Myers Industries, Inc. (MYE) Earnings Call Transcript & Summary

Good morning, and welcome to the 2021 Annual Meeting of Shareholders of Myers Industries, Inc. I'm Mike McGaugh, President and Chief Executive Officer of Myers Industries, and I will act as Chairman of the meeting. We appreciate the last year has been challenging in light of the COVID-19 pandemic. We remain hopeful with the progress of vaccine, and we'll continue to see declines in the number of cases allowing us to progress towards a return to normal. During this time, we hope that you, our shareholders, are safe and healthy along with your families. With that, I hereby call the meeting to order. Thank you for joining whether here in-person or via the live webcast. Before proceeding with the official business of the meeting, I would like to make a few introductions. In addition to the other members of the company's management and Board of Directors that are participating in the meeting today, Sonal Robinson, the company's Executive Vice President and Chief Financial Officer; and Andrean Horton, our Executive Vice President, Chief Legal Officer and Secretary, are participating. Andrean will serve as the Secretary of this meeting. Also participating are Jerry Rudowsky and Aby Frankovitz, representatives of Ernst & Young LLP, the company's independent registered public accounting firm for the year ended December 31, 2020. I would also like to report that the company has appointed Broadridge Financial Solutions as Inspector of the Election for this meeting. Jon Commers from the Carideo Group is the representative selected by Broadridge to participate in this meeting. The Inspector of Election will count and report the number of shares represented at this meeting based upon his determination of the validity and effective proxies and ballots collected today, and count all votes cast on matters voted on at this meeting, report preliminary results to the company during the meeting and provide final certified results following the meeting. Jon Commers has executed an oath of office and submitted it to the company Secretary for filing with the records of this meeting. To ensure that the meeting proceeds in an efficient and orderly manner, individuals who want to raise questions or comments will be required to follow the rules of conduct provided with the agenda as you join the meeting either here in-person or online. At this time, I invite Andrean to report on the affidavit of mailing and other matters of record for the meeting.

Thank you, Mike. First, on March 26, 2021, written notice of this annual meeting, a proxy statement, a form of proxy and the company's 2020 annual report on Form 10-K, containing the company's consolidated financial statements for the year ended December 31, 2020, were mailed to all shareholders of record as of March 5, 2021. Certified proof of the mailing will be filed with the records of this meeting and our 2020 annual report and 2021 proxy statement are available on the Investor Relations section of our website. Second, Broadridge, as a transfer agent and registrar for the company's common shares, has prepared and certified a list of the shareholders of record at the close of business on the record date of March 5, 2021, which is open for inspection by shareholders during the course of this meeting. I have been advised by the transfer agent that at the close of business on the record date, there were 36,008,505 common shares of the company's outstanding and entitled to vote at this meeting. And third, we have received an affidavit of a representative of Broadridge, showing that beginning on March 26, 2021, copies of the notice, proxy statement, proxy card and annual report were made available to all shareholders of record as of the record date. A copy of the notice of meeting, together with the affidavit of mailing of notice, will be incorporated in the records of this meeting.

The Inspector of Election has taken a preliminary poll of the common shares represented in-person, virtually online or by proxy at this meeting. If any shareholder of record has not yet submitted his or her proxy card, please submit your vote online if participating in the virtual meeting. Andrean, please report on the existence of a quorum.

The Inspector of Election has informed me that they are present at this meeting in-person, virtually online or by proxy, the holders of record of an aggregate of at least a majority of the voting power of the company. This total, in accordance with the amended and restated code of regulations of the company, constitutes a quorum for all purposes.

We now turn to the proposals that have been submitted to our shareholders for their approval. After the proposals have been brought before the meeting, there will be an opportunity for shareholders and proxy holders to discuss the proposals. So please hold any discussion until that time. As set forth in the proxy statement, the first proposal to be acted upon is the election of Directors. As described in the proxy statement, the Board previously nominated 11 candidates to stand for election as Directors at the annual meeting. However, on April 2, 2021, William Sandbrook, one of the Director nominees named in the proxy statement, informed the Chairman of the Board his decision to withdraw his candidacy due to changes in its current professional responsibilities. The company did not nominate a replacement nominee for election. Therefore, the nomination of Mr. Sandbrook was withdrawn and no other nominee for election at the annual meeting was named in place of Mr. Sandbrook. Any votes that are or have been submitted with instruction to the vote for Mr. Sandbrook will be disregarded. Accordingly, the first proposal to be acted upon is to elect the following 10 candidates nominated by the Board of Directors to serve for a 1-year term until the next annual meeting or until their successors are duly elected and qualified: Yvette Dapremont Bright; Sarah R. Coffin; Ronald M. De Feo; William A. Foley; Jeffrey Kramer; Jack Liebau, Jr.; Bruce M. Lisman; Lori Lutey; Michael McGaugh; and Robert A. Stefanko. The second proposal will be acted upon is an amendment to our Articles of Incorporation to adopt a majority voting standard for the election of Directors in uncontested elections. This proposed amendment would add Article 7 Section B to our Articles to establish majority voting for uncontested elections of Directors, beginning with the 2022 annual meeting and would eliminate plurality voting standards and uncontested elections of Directors. As a result, all Director nominees and uncontested elections would be required to receive a number of for votes, representing at least a majority of votes cast in-person or by proxy by the holders of shares entitled to vote at a meeting at which a quorum is present. Our Board believes that requiring Directors to be elected by a majority of votes cast works to ensure that only director nominees broadly accepted among our voting shareholders will be elected and also bolsters the accountability of each elected Director to our shareholders. The third proposal to be acted upon is an amendment to our Articles of Incorporation to adopt a majority voting standard for all matters requiring shareholder approval. This proposed amendment would amend Article 7 of our articles to eliminate certain voting standards that require a 2/3 majority vote for our shareholders for approval on certain matters. The proposed amendment will replace the current voting standard and would require the affirmative vote of the majority of the voting power of the company for all matters requiring shareholder approval. Our Board has considered the trends among other publicly traded companies, best practices in corporate governance and the benefits to our company and its shareholders of adopting a majority voting standard for all matters requiring shareholder approval. The fourth proposal to be acted upon is the adoption of the Myers Industries 2021 Long-Term Incentive Plan. On March 4, 2021, our Board unanimously adopted, subject to approval by our shareholders, the Myers Industries 2021 Incentive Plan. In this Proposal 4, we are asking that our shareholders approved the plan as proposed, including an approval of a reserve of 2 million additional shares of common stock available for the grant of awards under the plan. The fifth proposal to be acted upon is a nonbinding advisory resolution to approve the compensation of the company's named executive officers. Our executive compensation is designed to attract and retain talented and experienced executives and other key employees to ensure that the actual compensation is paid to Executive Officers is aligned and correlated with financial performance and changes in shareholder value, to motivate our executive officers to achieve short and long-term company goals that will increase shareholder value and to reward executives whose knowledge, skills and performance are critical to our success. The sixth proposals to be acted upon is to ratify the appointment of Ernst & Young LLP as the independent registered public accounting firm of Myers Industries for the fiscal year ending December 31, 2021. I will now open the floor for any questions on the proposals in accordance with the rules of conduct set forth for this meeting. Is there any shareholder or proxy holder that wishes to address the meeting regarding the proposals I just described? If there is no further discussion, I declare the polls open for voting on these proposals. If any shareholder wishes to vote virtually online or if any shareholder previously submitted a proxy and now wishes to change their vote online, click on the Vote Here option to vote now. If you've already sent in a proxy, there is no need to cast a ballot, unless you wish to change your vote. The proxy agents will vote your shares as indicated on the proxy you have already submitted. If no direction was made on your proxy card, the proxy agent will vote your shares for each of the proposals as noticed in the proxy statement. Each ballot is to be signed by the shareholder or the proxy agent to assure that all the votes cast here by ballots are properly reflected in the voting totals. After the Inspector of Election completes the final tally, all ballots will be deposited with the Secretary. [Voting]

The Inspector of Election has indicated that no further voting is occurring. So I hereby declare the polls closed. I ask Andrean to report on the preliminary vote totals.

I have been informed by the Inspector of Election that the proxy submitted and ballots voted at this meeting have been tabulated. And based on the preliminary vote totals, the results are as follows: on the matter of the election of Directors, each nominee received the required affirmative vote of a plurality of the common shares present and entitled to vote at this annual meeting. With respect to the amendment to our Articles of Incorporation to adopt a majority voting standard for the election of Directors in uncontested elections, the proposal has been approved. With respect to the amendment to our Articles of Incorporation to adopt a majority voting standard for all matters requiring shareholder approval, the proposal has been approved. With respect to the adoption of the Myers Industries, Inc. 2021 Long-Term Incentive Plan, the proposal has been approved. With respect to the nonbinding advisory vote on the compensation of the company's named executive officers, the proposal has been approved. With respect to the ratification of the appointment of Ernst & Young LLP as the company's independent registered public accounting firm of Myers Industries, Inc. for the fiscal year ending December 31, 2021, the proposal has been approved. The company will publicly announce the final results of voting as promptly as possible after they have been certified by the Inspector of Election.

Thank you, Andrean. There being no more formal business to come before this meeting, I now adjourn this meeting. In closing, I'd like to thank you all for joining this meeting in-person or via the live webcast, and I express my appreciation to all the shareholders who submitted their proxy. I also once again thank our associates for their efforts in 2020 and their commitment to the company's success in 2021. Myers Industries certainly appreciates the continued confidence of our valued customers, our communities and our shareholders. Thank you for your presence today.