Parker-Hannifin Corporation (PH) Earnings Call Transcript & Summary

Good morning, everyone to 2023 Annual Meeting of the Shareholders of Parker-Hannifin Corporation will please come to order. I'd like to welcome all of our shareholders who are here in person as well as those listening via the webcast. I am Tom Williams, Executive Chairman of the Board, and I will be presiding at this meeting. Sitting with me is Jenny Parmentier, Chief Executive Officer of the company; and Joe Leonti, Vice President, General Counsel and Secretary of the company. And Joe will be acting as Secretary of this meeting. First, all I can introduce our director nominees and other company representatives that are present at today's meeting. Directors here today are Lee Banks, Vice Chairman and President of the company; and Jill Evanko, Denise Russell Flemming, Lance Fritz, Linda Harty, Kevin Lobo, Jennie Parmentier, Joe Scaminace, Ake Svensson, Laura Thompson, James Verrier, Jim Wainscott and myself. Along with Lee, Jenny, Joe and myself, also present today are Andy Ross, Chief Operating Officer; Todd Leombruno, Executive Vice President and Chief Financial Officer and many other company executives. In addition to our Board and executive team, Richard Kretz represented from Broadridge Financial Service is present, has been appointed to act as inspector of election of this meeting. And Julie Wahrman, a representative from Deloitte & Touche LLP, an independent registered public accounting firm, is also present. Julie will be available to answer appropriate questions concerning the company's financial statements during the question-and-answer period following the meeting. Before we move on to our voting matters, I'd first like to turn it over to Joe to cover a few procedural items.

Okay. Thank you, Tom. So procedural items. First, for those here in person, you are given a copy of today's agenda and the rules of conduct for the meeting. As you can see on the agenda, we're going to first conduct the Annual Meeting of Shareholders. And then after we adjourn that meeting, Tom and Jenny will make some comments and announcements, and then we'll have a brief question-and-answer period. To ensure that we have an orderly meeting, we'll need everybody to abide by the rules of conduct, please. Second thing in my capacity as Secretary, I've delivered and present the following documents, which are all going to be referenced and incorporated into the minutes of the Annual Meeting of Shareholders. As the minutes from the last Annual Meeting of Shareholders, which was held on October 26, 2022, and the financial statements of the company for the fiscal year ended June 30, 2023, which were certified by Deloitte & Touche LLP, have an affidavit of mailing establishing that notice of this 2023 Annual Meeting of Shareholders was duly given. And I have a list of the company's shareholders of record as of September 1, 2023, which has been certified by Equiniti Trust Company, our transfer agent. The third thing is all shareholders of record as of the close of business on September 1, 2023, are entitled to vote at this annual meeting, so we ask that any shareholders who are present and are either still holding proxies or otherwise want to vote at the meeting, please come down and see Mr. Kretz now. Okay. Mr. Kretz has advised that at this meeting there present in person or by proxy at least 115 million shares of Parker common stock. That's a quorum for the transaction of business. It represents over 89% of Parker's issued in outstanding common shares. So at this time, we will move on to our voting matters, and I'll turn it back over to Tom as Chairman.

Thank you, Joe, and I'll present the matters to be voted on. The first proposal to be voted on is the election of directors to serve for terms expiring at the Annual Meeting of Shareholders in 2024. Our Board has nominated and recommends in favor of the following 13 persons for election as directors of our company. Lee Banks, Jill Evanko, Denise Russell Flemming, Lance Fritz; Linda Harty, Kevin Lobo, Jennie Parmentier, Joe Scaminace; Ake Svensson, Laura Thompson, James Verrier, Jim Wainscott and Tom Williams. Second proposal to be voted on is the approval of the compensation of our named executive officers on a nonbinding advisory basis. Our Board of Directors recommends in favor of this proposal. The third proposal to be voted on is the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending June 30, 2024. Our Board of Directors recommends in favor of this proposal. The fourth proposal to be voted on is the approval of the Parker-Hannifin Corporation amended and restated 2023 Omnibus Stock Incentive Plan. Our Board of Directors recommends in favor of this proposal. The fifth proposal be voted on is the approval of the amended and restated Parker-Hannifin Corporation Global Employee Stock Purchase Plan. Our Board of Directors recommends in favor of this proposal. The sixth proposal to be voted on is to advise on a nonbinding advisory basis, the frequency of future advisory shareholder votes on the compensation of our named executive officers. Our Board of Directors recommends every year as the preferred frequency for future advisory shareholder votes on the compensation of our named executive officers. That concludes the items to be voted on today. Are there any questions or discussions on the proposals presented for a vote? Inspector Election will now collect any remaining outstanding ballots or proxy cards. There are none. The votes are now in. I declare the polls closed. Joe, please go ahead and review the preliminary voting results.

Okay. Thank you, Tom. So based on the preliminary voting results, each of our director nominees has been elected. The compensation of our named executive officers has been approved on a nonbinding advisory basis. The appointment of Deloitte & Touche LLP as our independent registered public accounting firm for fiscal year 2024 has been ratified. The Parker-Hannifin Corporation 2023 Omnibus Stock Incentive Plan has been approved. The amended and restated Parker-Hannifin Corporation Global Employee Stock Purchase Plan has been approved, and the option of every year as the preferred frequency for future advisory votes on the compensation of our named executive officers has been approved. Please note that any ballots collected before the polls closed and that aren't reflected in this preliminary report. Those will be reflected in the final report of our Inspector of Election. Final voting results will also be available and disclosed on a Form 8-K that we'll file with the U.S. Securities and Exchange Commission shortly after the votes have been certified by our Inspector of Election.

Thank you, Joe, and no further business to be addressed at this meeting. The annual meeting is now adjourned. Jenny and I would like to make a few additional comments and announcements. First, we have some important organization announcements to make this morning. As we announced last year, I'll be retiring as Executive Chairman from the Board of Directors as of December 31 of this year. I am pleased to announce that today the Board of Directors elected Jenny Parmentier to be Chairman of the Board effective January 1, 2024, with a new title of Chairman of the Board and Chief Executive Officer; Jenny will also continue as a Director on the Board. This will be a continuation of our dual leadership structure, consisting both of the Chairman of the Board and a separate and independent Lead Director, which continues to effectively serve our shareholders. Jim Wainscott will continue as our Lead Independent Director. As I mentioned last year, I've been very fortunate and grateful to lead is a great company and thankful to everyone for the great support that you've given me for so many years. What is very rewarding me and hopefully is very rewarding to all of our stakeholders involved is how well the company is performing under Jenny's leadership. The recent performance has been outstanding. And what's even more exciting is the promising future that lies in front of us. And with that, I'd like to turn over to Jenny for a few more announcements and make a few comments about the business in general.