Republic Services, Inc. (RSG) Earnings Call Transcript & Summary

Welcome to the 2021 annual meeting of Republic Services, Inc. shareholders. I would now like to introduce the first presenter, Don Slager.

Good morning. I'm Don Slager, CEO of Republic Services. Welcome to our 2021 Annual Meeting of Shareholders. I'm also a member of our Board of Directors, and I will be acting as the Chairman of this meeting. Due to the COVID-19 pandemic and related travel concerns, we are holding this year's annual meeting through this virtual format to give our shareholders the opportunity to safely engage with us and participate in this meeting. Joining me today are Catharine Ellingsen, the company's Chief Legal Officer and Corporate Secretary; and Jon Vander Ark, the company's President and incoming CEO. Also joining us by phone is Ernst & Young, our independent registered public accounting firm. They will be available during the question-and-answer session to respond to appropriate questions. Finally, the company has appointed Broadridge Financial Services to act as inspector of elections. Andrew Wilcox from Broadridge is joining us by phone, and has taken the oath of inspector of elections. Catharine Ellingsen will be acting as secretary of this meeting. Before we commence the formal portion of the meeting, I'm going to turn it over to Catharine for her to review a few housekeeping matters. Catharine?

Thanks, Don. It is now shortly after 10:30 a.m. Pacific Time on May 21, 2021, and this meeting is officially called to order. First, if you are a shareholder of Republic Services and wish to submit a question, you may do so during the meeting by typing the question into the box at the bottom right-hand side of the screen. To do so, you must have logged in using your unique control ID number. After we provide an overview of the items of business being considered at this meeting, we will seek to answer submitted questions that relate only to the items of business. If you have any questions related to Republic Services, but not specifically related to the items of business covered at the meeting, you may reach out to our Investor Relations team at [email protected], and those questions will be answered in a timely manner. Second, if you are a shareholder of Republic Services, logged in using your unique control ID number, you may also vote your shares during that meeting -- during the meeting by clicking on the Voting button on the bottom right-hand side of the screen. If you have already voted your shares, there is no need to vote again during today's meeting, unless you'd like to change your vote. Finally, we'd like to note that this meeting is being recorded. However, no one attending via webcast or telephone is permitted to use any recording device. It is now short -- the agenda for the meeting should be visible in the center of your screen and a link to the rules of conduct is available by clicking the Materials button on the bottom right side of your screen. We intend to strictly follow the agenda and the rules of conduct in carrying out the business of this meeting. The Board of Directors fixed March 22, 2021, as the record date for determining the shareholders entitled to vote at this meeting. I have been provided with an affidavit from Broadridge Financial Services establishing that notice of this meeting was duly provided to shareholders in accordance with our bylaws. There were 318,998,900 shares of common stock of the company outstanding and entitled to vote as of the record date. Our inspector of election has informed us that there are 293,066,693 shares of common stock of the company, representing 91.87% of the outstanding shares present in person or represented by proxy. Accordingly, a quorum is present for purposes of transacting business.

Great. The polls are now open. I will present the matters to be voted on in today's meeting. There are proposals on the ballot. All of these proposals were described in the company's proxy statement dated April 6, 2021. Proposal 1 is the election of directors. The current Board has nominated the following 11 directors to hold office until the 2022 Annual Meeting of Shareholders or until their successors are duly elected and qualified. Manuel Kadre, Tomago Collins, Michael A. Duffy, Thomas W. Handley, Jennifer M. Kirk, Michael Larson, Kim S. Pegula, James P. Snee, Brian S. Tyler, Sandra M. Volpe and Katharine M. Weymouth. Proposal 2 is the advisory vote to approve the compensation of our named executive officers described in the proxy statement. This is a nonbinding vote, although the Board and the Compensation Committee will certainly take the vote results into account when making future compensation decisions. And Proposal 3 is the ratification of Ernst & Young as our independent registered public accounting firm for the fiscal year ending December 31, 2021. Our Board recommends voting in favor for Proposals 1 through 3. Proposal 4 is a shareholder proposal regarding the integration of Environmental, Social and Governance metrics into executive compensation. Our Board recommends a vote against this proposal. Because a representative of the shareholder that submitted the proposal, the International Brotherhood of Teamsters General Fund, is not in attendance at the meeting, that proposal will not be put forth for a shareholder vote. Let the record reflect that the other 3 proposals are deemed submitted to the shareholders. Jon and Catharine will now open the floor for any questions or comments on any of the proposals following the rules of conduct for this meeting. Jon?

Thank you, Don. Shareholders may submit their questions through the web portal. As a reminder, we will seek to answer questions that relate only to the items of business previously outlined. This question-and-answer session will be limited to 10 minutes. And if we're unable to answer all relevant questions during this time, we will post responses to the unanswered questions on our Investor Relations website. If you have any questions related to Republic Services, but not specifically related to the items of business for this meeting, you may submit them to our Investor Relations team at [email protected], and those questions will be answered in a timely manner. Catharine, have we received any questions related to the business of the meeting?

Yes, we have. I will read the first question. Republic states that it has a generous COVID time off and leave benefit. Implementation has varied by location, with some locations giving time off with no drawdown of employee PTO, and others not. When will the corporate directive be uniformly followed?

The safety and well-being of our employees remained and continues to remain our top priority during the pandemic. The company took swift and comprehensive action to help protect our employees and communities during the pandemic. We have been providing employees with an extra 10 days of paid time off if they or a household member were diagnosed with or required to quarantine due to exposure to COVID-19. We spent millions of dollars on additional PPE, including masks, sanitizer and cleaning supplies across all facilities, regularly deep cleaned our fleet and facilities, implemented social distancing guidelines and provided educational resources on virus prevention. At the height of the pandemic, we provided a minimum hour guarantee for eligible employees to maintain their employment. We waived insurance copayments and deductibles related to COVID-19 expenses and limited on-site work to critical roles only to protect all employees. We launched our Committed to Serve initiative. Through Committed to Serve, we directed over $30 million to recognize the contributions of our 20,000 frontline employees.

Before we take further questions, we understand that a representative from the International Brotherhood of Teamsters General Fund is now on the line to present their proposal, so that we will open up the line to that representative to make such presentation.

Hello. I'm Dan Willett with the International Brotherhood of Teamsters. Can you hear me?

Yes. Thank you.

Okay. Good morning, good afternoon. I'm here to present Proposal #4 and ask shareholders to support it. Thank you very much.

Thank you, Dan. We appreciate your comments today. Do we have any other questions before the meeting today, Catharine?

No, we have not received any additional questions.

Okay. We'll give it a second here. All right. There being no further questions, the polls are about to close. Any shareholder who hasn't yet voted or wishes to change their vote, may do so by clicking the Voting button on the web portal and following the instructions on the screen. Shareholders who have sent in proxies are voted via telephone or Internet and do not want to change their vote, do not need to take any further action. We'll pause and wait for any of that voting to take place. [Voting]

Now that everyone has had the opportunity to vote, I now declare the polls for the 2021 Republic Services, Inc. Annual Shareholder Meeting closed. Catharine, do you have their preliminary vote results?

We do. We have been informed by the inspector of elections that the preliminary vote report shows that each of the 11 director nominees has been elected; the compensation of the company's named executive officers has been approved by advisory vote; the appointment of Ernst & Young has been ratified as the company's independent registered public accounting firm for 2021; and the shareholder proposal on integrating ESG metrics into executive compensation was not approved. We will be reporting the final vote results in a Form 8-K to be filed within 4 business days.

Thank you, Catharine, and thank you, Jon. There being no further business to come before the meeting, the 2021 Annual Meeting of Shareholders of Republic Service, Inc. is now adjourned.