Lincoln Electric Holdings, Inc. (LECO) Earnings Call Transcript & Summary

I'd like to call the meeting to order. Good morning, and welcome to the 2020 Annual Meeting of Shareholders of Lincoln Electric Holdings, Inc. I'm Chris Mapes, Chairman, President and Chief Executive Officer of Lincoln Electric and Chairman of this meeting. As a part of our precautions regarding COVID-19, we have shareholders attending via the web portal. The first order of business this morning is the introduction of your Board of Directors. All of our directors are on the line and in attendance at this meeting. Your Director nominees standing for election at this year's annual meeting until the 2021 annual meeting are: Curtis E. Espeland, Executive Vice President of Eastman Chemical Company; Patrick P. Goris, Senior Vice President and Chief Financial Officer of Rockwell Automation; Stephen G. Hanks, former President and Chief Executive Officer of Washington Group International; Michael F. Hilton, former President and Chief Executive Officer of Nordson Corporation; G. Russell Lincoln, President of N.A.S.T. Inc.; Kathryn Jo Lincoln, Chairman and Chief Investment Officer of the Lincoln Institute of Land Policy; William E. MacDonald III, former Vice Chairman of National City Corporation; Phillip J. Mason, former President of the Europe, Middle East and Africa Sector of Ecolab; Ben P. Patel, Senior Vice President and Chief Technology Officer of Cooper Tire & Rubber Company; Hellene S. Runtagh, former President and Chief Executive Officer of the Berwind Group; and I am also a nominee. Next, Monte Repasky and Bill Donatone from the Ernst & Young LLP independent registered public accounting firm for the company in 2019 are also on the line. Mr. Repasky does not wish to make a formal statement. We will now proceed with the business part of the meeting. I hereby appoint Broadridge as the Inspector of Elections at this meeting. Amy Pavich is representing Broadridge. Jennifer Ansberry, General Counsel and Secretary of Lincoln Electric will act as Secretary of the meeting. After the proposals are properly presented and put to a vote, the Inspector of Elections will announce the results. At this time, will the Secretary please report on the Affidavit of mailing?

Mr. Chairman, I have the affidavit of distribution from Broadridge Financial Solutions as mailing agent as to the giving of notice of this meeting to shareholders of record as of February 28, 2020, and the mailing of such notice, together with the proxy statement and form of proxy voting form, which mailing commenced on or about March 20, 2020.

Please incorporate the affidavit of distribution together with the related proxy materials into the minutes of the meeting. The Secretary has a list of shareholders of record as of February 28, 2020. The list of shareholders is available for inspection during this meeting by any shareholder. It can be viewed through the website used to access this meeting. The secretary will file a copy of the list of shareholders with the records of the company. Ladies and gentlemen, many of you have already mailed your proxy and voting instruction form or given your voting instructions by telephone or over the Internet, indicating that you intend to have your shares voted by the designated proxies or by the trustee of the company's 401(k) plan. Is the inspector ready to report as to the existence of a quorum?

Mr. Chairman, on February 28, 2020, the record date for this annual meeting, there were outstanding and entitled to vote a total of 60,156,998 common shares. There are present or by valid proxy, holders of at least 53,402,755 common shares or 88% of the total outstanding common shares constituting a quorum.

Thank you. I declare that a quorum is present or represented by proxy. We may proceed with the meeting. It is now 11:04 a.m. Eastern Time on April 22, 2020 and the polls are open. Any shareholder who hasn't yet voted or wishes to change their vote may do so by clicking the voting button on the web portal and following the instructions there. Shareholders who do not want to change their vote do not need to take any further action. The first order of business to come before this meeting is the matters to be voted upon. There were no shareholder questions submitted prior to the meeting. Proposal 1 is the nomination and election of directors. It is the recommendation of the Board of Directors that the following persons be nominated to serve until the 2021 annual meeting. They are Curtis E. Espeland, Patrick P. Goris, Stephen G. Hanks, Michael F. Hilton, G. Russell Lincoln, Kathryn Jo Lincoln, William E. MacDonald III, Phillip J. Mason, Ben P. Patel, Hellene S. Runtagh and I am also a Director nominee. All nominees have been elected previously by the shareholders. Proposal 2 is the ratification of the appointment of the firm Ernst & Young LLP as the independent registered public accounting firm of the company for the fiscal year ending December 31, 2020. Proposal 3 is the advisory vote to approve the compensation of our named executive officers as described in Proposal 3 of the proxy statement. The polls are about to close. So if you've not yet voted, please do so. [Voting]

Now that everyone has had the opportunity to vote, I now declare the polls for the 2020 Lincoln Electric Holdings, Inc. Annual Shareholder Meeting closed at 11:06 a.m. Eastern Time on April 22, 2020. I call upon the Inspector of Elections to please report the preliminary results of the vote on Proposal 1.

Mr. Chairman, the Inspector of Elections reports a majority of votes in favor of each of the Director nominees.

Thank you. I declare that all the aforementioned nominees and I have been duly elected as directors of the company for the term proposed. I call upon the Inspector of Elections to please report the preliminary results of the vote on Proposal 2. Passage requires the affirmative vote of a majority of the common shares present or represented by proxy and entitled to vote on the matter. With the Inspector of Elections, please report the results of voting.

The Inspector of Elections reports that 52,432,602 common shares, representing 98% of the common shares present or represented by proxy and entitled to vote on the matter have been voted in favor of the ratification of the appointment of Ernst & Young LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2020.

The appointment of Ernst & Young has received sufficient votes for ratification, and Ernst & Young will be in charge of our 2020 independent audit. I call upon the Inspector of Elections to please report the preliminary results of the vote on Proposal 3. Approval requires a favorable vote of majority of the common shares present or represented by proxy and entitled to vote on the matter. With the Inspector of Elections, please report the results of voting.

The Inspector of Elections reports that 44,869,537 common shares representing 94% of the common shares present or represented by proxy and entitled to vote on the matter have approved, on an advisory basis, the compensation of our named executive officers.

Thank you. I declare that the compensation of our named executive officers has been duly approved on an advisory basis. We will be reporting the final vote results with the SEC within 4 business days of this meeting. There being no further business to come before the meeting, the 2020 Annual Meeting of Shareholders of Lincoln Electric Holdings, Inc. is now adjourned. Before we conclude the webcast, I would like to make a few closing remarks. First, on behalf of the entire Board, I'd like to thank Vince Petrella for his outstanding leadership as CFO for the last 16-plus years. He has been a valued leader and has been instrumental in bringing best practices to our organizations. Today, Vince is retiring as our Chief Financial Officer. He will continue to work with us as our Executive Vice President to support a smooth transition. With that, I'm also pleased to congratulate Gabe Bruno as our new Chief Financial Officer. I have worked with Gabe for many years, and I have great confidence in his continuing leadership. Finally, I'd also like to thank our employees. During this unprecedented and challenging time, we've continued to operate around the world as an essential business, supporting customers as they support their communities in combating the global pandemic. Seeing our teams in action across the world reminds me how blessed we are for their dedication to the company. I also want to thank our shareholders for your support and assure you of our commitment to executing our higher standard strategy. Please stay safe. Thank you, and have a great day. With that, we conclude the webcast.

The conference has now concluded. Thank you for joining today's presentation. You may now disconnect.