Marriott Vacations Worldwide Corporation (VAC) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and welcome to the Marriott Vacations Worldwide Annual Meeting Conference Call. [Operator Instructions] I would now like to hand the conference to your speaker today, Bill Shaw. Please go ahead, sir.

Good morning and welcome to the 2020 Annual Meeting of Shareholders of Marriott Vacations Worldwide Corporation. I'm Bill Shaw, Chairman of the Board of Marriott Vacations Worldwide. We're doing things a little bit differently this year. For the first time in our history, we're hosting our annual meeting virtually. We elected to make the change out of concern for the health and safety of our shareholders, directors and other annual meeting attendees due to the outbreak of the worldwide COVID-19 pandemic. Our directors are attending this meeting remotely in keeping with social distancing guidelines. It is now my pleasure to introduce Steve Weisz, President and Chief Executive Officer, of Marriott Vacations Worldwide.

Thank you, Bill, and welcome, everyone. Thank you for joining us today. Before we begin, I'd like to acknowledge those who are feeling personal impacts from the coronavirus. Our thoughts are with you as well as those on the front lines of this pandemic. What health care professionals have been doing to help us get us through this is nothing short of heroic. As we join you today, we are facing an unparalleled global crisis, which has had far-reaching impact on our industry and our company. While we have never seen anything of this magnitude, we have seen disruptions to our business, and we have made our way through them. Informed by such experiences, our team of associates is focused on preparing our company to grow and thrive once this crisis passes. I'd now like to turn the meeting back over to Bill Shaw.

Thank you, Steve. At this time, I'd like to introduce the other members of our Board of Directors who are attending today's meeting. In addition to our President and Chief Executive Officer, Steve Weisz, we have with us C.E. Andrews, Lizanne Galbreath, Rip Gellein, Tom Hutchison, Mel Martinez, Bill McCarten, Dianna Morgan and Steve Quazzo. I would now like to turn the meeting back over to Steve Weisz.

Thanks, Bill. I would also like to introduce our executive officers who are joining us today: John Geller, our Chief Financial and Administrative Officer; and Jim Hunter, our General Counsel. We intend to conduct this meeting in accordance with the agenda and rules of conduct, each of which has been posted on our virtual shareholder meeting website. You may also ask business-related questions via the website, which will be addressed immediately following the meeting. Jim Hunter will act as Secretary of this meeting, and he will now begin the business portion by reporting on the mailing of the notice of this meeting to all shareholders and the availability of the shareholders list.

Thank you, Steve. Good morning, everyone. The Board of Directors fixed March 16, 2020, as the record date for determining shareholders entitled to vote at this meeting. An Affidavit has been delivered attesting to the fact that either a notice of Internet availability of the notice of the meeting, the proxy statement and the 2019 annual report to shareholders or the documents themselves were mailed on or about April 4, 2020, to all shareholders as of the record date. We also have available here today an alphabetical list showing all persons who are holders of record of Marriott Vacations Worldwide's common stock at the close of business on the record date. The list has been duly certified by Computershare Trust Company, N.A., the transfer agent of our company's shares. The stockholder list shows that as of the record date, there were 41,027,360 shares of common stock outstanding and entitled to vote at this meeting. Marriott Vacations Worldwide has appointed American Election Services, LLC to act as Inspector of Election. Ray Dunn from American Election Services is joining us by phone today and has taken the oath of Inspector of Election. We are informed by the Inspector of Election that they are represented in person or by proxy, shares representing 38,373,433 votes or approximately 93.53% of the voting power on the record date. Since this represents more than a majority of the voting power of all issued and outstanding shares entitled to vote on the record date, a quorum is present for purposes of transacting business at this meeting. We will now proceed with the matters to be voted upon. The first matter to be voted upon is the election of 3 Class II directors. The nominees for election are: C.E. Andrews, William W. McCarten and William J. Shaw. Our Board has recommended that you vote for each candidate. The second item to be voted on is the ratification of the selection by our Audit Committee of Ernst & Young LLP as our company's independent auditors for the current fiscal year. I am pleased to note the presence today of Ernst & Young. They will be available during the question-and-answer session after the meeting to respond to appropriate questions. Our Board has recommended that you vote for ratification. The third item to be voted on is an advisory vote to approve named executive officer compensation. Our Board has recommended that you vote for this resolution. The fourth item to be voted on is the approval of the Marriott Vacations Worldwide 2020 equity incentive plan. Our Board has recommended that you vote for approval. I will now turn the meeting back to Steve.

Thank you, Jim. It is now 9:06 a.m. Eastern Time on May 12, 2020, and the polls are now open. Any shareholder who hasn't yet voted or wishes to change their vote may do so by clicking on the Voting button on the web portal and following the instructions therein. Shareholders who have sent in proxies or voted via telephone or Internet and do not want to change their vote, do not need to take any further action. We'll now pause for voting. [Voting]

It is now 9:07 a.m., and I now declare the polls for the 2020 Marriott Vacations Worldwide Annual Shareholder Meeting closed. Jim, do we have preliminary voting results?

We do. The 3 nominees for election as Class II directors, Mr. Andrews, Mr. McCarten and Mr. Shaw, received 32,014,990 and 31,746,466 and 31,334,351 votes, respectively, which are the highest 3 votes cast for any candidate. On the motion that the appointment of Ernst & Young LLP as the company's independent auditors for the current fiscal year be ratified, the holders of 37,996,177 shares have voted in favor, 346,393 shares have voted against and 30,863 shares have abstained from voting. On the advisory vote to approve named executive compensation, the holders of 32,322,284 shares have voted in favor, 618,081 shares have voted against and 67,257 shares have abstained from voting. On the motion that shareholders approve the Marriott Vacations Worldwide 2020 equity incentive plan, the holders of 31,467,307 shares have voted in favor, 1,499,533 shares have voted against and 40,782 shares have abstained from voting. We will be reporting the final vote results in a Form 8-K to be filed within 4 business days. I hereby declare that Mr. Andrews, Mr. McCarten and Mr. Shaw have been elected as Class II Directors to serve until the 2023 Annual Meeting of Shareholders or until their successors are duly elected and qualified. The appointment of Ernst & Young LLP as the independent auditors for the current fiscal year has been ratified. The advisory resolution on executive compensation has been approved. And the Marriott Vacations Worldwide 2020 equity incentive plan has been approved. This concludes the business portion of the meeting. At this time, I'd like to turn the meeting back over to Bill Shaw.

Thank you, Jim. Before we adjourn the meeting, I would like to invite everyone who is interested to remain afterwards for the question-and-answer period. The meeting is now adjourned. Thank you for attending.

At this point, we'd be glad to answer any questions you might have regarding the company. We will take shareholder questions that are being entered today on the web portal or have been received in advance of today's meeting. Please note that we will attempt to answer as many questions as time allows, but only questions that are germane to the meeting will be addressed. Any questions that we do not get to will be addressed on our company website.

With that, we've had a couple of questions regarding the steps that we have or will be taking to enhance the sanitation of our facilities and to promote the safety and well-being of our guests and our associates. And the questions have asked for some examples. So first of all, let me tell you, we appreciate those questions. We've developed a multifaceted approach by embracing the guidelines as published by the CDC as well as utilizing valuable input from various partners and professionals that have expertise in implementing industrial strike sanitizing. All of the elements have been incorporated into the 3-phase approach designed to promote the continued safety and well-being of our owners, guests and associates. This enhanced operations program builds on the operational excellence of our resorts through the utilization of world-class products from a portfolio of industry-leading providers, elevated processes to mitigate risk and drive consumer confidence and commitment to our associates with relevant training and resources. The products will utilize medical-grade disinfectants, innovative cleaning tools such as hydrostatic sprayers, broad distribution of hand sanitizing stations, upgrading -- upgraded heating, ventilating and air conditioning filtration, and protective shields in guest contact areas. The processes will encompass enhanced frequency of all public area cleaning, social distancing protocols, limiting outlet -- occupancy levels according to each phase, touchless processes with guest engagement, enhanced villa cleaning procedures developed in partnership with Ecolab, utilizing -- and utilizing single-use disposable materials in each unit that will be replaced after each day, whether they have been utilized or not. Protecting our associates will be accomplished by using personal protective equipment, such as masks and gloves; elevated and monitored personal hygiene and hand washing requirements; enhanced sanitation, training and inspection and workforce monitoring through associate certification that they have not been exposed to the virus; temperature checks each day as they report to work; and immediately must leave work if symptoms develop while on shift and seek medical attention. This is just a high level synopsis of what we are doing as we prepare our resorts to ramp back up for occupancy. Hopefully, this gives you some sense of the level of detail and thoughtfulness that has gone into the development of these approaches to ensure the well-being of our guests and our associates.

So we had a question about proposed new resort locations.

We have a practice of not announcing things until such time as we're in a position to be able to do so. So it'd be inappropriate for me to talk about new locations at this point in time.

We have no additional questions.

Okay. All right. Well, with that in mind, thank you very much for joining us today. We appreciate your continued interest in Marriott Vacations Worldwide. And with that, the call is complete. Thank you very much.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.