Furstenberg. The remaining 4 nominees will be voted upon by the holders of Expedia Group common stocks only. They are Beverly Anderson, Craig Jacobson, Patricia Menendez Cambo and Julie Whalen. For all nominees, the affirmative vote of a plurality of the total number of votes cast is required for approval. Items 2 through 4 will be voted upon collectively by the holders of all Expedia Group voting securities voting together as a single class. And in each case, approval requires the affirmative vote of a majority of the voting power of the shares present and entitled to vote. Second proposal is to approve the 2013 employee stock purchase plan as amended and restated and the 2013 international employee stock purchase plan as amended and restated, including an increase in the number of shares authorized under the plans, collectively by 1 million shares, among other amendments. The third proposal is to ratify the appointment of Ernst & Young as the company's independent registered public accounting firm for the year ending December 31, 2021. The last item on the agenda for consideration is a stockholder proposal being brought by Friends Fiduciary Corporation. This stockholder proposal is being presented by Amy Carr on behalf of Friends Fiduciary. The full text of the proposal is set forth on Page 33 of this year's proxy statement. Ms. Carr, I would ask that you please present your proposal at this time.

Hello, fellow shareholders and members of the Board. My name is Amy Carr. I am a shareholder advocate at Friends Fiduciary Corporation. We are long-term shareholders of Expedia. I hereby move proposal 4, asking our company to provide a report on its direct and indirect contributions made to influence the outcome of elections at the federal, state and local level. As long-term shareholders of Expedia, we support transparency and accountability and corporate electoral spending. Our proposal asks the company to disclose all its electoral spending, including payments to trade associations and other tax-exempt organizations, which may be used for electoral purposes. Expedia publicly discloses a policy on corporate political spending. However, the policy of decision as it lacks disclosure on direct contributions to candidates, parties and committees; direct contributions to 527 organizations; payments to trade associations that the recipient organization may use for election-related purposes; and payments to influence the outcome of ballot measures. Of particular concern is membership in and payments to trade associations and 501(c)(4) social welfare groups. Corporate payments to these groups have no restrictions. This means that companies can give unlimited amounts to third-party groups that spend millions on lobbying and often undisclosed grassroots activity. Shareholders do not know our company's process for evaluating any misalignment of the company's policy position with the positions of trade associations and 501(c)(4) social welfare nonprofit that it contributes to. Those misalignments can pose significant reputational risk. Proxy adviser, ISS, supports this proposal, noting that shareholders could benefit from additional information regarding the company's political expenditures and trade association activities. The company's Board and shareholders need comprehensive disclosure to fully evaluate the use of corporate assets in elections and any risks that spending can pose. The company could easily and inexpensively provide this information. We urge shareowners to vote for proposal 4. Thank you.

Thank you, Ms. Carr. The Board of Directors has recommended a vote against this stockholder proposal for the reasons set out fully in the proxy statement. The proposals for this meeting have been presented. I now declare the polls closed. Before the meeting, Mr. Carideo informed me of the results based on proxies already received and tabulated. And based on those preliminary voting results and pursuant to Delaware General Corporation Law and the company's certificate of incorporation and bylaws, the 12 director nominees have been elected; the 2013 employee stock purchase plan as amended and restated and the 2013 international employee stock purchase plan as amended and restated have been approved; the appointment of Ernst & Young as the company's independent registered public accounting firm for 2021 has been ratified; and the stockholder proposal regarding reporting on political contributions and expenditures has not passed as a majority of the shares present at today's meeting have not been cast for the proposal. We will report the final voting results in a Form 8-K, which will be filed with the Securities and Exchange Commission within 4 business days. With no other business to conduct at this meeting, I declare the meeting adjourned. We have not received any stockholder questions and therefore, we will conclude today's proceedings. Thank you.