Newell Brands Inc. (NWL) Earnings Call Transcript & Summary

Welcome to the 2020 Annual Meeting for Newell Brands Inc. Our host for today's call is Ravi Saligram, President and CEO. [Operator Instructions] I would now like to turn the call over to your host. Mr. Saligram, you may begin.

Thank you. Good afternoon. I'm Ravi Saligram, President and CEO of Newell Brands. The necessary conditions under our bylaws have been met, and I'm pleased to call the 2020 Annual Meeting of Stockholders to order. This year, we find ourselves in unprecedented times amidst against the COVID-19 pandemic. Through this period, Newell Brands has been focused on 3 key priorities: first, promoting the safety and well-being of our employees; second, sustaining the company's financial vitality and business continuity; and finally, keeping our manufacturing facilities and distribution centers operating where possible. I'd like to acknowledge the efforts of all our Newell Brand employees, particularly the frontline workers who courageously kept the company going these past months. We've changed the format of this meeting to a virtual meeting in the interest of safety, given the various shelter-in-place orders and prohibitions on travel, and I will not be giving a business presentation today. Instead, I refer you to the first quarter earnings call webcast that can be accessed on our Investor Relations website. After the adjournment of the formal business portion of the meeting today, we'll answer questions concerning the matters to be considered at the meeting. I'd like to welcome Pat Campbell, the Chairman of the Board and other members of Newell Board -- Newell Brands' Board of Directors who are in attendance today. Finally, on behalf of the Board of Directors, I'd like to take a moment to recognize Mike Todman, who is retiring from the Board. I'd like to thank Mike for his 13 years of distinguished service to Newell Brands. With that, I'll turn it over to Brad Turner, Chief Legal and Administrative Officer and Corporate Secretary.

Thank you, Ravi. First, I'd like to acknowledge Nadia Alaudini, the representative from our independent registered audit firm, PricewaterhouseCoopers LLP, who is in attendance today. Now to the business of the meeting. The agenda and rules of conduct for today's annual meeting are both viewable on the virtual meeting portal. To conduct an orderly meeting, we ask that all attendees abide by these rooms. The company has received the affidavit of mailing, establishing that notice of this meeting was duly given. Copies of the notice of meeting and affidavit of mailing will be incorporated into the minutes of this meeting. An electronic list of stockholders of record as of the record date is available for inspection by stockholders on the virtual meeting portal. The company's Board of Directors set the close of business on March 16, 2020, as the record date for determining the stockholders entitled to notice of and to vote at this meeting. The Board of Directors has appointed each of myself and Raj Dave as proxies. [ Deborah Baker ] has been appointed as the independent inspector of election. She is in attendance today and her oath of [ office ] has already been taken and will be filled -- and will be filed with the records of the meeting. Voting at this meeting will be submitted via the virtual meeting portal. The independent inspector of election reports the quorum is present for the meeting. The formal business of this meeting is to vote on the following matters, all as described in the proxy statement. All matters will be voted on at the same time through the submission of the online ballot. After adjournment of the formal business portion of the meeting, questions that have been submitted through the online question tool will be answered based on the rules of conduct of the meeting. The time is 3:04 p.m. and I declare that the polls are now open. The first item of business is the election of directors. The number of directors of the corporation has been set at 11 by the Board, pursuant to the bylaws. Eleven directors will be elected at this meeting to serve for a 1-year term and until their successor shall be duly elected and qualified. Each director must receive a majority of votes cast with respect to his or her election. Shares not present, shares not voting and shares of voting abstain will not affect the election of directors. The company's Board of Directors has nominated Bridget Ryan Berman, Patrick D. Campbell, James R. Craigie, Debra A. Crew, Brett M. Icahn, Gerardo I. Lopez, Courtney R. Mather, Ravi K. Saligram, Judith A. Sprieser, Robert A. Steele and Stephen J. Strobel. As described in the proxy statement, the company's restated certificate of incorporation and bylaws, as amended, provide that stockholder nominations for director candidates or other stockholder proposals must be made in writing addressed to the corporate secretary in accordance with certain requirements. No such notice was received for this year's election. The second item of business is the ratification of the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the year 2020. The ratification of the appointment of PricewaterhouseCoopers LLP must receive the affirmative vote of the majority of the shares of common stock present virtually or by proxy and entitled to vote at the meeting. Shares not voting and shares voting abstain will have the effect of a vote against the proposal, and shares not present will have no effect on the proposal. The third item of business is the advisory vote regarding approval of the compensation paid to the company's named executive officers. The advisory vote regarding approval of the compensation paid to the company's named executive officers must receive the affirmative vote of a majority of the shares of common stock present virtually or by proxy and entitled to vote at the meeting. Shares not voting and shares voting abstain will have the effect of a vote against the proposal, and shares not present will have no effect on the proposal. Any stockholder 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 there. Stockholders 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 will now conclude voting on the motion to elect directors, the ratification of the appointment of PricewaterhouseCoopers LLP and the advisory vote on executive compensation. The time is now 3:08 p.m. and I declare that the polls are closed. The independent inspector of election has given us a preliminary report on the voting. I wish to report the results of the vote for the election of directors of the 11 persons who were nominated for a 1-year term: Bridget Ryan Berman, Patrick D. Campbell, James R. Craigie, Debra A. Crew, Brett M. Icahn, Gerardo I. Lopez, Courtney R. Mather, Ravi K. Saligram, Judith A. Sprieser, Robert A. Steele and Stephen J. Strobel. Each director has been elected in accordance with the company's bylaws for a 1-year term expiring in 2021. The ratification of the appointment of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the year 2020 was approved. The advisory vote on the executive compensation paid to the company's named executive officers was approved. The final vote counts will be included in the minutes of this meeting and reported in a current report on Form 8-K. There is no further business to come before this meeting. I would like to thank all of you for your attendance, and the formal business portion of the annual meeting is now over. We will now turn to any stockholders' questions that have been submitted and are within the parameters of the rules of conduct of the meeting. Please note, we will attempt to answer as many questions as time allows but only questions that are germane to the meeting will be addressed. Do we have any questions?

Yes, Brad. We have 2 questions. The first question is as follows. "Mr. Chairman, the carpenter union pension funds with combined assets of $70 billion have a collective ownership position of 396,400 shares of the company's common stock. As long-term investors, we appreciate the company's actions to address employee safety concerns and the difficulties being experienced by customers and other important corporate stakeholders related to the COVID-19 pandemic. The company's recent earnings report indicated that operating margins were off due in part to a $1.5 billion noncash impairment charge recorded in the current quarter. Could you please explain the charge?"

I'll refer this question to Chris Peterson, our CFO.

Thank you, Ravi. And thank you for the question. U.S. GAAP requires that on a periodic basis, we assess the company's value that we have on the balance sheet for goodwill and intangible assets. In the first quarter, we concluded that based on the COVID-19 impact, it constituted a triggering event that caused us to reassess the value of goodwill and intangibles on our balance sheet. And although our results as we reported in the first quarter were very strong in January and February because we saw a pretty significant drop in March and into April as we reported, we did a reassessment of the value of goodwill and intangibles. And in that reassessment, we concluded that the value on the balance sheet needed to be reduced by $1.5 billion, respectively. And so we took a onetime noncash charge in the first quarter associated with that reevaluation, but it was related to the goodwill and intangibles and very much in line with U.S. GAAP accounting requirements.

Thank you, Chris, and thank you for the question. Raj, any second question?

Yes. We have 1 more question and this is the final question that we've received. And that question is, "Would the company consider online access to future annual meetings for those shareholders who could not attend in person?"

Brad, would you like to take this, please?

Sure. Well, certainly, we've gone with an online format this year responsive to particular circumstances. While a live meeting is our preferred format and what we would envision once there's some return to normalcy, we will, of course, consider all circumstances as we look at future annual meetings.

Any other questions, Raj?

No, Ravi. No other questions.

Okay. Okay. If there are no other questions, we will -- on behalf of the Board, I'd like to conclude the meeting. Thank you for your support. Stay safe, onwards and upwards. Thank you.

This now concludes the meeting. Thank you for joining. And have a pleasant day.