Grocery Outlet Holding Corp. (GO) Earnings Call Transcript & Summary

Good afternoon, and welcome to the 2021 Annual Meeting. I would like to pass it off to the first presenter, Erik Ragatz, Chairman of the Board of Directors. Erik?

Thank you, and I will say good morning from California to start. I want to welcome you all to the 2021 Annual Meeting of the stockholders of Grocery Outlet Holding Corp. and call this meeting to order. I am Erik Ragatz, Chairman of the Board of Grocery Outlet. In accordance with our bylaws, I will be acting as Chairman of this meeting. Along with my fellow members of the Board, and the executive officers of the company, I would like to thank you for your attendance, your interest and most importantly, your support of Grocery Outlet. As you are aware, due to the public health impact of COVID-19 and to protect everyone's health and well-being, we are holding this meeting virtually. [Operator Instructions] The Annual Meeting of the stockholders is held pursuant to the bylaws of the company and written noticed to all stockholders. [Operator Instructions] Stockholders wishing to ask other questions will be given an opportunity to do so at the end of the meeting. Please note that the rules of conduct and the procedures for the meeting are posted on the virtual meeting website. With that, I would now like to introduce Eric Lindberg, Chief Executive Officer of Grocery Outlet, who will introduce our Board members and certain other members of the management team who have joined us today. After introducing the directors and officers in attendance and dealing with a few procedural matters, we will take up the items to be acted upon.

Thanks, Erik, and thank you all on the line for dialing in today. I'd like to introduce you to and welcome each of the Board members that are present today in the meeting. With that, we have Erik Ragatz, Chairman of the Board and Chairman of the Nominating and Corporate Governance Committee. MacGregor Read, Vice Chairman of the Board; Ken Alterman, Chairman of our Compensation Committee; Jeb Bachman, Chairman of our Audit and Risk Committee; Mary Kay Haben; Tom Herman; Carey Jaros; Nor Matthews; Maria Fernanda Mejia; Gail Moody-Byrd; Jeff York; and I am Eric Lindberg, CEO of the business. I also like to introduce you to a few other members of our executive management team present today, RJ Sheedy, our President; Charles Bracher, our CFO; Pam Burke, our CAO, Chief Administrative Officer and General Counsel and Secretary; Joe Pelland, our VP of Investor Relations; and Lindsay Gray, our VP and Corporate Controller. Ms. Burke will act as Secretary of the meeting for us today. In addition, I'm pleased to welcome James Bodner, a representative of Deloitte & Touche, our independent registered public accounting firm. Mr. Bodner is available to respond to appropriate questions during the general question-and-answer period. I'll now turn the meeting back over to Erik Ragatz to introduce our inspector of the election.

Thank you, Eric. It's my pleasure now to introduce Mr. Lou Larson, representing Broadridge Financial Solutions, who has been appointed by the Board to act as inspector of elections for this meeting. He has previously taken his oath of office as inspector of elections. Lou is now standing up, which you cannot see. With that, let me turn it over to Ms. Burke, acting as Secretary, who will please report on the proof of notice of meeting.

Thanks, Erik. I have an affidavit of mailing from Broadridge Financial Solutions, certifying that notice of this meeting was duly given and that Broadridge commenced distributing such notice to stockholders on April 23, 2021. I also have a copy of the company's annual report for fiscal year 2020, which includes financial statements audited by Deloitte. A copy of this annual report was sent or made available to each stockholder entitled to vote at this meeting and an electronic copy of the annual report is available on the website used to access this meeting. The notice of meeting and the affidavit of mailing together with the attachments thereto, the annual report and the oath of the inspector of elections will be filed with the minutes of this meeting. Now back to you, Erik.

Thank you, Pam. The Secretary has the list of holders of record of the common stock of the company at the close of business on April 12, 2021, which was the record date set by the Board. This list of stockholders has been open for examination by any stockholder for any purpose to remain to the annual meeting for a period of 10 days prior to this meeting by contacting our Investor Relations department. This list has been available for inspection at the headquarters during the last 10 days and is available upon request. The Secretary will please file a copy of the list of stockholders with the records of the company. With that, let me turn to the report of quorum. Ms. Burke, will you please present the report of attendance at this meeting so we can determine whether a quorum is present?

Mr. Chairman on April 12, 2021, the record date for the annual meeting, there were outstanding and entitled to vote a total of 95,551,903 shares of common stock have been informed by the inspector of election that a majority of the shares of stock entitled to vote at this annual meeting are represented by proxy. The shares so represented exceed 95% of the total shares entitled to vote at this meeting and therefore, constitute a quorum.

Excellent. Thank you, Pam. On the basis of the report of the Secretary and the inspector of election, I find that proper notice has been given and that a quorum is present. Accordingly, this meeting has been duly convened. And with that, we will turn to the opening of the polls. It is 11:07 Pacific Time on June 7, 2021, and the polls for voting on all matters are open. All Grocery Outlet registered stockholders entitled to vote at this meeting have the ability to do so online by clicking the voting button on the website used to access this meeting. If you are a registered stockholder entitled to vote and have not yet voted or if you want to change your previously cast vote, please do so via the website. If you are a beneficial stockholder, that as you hold your shares through a bank, broker or other intermediary, you have received materials with voting instructions. Please remember that if you've already voted by proxy, it is not necessary to vote again. After voting has been completed on all matters on the agenda, we will close the polls, and the inspector of election will provide his preliminary report. So with that, we will now move on to a view of the 3 proposals. The first proposal to come before the meeting is the election of directors. At this meeting, we will be electing 4 Class II directors to hold office until our 2024 annual meeting of stockholders. If elected, these directors shall serve until their successors have been duly elected and qualified or until any such director's early resignation or removal. The nominees for Director are: Mary K. Haben; Gail Moody-Byrd; MacGregor Read; and Jeff York. The Board has recommended you to vote in favor of each of the nominees. The 4 nominees receiving the highest number of votes at this meeting will be elected. Information concerning these nominees and other matters, which may be of interest are contained in the company's proxy statement. No other nominations were received prior to the deadline established in the company's bylaws. Therefore, no additional nominations may be made at this meeting, and I declare the nominations to be closed. Are there any questions or comments on the first proposal? If so, please submit them through the portal. I'm being told there are no questions that have been submitted. So with that, we will move on to the second proposal. The next matter to come before the meeting is the ratification of the appointment of Deloitte & Touche as the company's independent registered public accounting firm for the fiscal year ending January 1, 2022. The Board recommends that you approve the appointment of Deloitte to serve as the company's independent registered public accounting firm and to audit the company's financial statements for the fiscal year ending January 1, 2022. Are there any questions or comments on this proposal? Again, if so, please submit them through the portal. Seeing none, I'll move on to the third proposal. Proposal 3 asked stockholders to approve a nonbinding advisory resolution on the fiscal year 2020 compensation of the company's named executive officers, all as described in the proxy statement. The Board recommends the stockholders vote in favor of the approval of the compensation of the company's named executive officers. This proposal is advisory, although nonbinding, the vote will provide information to our compensation committee and our Board of Directors regarding investor sentiment about our executive compensation philosophy, policies and practices, which our compensation committee and our Board of Directors will be able to consider when making future executive compensation decisions. Again, let me pause for questions or comments on this proposal, which should come through the website. Hearing none, seeing none. This will conclude the presentation of our proposals at this meeting. And with that, I will turn it back over to Ms. Burke.

Okay. The polls are about to close. So if you are a registered stockholder and have not yet voted, please do so. [Voting]

Since everyone has now had the opportunity to vote. It is now 11:11 a.m. Pacific Time, and the polls are closed. The inspector of election has delivered his preliminary report, and I will now announce the preliminary results. Mr. Chairman, based on the inspector of election's preliminary report, on the first proposal, the 4 nominees receiving the highest number of votes cast in favor of the election are now, in alphabetical order, Ms. Haben, Ms. Moody-Byrd, Mr. Read, and Mr. York. As a result, each of these individuals has been reelected as a Class II Director of the company to hold office until our 2024 annual meeting of stockholders. On the second proposal, more than 99% of the votes cast were in favor of the ratification of the appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm for the 2021 fiscal year, and therefore, the appointment has been ratified. And on the third proposal, the resolution on an advisory basis for the compensation of our named executive officers for the fiscal 2020 year received approval for more than 87% of the votes cast and has been approved. We will file the final report of the inspector of election with the records of this meeting. We expect to report the results of the voting on a Form 8-K to be filed with the SEC within 4 business days of this meeting. And now back to you, Erik, for adjournment and questions.

Great. Thank you, Pam. That concludes the business for the meeting. It is now 11:13 a.m. Pacific Time, and the meeting is now officially adjourned. We would like to invite you to ask any questions you may have regarding the company and its business at this time. Again, please follow the instructions provided on the virtual meeting screen to submit questions and be mindful of the rules of conduct, especially regarding the time limit. No questions. Well, with that, ladies and gentlemen, thank you for attending today's meeting, and thank you for the support of the company over the years. We will look forward to speaking with you again in the coming future.