Newmark Group, Inc. (NMRK) Earnings Call Transcript & Summary

Good morning, and welcome to Newmark Group, Inc.'s 2021 Stockholders' Meeting. At this time, I would like to turn the call over to Mr. Barry Gosin, Chief Executive Officer of Newmark. Please go ahead, Mr. Gosin.

Good morning, and welcome to Newmark Group, Inc.'s 2021 Annual Stockholders' Meeting. I am Barry Gosin, Chief Executive Officer of Newmark. On behalf of our entire board, our officers and employees, I would like to thank you for attending our annual meeting of stockholders. The virtual nature of this annual meeting enables increased stockholder accessibility and promote social distancing, all while improving meeting efficiency and reducing costs. At this time, I would like to announce that the polls are now open. Any stockholder who haven'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. I would now like to introduce to you the Newmark Independent Directors, all of whom have joined us for this call. Virginia Bauer, Kenneth McIntyre and Michael Snow. Also with us today is Howard Lutnick, our Chairman; Mike Rispoli, our Chief Financial Officer; Jeff Day, our Chief Strategy Officer; Lou Alvarado, our Chief Revenue Officer; and our Attorneys, Stephen Merkel, our Chief Legal Officer; and Caroline Koster, our Chief Counsel for Securities & Corporate Governance and our Corporate Secretary. Also on the call are Chris Jensen, who is with our outside counsel, Morgan Lewis & Bockius; and David Stollow, Todd Valenti and Jerry Gruner of EY, our Independent Auditors. We'd like to open the meeting with official business. I will be serving as the Chair of this meeting. After the formal meeting has been adjourned, we will provide time for general questions. Validated stockholders may ask questions in the question field on the web portal. Please make sure to type your name along with your question. We will attempt to answer as many questions as time allows, but only relevant questions will be addressed. Please note that while this meeting is being recorded by the company and an audio replay will be available on our Investor Relations website, no one attending via the webcast or telephone is permitted to use any audio recording device. I'd like to thank you all for joining us today and for your continued support of Newmark. With that said, I now call this virtual meeting to order, and I appoint Caroline Koster, Newmark's Corporate Secretary to act as Secretary of the Meeting. The Chair recognizes Ms. Koster.

Good morning, and thank you, Mr. Gosin. I have received the Affidavit of Broadridge Financial Solutions, Inc., attesting to the mailing on November 5, 2021, of the notice of Internet availability of proxy materials relating to this meeting to the holders of record of the company's Class A common stock and Class B common stock as of the date -- as of the close of business on October 18, 2021, which is the record date for this meeting. I've also received from American Stock Transfer & Trust Company, the company's transfer agent, with certifying the names, addresses and stock ownership of the holders of record of the company's Class A and Class B common stock at the close of business on the record date. At this time, I would like to introduce Mr. Peter Descovich. He's a Corporate Representative of Broadridge Financial Solutions, who is qualified to serve as the Inspector of Elections, and who delivered the inspectors of earlier this morning.

Please file the affidavit, the oath, the notice and the other documents with the minutes of the meeting and file the list of stockholders with the records of the company. In addition, I hereby appoint Peter Descovich to act as the Inspector of Elections.

At this point, the online polls are now closed, and I will now report the preliminary results of the voting. First, we will determine whether a quorum is present. The Inspector of Elections has advised me that they were present in-person or represented by proxy the holders of at least 139,185,906 shares of the Class A common stock of Newmark out of a total of 190,891,277 outstanding shares of the Class A common stock, each of which is entitled to one vote per share and 21,285,533 shares of the Class B common stock, each of which is entitled to 10 votes per share, which represents all of the Class B common stock outstanding as of the record date. These shares represent adequate voting power, and a quorum is present for purposes of the transacting business.

Thank you. Please file any proxies and any substitution of proxies submitted via the virtual meeting portal with the records of the company.

The first order of business is the election of directors. The Board of Directors has previously nominated Howard W. Lutnick, Michael Snow, Virginia S. Bauer and Kenneth A. McIntyre as Directors of the Company, each for a term expiring at the 2022 annual meeting of stockholders. The Board of Directors of the company has recommended that stockholders vote in favor of the proposal to elect each of the nominees. I have been advised by the Inspector of Elections that the stockholders represented at the meeting have cast at least 288,1,640 votes for each of Ms. Bauer and Mr. Lutnick, Snow and McIntyre for the election of each as a director of the company. This is at least the plurality and the majority of the total voting power of the shares of common stock present in-person or by a proxy and entitled to vote, and all nominees have been re-elected.

Congratulations to each of you.

The second order of business today is the ratification of the appointment of EY as our independent registered public accounting firm for the fiscal year ending December 31, 2021. The Board of Directors and the Audit Committee of the company have recommended that the stockholders vote in favor of the ratification of the appointment of EY. I have been advised by the Inspector of Elections that the stockholders represented at the meeting have cast at least 347,983,829 votes in favor of the ratification of the appointment of EY as our independent registered public accounting firm for the fiscal year ending December 31, 2021, which is at least the majority of the total voting power of the shares of common stock present in-person or by proxy and entitled to vote.

The vote on the ratification of our independent registered public accounting firm is noted.

The third order of our business today is the advisory vote by the stockholders on executive compensation. The Board of Directors and the Compensation Committee of the company have recommended that the stockholders vote in favor of the compensation paid to the company's named executive officers as disclosed in the company's proxy statement for the 2021 annual meeting of stockholders, which includes the compensation, discussion and analysis, compensation tables and narratives. I've been advised by the Inspector of Elections that the stockholders represented at the meeting have cast at least 238,724,766 votes in favor of the compensation paid to the company's named executive officers, which is at least the majority of the total voting power of the shares of common stock present in-person or by proxy and entitled to vote.

The advisory vote on executive compensation is noted.

The final tabulations of the votes on these matters will appear in Newmark's Form 8-K to be filed with the Securities and Exchange Commission.

If there is no further business to come before the meeting, the meeting shall be adjourned. Thank you for your participation and your support of Newmark. We will now address stockholder questions relating to the meeting that are answered today on the web portal. Though we may not be able to answer every question, we will do our best to provide a response to as many as possible, and we may be able to post responses to some generally applicable questions later today in the Investor Relations portion of our website.

Thank you, Mr. Gosin. Before we begin, and while any questions are entered, I would like to remind the attendees that the information regarding our business delivered during this question-and-answer period may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934, also as amended. These may include statements about the effects of the COVID-19 pandemic on the company's business results, financial position, liquidity and its outlook. Any forward-looking statements involve risks and uncertainties. And except as required by law, Newmark undertakes no obligation to update any forward-looking statements. Any outlook and targets discussed during this question-and-answer period assume no material acquisitions or buybacks, extraordinary transactions or meaningful changes to the company's stock prices. For a discussion of additional risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see Newmark's Securities and Exchange Commission filings, included but not limited to, risk factors and a special note regarding forward-looking information set forth in these filings and any updates in subsequent filings. Any references to financial results, which are provided in response to questions will be on an adjusted earnings basis, unless otherwise noted. We may also refer to adjusted EBITDA. Please see Newmark's financial results press release dated November 5, 2021 for GAAP results. And please also see certain sections of that press release referring to outlook, non-GAAP financial measures, adjusted earnings defined, reconciliation of GAAP and other non-GAAP measures and other sections related to these topics, including any footnotes for the complete and updated definitions of these non-GAAP terms and how and when management uses them as well as for the differences between results under GAAP and non-GAAP for the periods discussed. Unless otherwise stated, whenever we refer to income statement items such as pre-tax earnings, post-tax earnings, we're doing so on an adjusted earnings basis. I'm now happy to turn the meeting back over to Mr. Gosin to answer your questions.

I will now ask Jason McGruder, Head of Investor Relations, to read any applicable questions from the web portal and management will respond.

Let's just give it 30 seconds and see if we get any and then I'll let you know. It appears as though we don't have any questions. For those listening, you can use the tab feature if you want, I guess. 5,4,3,2,1, yes, no questions.

Well, thank you all for attending the annual meeting of Newmark Group, Inc. We thank you for your support of Newmark.

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