HF Sinclair Corporation (DINO) Earnings Call Transcript & Summary

Welcome to the HollyFrontier Corporation 2021 Annual Meeting of Stockholders. I am Vaishali Bhatia, Senior Vice President, General Counsel and Secretary of HollyFrontier Corporation, and I will be serving as secretary of this meeting. The agenda for the meeting is posted on the meeting website. We will conduct the formal business portion of our meeting first and answer questions at the end of the meeting. As a reminder, questions related to this meeting posed by validated stockholders or anyone holding a ballot proxy for this meeting can be submitted via the meeting website during the meeting. We will answer as many questions as time permits during the Q&A portion of the meeting. Responses to questions related to the business in this meeting that we are unable to answer during the meeting will be posted on HollyFrontier's website on the annual report and proxy page under the Financial Information tab. Please note that audio or video recording of this meeting is prohibited. A webcast playback will be available at the meeting website within 24 hours after the completion of the meeting. We have opened the polls at the start of the meeting so that validated stockholders or those holding a ballot proxy for this meeting may vote during the meeting by following the instructions provided and clicking on the voting button on the meeting website. Stockholders who have previously sent in proxies or have voted by mail via the Internet or by telephone and do not want to change their vote do not need to take any further actions. Please note that in the event of a technical malfunction or if there's other problem that disrupts this meeting, our Chairman may adjourn, recess or expedite the meeting or take any action that he determines to be appropriate. In such case, stay connected to this meeting for at least 15 minutes or until instructed otherwise. I would like to introduce our Chairman, Franklin Myers.

Thank you, Vaishali. Thanks, Vaishali. Good morning. In accordance with the notice of annual meeting, it is now 8:30 a.m. Central Daylight Time, and I hereby call the meeting to order. Thank you for attending our meeting today. I would like to introduce HollyFrontier's CEO and President, Mike Jennings.

Thank you, Franklin, and welcome, everyone. Thank you for joining us today for our 2021 Annual Meeting of Stockholders. I would like to thank our Board and members of our management team on the line with us today. I would also like to introduce Scott Hickson and Terry Hosey with Ernst & Young who have joined us for the meeting.

This is Scott Hickson from Ernst & Young. Thank you for having me today.

This is Terry Hosey from Ernst & Young. Thanks for having me.

Thank you, Scott and Terry, and thank you all for joining us. I will now turn the meeting back to Vaishali to run the business of the meeting.

Thanks, Mike. Notice of the annual meeting was duly given on March 25, 2021, in accordance with the company's bylaws, SEC rules and guidance, Delaware laws and recent executive orders. As a reminder, the polls are open on the meeting website and will remain open until the end of our Q&A session. An affidavit has been received from Broadridge Financial Solutions attesting to the notice or mailing to stockholders commencing on March 25, 2021, of the notice of meeting or proxy statement, annual report and proxy card to all stockholders other than those for whom mailing is not required under Delaware law, as shown in the company's stock records at the close of business on the record date. This affidavit will be filed with our corporate records and will be available upon request for inspection after this meeting. The shares represented at this meeting constitute over 90% of all outstanding shares, which constitutes a quorum for the meeting under the company's bylaws. Ms. Chandi Jackson, a representative of Broadridge Financial Solutions has been appointed as judge of election to tally the votes for this meeting. Her oath as judge is being filed with the record of this meeting and will be available upon request for inspection after this meeting. A copy of the minutes of last year's Annual Meeting of Stockholders held May 13, 2020, will be available upon request for review after this meeting. March 15, 2021 was set by resolution of the Board of Directors as the record date for today's annual meeting. All stockholders of record or their proxy holders at the close of business on March 15, 2021 are entitled to participate in this meeting, vote and submit questions. The list of stockholders as of the record date for this meeting is available for inspection by validated stockholders on the meeting website. Each of the matters to be considered today is described in our proxy statement. The purposes of today's Annual Stockholders' Meeting are: first, to elect 10 directors, each to serve until the next Annual Meeting of Stockholders or until his or her resignation, removal or respective successor is qualified and elected. Management's nominees are Anne-Marie Ainsworth, Anna Catalano, Leldon Echols, Manuel Fernandez, Michael Jennings, Craig Knocke, Robert Kostelnik, James Lee, Franklin Myers and Michael Rose. Our second item for consideration is an advisory vote to approve the compensation of the company's named executive officers. The third item for consideration today is the ratification of the selection of Ernst & Young LLP as the company's registered public accounting firm for the 2021 fiscal year. The fourth item for consideration today is a stockholder proposal for simple majority vote submitted by Mr. Kenneth Steiner. In accordance with the company's bylaws, SEC rules and guidance, and Delaware law, his representative, Mr. John Chevedden, will now have an opportunity to present a simple majority vote proposal for consideration of this meeting. Mr. Chevedden will be allowed 4 minutes to make the proposal presentation. Please go ahead, Mr. Chevedden.

This is John Chevedden. Can you hear me okay?

Yes.

This is proposal 4, simple majority vote. Shareholders requested our Board take each step necessary so that each voting requirement in our charter and bylaws that is explicit or implicit due to default to state law that calls for a greater than simple majority vote be replaced by a requirement for a majority of the votes cast for and against such proposal or a simple majority. If necessary, this means the closest standard to a majority of the votes cast for and against such proposals. Shareholders are willing to pay a premium for shares of companies that have excellent corporate governance. Supermajority voting requirements have been found to be 1 of 6 entrenching mechanisms that are negatively related to company performance according to What Matters in Corporate Governance by Lucian Bebchuk of the Harvard Law School. Supermajority requirements are used to block initiatives supported by most shareholders but opposed by a status quo management. This proposal topic won from 74% to 88% support at Weyerhaeuser, Alcoa, Waste Management, Goldman Sachs, FirstEnergy, McGraw-Hill and Macy's. These votes would have been still higher than 74% to 88% if more shareholders had access to objective proxy voting advice. This proposal topic also received an overwhelming 99% support at the 2019 Fortive Annual Meeting. Our current 67% supermajority vote requirement means that the support is needed from 90% of the shares that vote at our annual meeting in order to modernize the governing documents of the company. By assisting our 90% support from modernization, management sends a message that it is focused on living in the past. There should be urgency in reforming our outdated corporate governance giving -- given that our stock was at $75 in 2018. Please vote yes, simple majority vote, proposal 4.

Thank you. We will now pause for a moment to allow voting by any validated stockholders and proxyholders who wish to do so. If you have not already voted, you may vote by following the instructions for voting on the meeting website. We will begin our Q&A session in at least 1 minute. [Voting]

Before we begin our Q&A session, I would like to introduce Rich Voliva, Executive Vice President and CFO; and Craig Biery, Vice President, Investor Relations. Mr. Biery will be reading the stockholder comments or questions related to the business of the meeting that are submitted. We will begin with a few questions that we received in advance of today's meeting.

Our first question is, when was the last time you did share buybacks?

Right. The last open market repurchases of the company stock by the company were performed in the fourth quarter of 2019.

Thank you, Mike. Our next question is, what was the total CEO pay for 2020 and 2019?

Thanks, Craig. And I would encourage you to look at the summary compensation table found in our proxy statements, which are available on the HollyFrontier website. Okay. There being no further questions and now that validated stockholders and proxy holders have had an opportunity to vote, I declare the polls closed at 8:41 a.m. Central Daylight Time. Will the judge of election please tally the votes and submit a preliminary voting report on the stockholder vote? We have been informed by the judge of election that the preliminary vote report shows that the nominees for election to the Board have been duly elected; the compensation of the named executive officers has been approved by advisory vote; the selection of Ernst & Young LLP as the company's registered public accounting firm for the 2021 fiscal year has been ratified; and a stockholder proposal for simple majority vote has been approved. We will report the final vote results in Form 8-K to be filed within 4 business days. There being no further business to come before the meeting, the 2021 Annual Meeting of Stockholders of HollyFrontier Corporation is now adjourned. Thank you for your participation in today's meeting.