Laurentian Bank of Canada (LB) Earnings Call Transcript & Summary

[Foreign Language]

Thank you, François. Ladies and gentlemen, welcome to the Annual Shareholders' Meeting of Laurentian Bank of Canada. My name is Michael Mueller, and I am the Chair the Board of Directors and a candidate for election as Director. This meeting is being recorded and will be made available on our website. Joining us today via webcast are members of the Board and the bank's senior management. I would like to formally introduce my fellow Board members, all standing for election today, Ms. Lise Bastarache, Ms. Sonia Baxendale, Ms. Andrea Bolger, Mr. Michael T. Boychuk, Mr. François Desjardins, Mr. David Morris, Mr. David Mowat, Ms. Michelle R. Savoy, and Ms. Susan Wolburgh Jenah. Also joining us today is Ms. Sivan Fox, Senior Vice President, Legal Affairs and Corporate Secretary. I will now call the meeting to order. I would ask that Ms. Fox act as secretary of the meeting. As in previous meetings, we will first attend to the formal matters which are set out in the notice of meeting: one, the presentation of the financial statements; two, the election of directors; three, the appointment of the bank's external auditor; four, the adoption of a nonbinding advisory resolution concerning the bank's approach to executive officer compensation; and five, consideration of the shareholder proposals. This part will end with a question period for shareholders and the announcement of the voting results. When asking questions, please identify whether the question relates directly to a particular motion or whether it is general in nature. We will address questions that directly relate to a particular motion at the appropriate time of the meeting, and we'll address questions of a general nature after the formal business of the meeting has concluded. For the benefit of everyone participating today, I will ask Ms. Fox or Mr. Desjardins to read aloud any questions or comments that we receive. I should also remind participants that questions and comments should relate to business or affairs of the meeting and should not be personal in nature. At this time, I would invite any shareholders or proxyholders with questions or comments relating to the formal business of the meeting to submit these now by selecting the question icon on their screen and entering their question or comment into the text box. Before we begin, I would like to direct you to the statement on your screen and to highlight that during today's meeting, officers and directors, in their presentations or in answering questions, may make statements which are forward-looking statements for the purposes of applicable securities laws. Forward-looking statements are not assurances of future performance and are subject to risks and uncertainties. The actual results, performance or achievements of the bank and its business may be materially different from the anticipated results, performance or achievements expressed or implied by forward-looking statements. Shareholders should consult a more detailed discussion of these and other risk factors relating to the bank and its business in the bank's 2019 Annual Information Form and in the management discussion and analysis for the first quarter of 2020. I would also like to draw to your attention -- to draw your attention to emerging risks with respect to COVID-19. As you are aware, the outbreak has spread throughout the world, causing companies in various international jurisdictions to impose restrictions such as quarantine, closures, cancellations and travel restrictions. While these measures are expected to be temporary, the duration and impact of the outbreak, its disruption of business internationally and the related financial impacts are unknown and rapidly evolving. The secretary has advised that she has received an affidavit of the transfer agent confirming that the notice of meeting, together with management proxy circular and forms of proxy, have been mailed to each director, auditor and shareholder of record as of the close of business on February 7, 2020. These documents are also posted on SEDAR and on our website. Unless there is an objection, I will dispense with the reading -- with reading the notice of meeting. I would now ask the secretary of the meeting to explain the voting procedure.

Thank you, Mr. Chair. Good morning. To facilitate the conduct of the meeting, we have asked shareholders or proxyholders who are also team members to act as proposers or seconders during the meeting for the formal resolutions. Only registered shareholders and duly appointed proxyholders are entitled to vote. Once the voting has opened, the resolution and voting choices will be displayed on your screen. To submit your vote, simply select your voting choice from the options displayed. Further instructions are available on our website. I would like to remind shareholders that have already voted or sent in their proxy that any vote you cast at the meeting will automatically revoke any proxy you previously submitted. If you do not wish to revoke a previously submitted proxy, you are not required to do anything further and should not vote during the meeting. The results of the votes will be communicated after the question period at the end of the meeting. Thank you.

Thank you, Ms. Fox. Let us now start the formal part of the meeting with the appointment of the scrutineers and the attestation of quorum. With your permission, Ms. Martine Gauthier and Ms. Gale Demick of Computershare Investor Services will be acting as scrutineers at the meeting. The scrutineers have the shareholder list of the bank as of the close of business on February 7, 2020, the record date for determining shareholders eligible to vote at the meeting. A copy of the scrutineers' report on attendance will be attached to the minutes of this meeting. I have been advised by the scrutineers that there is a quorum, and as notice of the meeting has been properly given, I declare this meeting properly constituted for the transaction of business. The first item on the agenda is the presentation of the bank's annual consolidated financial statements for the year ended October 31, 2019, and the auditor's report thereon. Unless there is an objection, I will dispense with the reading of the auditor's report. I will now address any questions or comments that we've received relating to the 2019 financial statements. Mr. Desjardins, have any questions or comments come in?

Mr. Chair, we have received no comments at this time.

Thank you. The next item of business is the election of directors. Following Mr. Lavigne's resignation, the number of directors to be elected at the meeting is 10. The management information circular sent to you listed the bank's director nominees. The election of the directors will be conducted on an individual and not slate basis. The bank has adopted a majority voting policy for the election of directors, and therefore, if any of the directors standing for reelection does not receive the vote of at least a majority of the votes cast at the meeting, such director would be required to promptly tender his or her resignation to the Board, and the Board would determine whether or not to accept such resignation in accordance with the policy. Pursuant to the bank's general bylaws and upon recommendation by the Human Resources and Corporate Governance Committee and the Board of Directors of the bank, the bank's 10 current directors are proposed as nominees. To facilitate the introduction of nominees, I refer you to the slide displayed on your screen now, and we'll read their names. Ms. Lise Bastarache, Ms. Sonia Baxendale, Ms. Andrea Bolger; Mr. Michael T. Boychuk; Mr. François Desjardins; Mr. David Morris, Mr. David Mowat, Mr. Michael Mueller, Ms. Michelle R. Savoy and Ms. Susan Wolburgh Jenna. A motion to elect the directors is now in order.

Mr. Chair, my name is Emmanuela Fleurandin, and I'm a shareholder. I hereby move that each of the 10 proposed nominees be elected as a director to serve until the next annual meeting of shareholders or until his or her respective successor is elected or appointed.

Thank you. Who will second this motion?

My name is [indiscernible], and I second this motion.

Thank you. I will now address any questions or comments that we've received relating to the election of directors. Mr. Desjardins, have any questions or comments come in?

Mr. Chair, we have not received any questions or comments on this item.

Thank you. I now invite the shareholders and proxyholders to submit their vote if they have not already done so. I would like to remind shareholders that have already voted or sent in their proxy, any vote you cast at the meeting will automatically revoke any proxy you previously submitted. If you do not wish to revoke a previously submitted proxy, you should not vote at this time. I will now pause for 20 seconds to allow for voting to be completed. [Voting]

The next item on the agenda is the appointment of the auditor. Upon recommendation by the Audit Committee, the Board of Directors has recommended that Ernst & Young be appointed as auditor of the bank. May I have a motion for the appointment of Ernst & Young as the bank's external auditor until the next annual meeting of shareholders or until a successor is appointed and to authorize the Board of Directors to fix the auditor's remuneration?

My name is Emmanuela Fleurandin, and I'm a shareholder. I hereby move that Ernst & Young be appointed as the bank's auditors until the next annual meeting of shareholders or until a successor is appointed and to authorize their remuneration to be fixed and approved by the Board of Directors of the bank.

Thank you. Who will second this motion?

My name is [indiscernible], and I second this motion.

Thank you. I will now address any questions or comments that we've received relating to the appointment of the auditor. Mr. Desjardins, have any questions or comments come in?

Mr. Chair, we have not received any questions or comments on this item.

Thank you. I now invite shareholders and proxyholders to submit their vote if they have not already done so. I would like to remind shareholders again that have already voted or sent in their proxy, any vote you cast at the meeting will automatically revoke any proxy you previously submitted. If you do not wish to revoke a previously submitted proxy, you should not vote at this time. I will now pause for 20 seconds to allow for voting to be completed. [Voting]

The polls will be closed shortly. The next agenda item is the vote on the nonbinding advisory resolution concerning the bank's approach to executive officer compensation. The wording of this resolution is also set out in the management proxy circular you received. May I have a motion to adopt this resolution?

Mr. Chair, my name is Emmanuela Fleurandin, and I move that the nonbinding advisory resolution concerning the bank's approach to executive officer compensation for which the wording is set out in the circular be approved.

Thank you. Who will second this motion?

My name is [indiscernible], and I second this motion.

Thank you. I will now address any questions or comments that we've received relating to the advisory resolution. Mr. Desjardins, have any questions or comments come in?

Mr. Chair, we have not received any questions or comments at this time.

Thank you. I now invite shareholders and proxyholders to submit their vote if they have not already done so. Again, I would like to remind shareholders that have already voted or sent in their proxy, any vote you cast at the meeting will automatically revoke any proxy you previously submitted. If you do not wish to revoke a previously submitted proxy, you should not vote at this time. I will now pause for 20 seconds to allow for voting to be completed. [Voting]

The polls will be closed shortly. The next items to be put before the meeting are the shareholder proposals. The bank received 7 proposals from MÉDAC. After discussion with representatives of MÉDAC, MÉDAC has agreed that proposal 2, proposal 6 and proposal 7 will not be put to a vote. Mr. Desjardins will read the statement from MÉDAC concerning the withdrawn proposals after we address the shareholder proposals that are to be voted on. The withdrawn proposals and supporting statements as well as the bank's responses were included in the management proxy circular at MÉDAC's request. Proposal 1, equity ratio disclosure; proposal 3, diversity target; proposal 4, creation of a new technology committee; and proposal 5, tendering for auditors will be put to a vote at this meeting. The text of these proposals and the reasons that your Board of Directors is recommending voting against them is set out in Schedule A of the management proxy circular. As a result, and in the interest of time, we will not be revisiting the reasons for the Board's position during the discussion of each proposal, nor will we comment on the statement made by the proponents. François Desjardins will now read aloud the statement provided to us by MÉDAC in connection with the proposals.

[Foreign Language] Mr. Chair, that concludes Mr. Gagnon's comments.

I will now address any questions or comments that we've received relating to the proposals. Mr. Desjardins, have any questions or comments come in?

Mr. Chair, we have not received any questions or comments on the proposals.

Thank you. I now invite shareholders and proxyholders to submit their vote if they have not already done so. Your Board of Directors recommends voting against these proposals. Again, I would like to remind shareholders that have already voted or sent in their proxy, any vote you cast at the meeting will automatically revoke any proxy you previously submitted. If you do not wish to revoke a previously submitted proxy, you should not vote at this time. I will now pause for 20 seconds to allow for voting to be completed. [Voting]

The polls will be closed shortly. François Desjardins will now read aloud the statement supplied by MÉDAC regarding the proposals that were withdrawn.

[Foreign Language] Mr. Chair, that concludes Mr. Gagnon's comments.

Thank you. At this time, I'd like to note that the President and CEO and I have recorded our remarks on the highlights of 2019, which will be available on YouTube and on the bank's website. While the votes are being tallied, we are now open to take questions.

I invite shareholders and duly authorized proxyholders who have not already submitted their questions to do so now. In order to submit a question, select the question icon on your screen, compose your question and select send. Confirmation that your message has been received will appear. I understand that the first question comes from Willie Gagnon from MÉDAC. I will ask François Desjardins to read and respond to the question.

[Foreign Language] Back to you, Mr. Chair.

Have we received any further questions or comments?

Mr. Chair, we have not received any further questions or comments.

Thank you. We will now present the voting results. I understand that the votes have been counted and the preliminary report of the scrutineers has been delivered to the bank. I accept the scrutineers' report and declare the motions for the appointment of the auditor and the approval of the nonbinding advisory resolution concerning the bank's approach to executive officers' compensation duly adopted. I also declare the following persons elected as directors, Lise Bastarache, Sonia Baxendale, Andrea Bolger, Michael T. Boychuk, François Desjardins, David Morris, David Mowat, Michael Mueller, Michelle R. Savoy, Susan Wolburgh Jenah. I declare that proposal 1, equity ratio disclosure; proposal 3, diversity target; proposal 4, creation of a new technology committee; and proposal 5, tendering for auditors, did not receive the majority of votes cast at this meeting. I hereby request that the final report of the scrutineers be attached to the minutes of this meeting. This concludes the meeting. I would like to thank, once again, all shareholders and proxyholders who attended, Board members for their important contributions to the success of the bank, and the executives and team members for their dedication to the performance of the bank and the execution of its strategic plan, particularly in light of the recent unprecedented challenges stemming from the COVID-19 pandemic. Since there are no other matters to come before the meeting, I hereby declare this meeting terminated. I would like to wish all the best to you and your families and hope you stay well and healthy.