KBR, Inc. (KBR) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the virtual Annual Meeting of Stockholders of KBR, Inc. I will now turn the call over to General Lester Lyles, Chairman of the Board.

Good morning, and thank you. I would like to call to order the 2021 Annual Meeting of Stockholders of KBR, Inc. I am General Lester Lyles, Chairman of the Board of KBR, Inc. Thank you all for joining in and calling in this meeting for -- today for this meeting. First, let me start by introducing the other members of our Board of Directors who have also joined us on the call: Mr. Mark Baldwin; Mr. Jim Blackwell; Mr. Stuart Bradie, our CEO; Ms. Lynn Dugle; Lieutenant General, retired, Wendy Masiello; Mr. Jack Moore; Ms. Ann Pickard; and finally, Mr. Umberto della Sala. Also I would like to introduce Mr. Adam Kramer, KBR's Corporate Secretary, who is acting as Secretary of this meeting. Mr. Kramer, please submit proper evidence that notice of this meeting was given to our stockholders.

Thank you, Mr. Chairman. Notice was mailed, commencing on April 5, 2021. An affidavit to that effect will be filed with the records of the meeting. Thank you.

Thank you. Finally, I would like to introduce Mr. Jason Rash and Mr. Trey Weatherford of the accounting firm of KPMG LLP, our independent accountants; and Mr. James Gaughan of Carl T. Hagberg & Associates, who has been appointed inspector of the election of this meeting and has signed the oath of office which will become a part of the records of the meeting. Broadridge has furnished a certificate that holders of more than a majority of the shares of common stock entitled to vote are present in person or by proxy and we therefore have a quorum. That certificate will be placed in the records. As you know, obviously, this is a virtual-only stockholders' meeting. Hopefully, we'll get back to in-person meetings next year. If you are a stockholder as of the record date, you may vote during the meeting today by online ballot. No notice, as required by the company's bylaws; or a stockholder proposal, as required by Rule 14a-8 of the Exchange Act, was received pertaining to additional nominations for election as a director or for other business to be brought at the meeting. Accordingly, only the matters listed in our proxy statement filed with the Securities and Exchange Commission will be entertained at this meeting. It is now 9:03 Central Time on May 19, 2021, and the polls for each matter to be voted on at this meeting are now open. There are 4 items of business for this meeting. The first item of business is to vote upon each of our director nominees named in our proxy statement to serve on the company's Board until the Annual Stockholders' Meeting to be held in 2022 and until their successors have been elected and qualified. The second item is to approve by advisory vote the compensation of the company's named executive officers. Third is to ratify the appointment by the Audit Committee of the Board of Directors of KPMG LLP as the company's independent public accountants for the fiscal year ending 2021. And fourth is to approve the amended and restated KBR, Inc. 2006 stock and incentive plan. We will now proceed to vote upon these proposals. Each common share is entitled to 1 vote on the directors noted above as well as on the other proposals I mentioned previously. I now ask the inspector of elections to canvass the vote. Now I am sure that most of you have already signed and submitted a proxy. If you have voted online or by telephone or submitted a signed proxy in advance of the meeting, your vote on the matters presented here will be cast by the proxy committee in accordance with your instructions and you need not vote now. We will keep the polls open for a short while. I will now pause for a few minutes. [Voting]

Okay, it is now 9:05 Central Time and the polls are declared closed. The inspector has tabulated the votes, and here is a preliminary report on the voting results. For the first item, election of directors. The proposal to elect Mark Baldwin, Stuart Bradie, Lynn Dugle, Lester Lyles, Wendy Masiello, Jack Moore, Ann Pickard and Umberto della Sala to the Board of Directors each received the affirmative vote of more than a majority of the total common shares voted at the meeting, with each of the directors receiving over 90% of the votes cast in their favor. I, therefore, declare that these individuals have been duly elected to the Board. Congratulations. The second item, advisory vote to approve the named executive compensation. The proposal to approve by advisory vote the compensation of the company's named executive officers received the affirmative vote of more than a majority of the total shares present at the meeting in person or by proxy, with over 90% of the votes cast in favor of the proposal. I, therefore, declare this proposal adopted. Third, the ratification of appointment of KPMG. The proposal to ratify KPMG LLP as the company's independent public accountants for the fiscal year 2021 received the affirmative vote of more than a majority of the total shares present at the meeting in person or by proxy, with over 90% of the votes cast in favor of the proposal. I, therefore, declare this proposal adopted. And fourth, approval of the amended and restated KBR, Inc. 2006 stock and incentive plan. The proposal to approve the amended and restated KBR, Inc. 2006 stock and incentive plan received the affirmative vote of more than a majority of the total shares present at the meeting in person or by proxy, with over 90% of the votes cast in favor of the proposal. I, therefore, declare the proposal adopted. The results of votes, including any ballots or proxies recorded during this meeting, will be set forth in the final report of the inspector of election. I ask Mr. Kramer to submit the final report and file it with the records of the meeting.

Yes, Mr. Chairman. The 8 persons whose names are printed on the ballot have been duly elected to serve as directors, and the 3 other proposals on the ballot have all carried. Thank you.

Thank you, Mr. Kramer. The results will also be included in a final report on a Form 8-K to be filed with the Securities and Exchange Commission. Well, all business properly brought before this meeting in accordance with the company's bylaws are now concluded. There being no further business to be brought before the meeting, I hereby declare the 2021 Annual Meeting of Stockholders of KBR, Inc. adjourned. Thank you for joining us. I'm now going to turn the mic over to Mr. Stuart Bradie, our CEO, for any questions that were brought forth for this meeting. Mr. Bradie?

Mr. Bradie, Mr. Chairman, I do have one question from a shareholder, and I'll read that now. With reference to the significant award against the company by the U.K. employment tribunal for discriminatory, unfair dismissal last month, what corrective governance actions have you taken to prevent a reoccurrence of such unlawful and abhorrent treatment of an employee and avert the risk of further damage to the company's reputation? Mr. Bradie?

Thank you, Mr. Kramer. I think the first thing I'd say, that we regret any pain caused in this case, and we obviously respect the court's decision in this matter. And KBR continues to be fully committed to conducting our business honestly and with integrity. And we've conducted a formal independent review following from this to identify lessons learned, and we'll adopt those lessons learned. We remain focused on continually evolving our processes and to create a workplace where our employees feel valued and respected. And we affirm today that we do not tolerate any form, any form, of discrimination. We embrace a culture of continuous improvement, and let me give you an appropriate and recent example. In late 2020, we reviewed, updated and rolled out our corporate and cultural values. I think this was fitting given the substantial changes that had taken place in recent years not only in business mix but importantly in our culture also. And all our processes and procedures are under constant review to ensure they align with these values. So hopefully, that answers this question. Thank you.

Thank you, Mr. Bradie. Seeing no further questions, Mr. Chairman, I ask the meeting call to be adjourned.

Thank you, Mr. Kramer. Thank you, Mr. Bradie. This meeting for -- 2021 shareholders' meeting is now closed. Thank you all for joining us. We look forward to the meeting this time roughly next year, 2022, when hopefully we'll be able to do it in person. Thank you very much for all attending. Thank you.