Resideo Technologies, Inc. (REZI) Earnings Call Transcript & Summary

Good afternoon. I'm Jeannine Lane, Corporate Secretary of Resideo. Welcome to our 2021 Annual Meeting of Shareholders, which is being held virtually by webcast. Before we get started, I'd like to note that some parts of today's presentation contain forward-looking statements. Statements other than historical facts made during this meeting may constitute forward-looking statements and are not guarantees of future performance or results and involve a number of risks and uncertainties. Actual results may differ materially from those in the forward-looking statements as a result of a number of factors, including those described from time to time in Resideo's filings with the Securities and Exchange Commission. The company assumes no obligation to update any such forward-looking statements. It's my pleasure to introduce the Chairman of Resideo's Board of Directors, Roger Fradin.

Thanks, Jeannine. And thank you to everyone joining this virtual shareholder meeting, including members of our Board of Directors, certain members of the executive leadership team and representatives from Deloitte & Touche, our independent registered public accounting firm, who are on the line. I will act as Chairman of the annual meeting, and I will now call the meeting to order. We will answer questions electronically submitted by shareholders about matters on the agenda, any other questions as time permits. We may group questions by topic. And if a question is not of general concern to all shareholders or if a question posed was not otherwise answered during this meeting, you may contact Resideo Investor Relations at [email protected]. I've been advised that the inspector of election has certified that a quorum is present. The meeting and our rules of conduct and procedures for the meeting have been posted to our virtual meeting website. We appreciate your cooperation and adhering to the requirements under our rules of conduct and procedures. The business for this meeting consists of 4 proposals described in the company's proxy statement. I will briefly introduce each proposal, and at this time, declare the polls open for voting on all items. If you've already submitted the proxy, you do not need to vote again. If you would like to vote now during the annual meeting, you may click on the Vote Here link at the bottom of our virtual meeting website and follow the instructions to cast your vote. Our first order of business is the election of 4 Class III directors: Nina Richardson; Andy Teich; Kareem Yusuf; and myself, Roger Fradin, to serve until the 2022 annual meeting of shareholders and until his or her successor is duly elected and qualified. The Board of Directors has recommended a vote for each of the 4 nominees. Proposal #2 is the advisory vote to approve executive compensation. Proposal #3 is the ratification of the appointment of independent registered public accounting firm and the Board of Directors has recommended a vote for each of these proposals. The last proposal, 4, is the shareholder proposal regarding shareholder right to act by written consent is properly presented at this meeting. Ms. Lane will present this proposal as she has been in contact with the proponent, John Chevedden -- with the proponent. Mr. John Chevedden has submitted his proposal, which was included in the proxy statement.

I understand Mr. Chevedden is present to present the proposal. Mr. Chevedden, kindly proceed and present your proposal, limiting your remarks to no more than 3 minutes.

Hello, this is John Chevedden. Can you hear me okay?

Yes. We can, sir.

Proposal 4, adopt a mainstream shareholder right - written consent. Shareholders request that our Board of Directors take such steps as may be necessary to permit written consent by shareholders entitled to cast the minimum number of votes that would be necessary to authorize an action at a meeting at which all shareholders entitled to vote thereon were present and voting. This proposal topic won 79% support at Xerox and 95% support at Dover Corporation. Management suspiciously claims that it is more in favor of a special shareholder meeting at a time that shareholder meetings are losing their impact with the onslaught of online shareholder meetings. For instance, the 2021 Coles Online Annual Meeting was wrapped up in 9 minutes. An example of the dominance and control that management can now exert at an online shareholder meeting is AT&T, which would not even let a shareholder speak at 2 consecutive online shareholder meetings. It also takes 30% of the shares that normally vote at Resideo Technologies Annual Meeting to call for a special shareholder meeting. It would be hopeless to expect that shares that do not even vote would go out of their way and take the added bureaucratic steps to call for a special shareholder meeting. The 30% figure is one of the higher percentages in Corporate America to be required by a company to call for a special shareholder meeting. The resistance of management to this written consent proposal is misplaced because the management is apparently ignorant of the elementary fact that written consent can be structured so that all shareholders get advanced notice of a proposed action. Written consent is super democratic because if a shareholder does not support the written consent topic, the shareholder does not have to do anything, and it accounts as an against vote. This is in contrast to a shareholder meeting where shareholders' support or shareholders' opposition counts for nothing unless a shareholder makes the effort to vote. The shareholders supporting written consent could only accomplish their objective if 60% of the shares that normally vote at an annual meeting give approval. In resisting this proposal management is opposed to listening to the voice of 60% of shares. Now more than ever, shareholders need to have the option to take action outside of a shareholder meeting and send up a -- send a wake-up call to management if need be since tightly controlled online shareholder meetings are a wasteland for shareholder engagement and management transparency. Please vote yes: Adopt a mainstream shareholder right - written consent - Proposal 4.

Thank you, Mr. Chevedden. Mr. Fradin, you can continue the meeting.

Thank you. I remind shareholders that the Board recommends that shareholders vote against this proposal for the reasons that are described in the proxy statement. Jeannine, do we have any questions from shareholders on these proposals?

I will check, Mr. Fradin.

I believe we may have 1 question regarding the management proposal. And the question is, have the metrics for the CEO pay been changed in the last 12 months?

I think the simple answer is no.

And that is the only question. Yes.

Thanks, Jeannine. I now declare the polls closed on all items of business. Based on these preliminary results, I'm able to announce that each director nominee has been elected, and Proposals 2 and 3 have been approved. Proposal 4 has not been approved. The final voting results will be available on a Form 8-K filed with the SEC and on our website when it's available. Jeannine, do we have any other questions from shareholders appropriate for the meeting at this time?

Roger, we have not received any questions to address at this time.

Thanks, Jeannine. And again, thank you to all shareholders who participated today. If there are any outstanding questions or topics that were not answered, please contact Resideo Investor Relations at [email protected]. Thank you. This concludes today's event.