Safety Insurance Group, Inc. (SAFT) Earnings Call Transcript & Summary

Hello, everyone, on the phone. This is Chris Whitford, the CFO of Safety Insurance Group. We are gathered for the Annual Meeting of Shareholders and appreciate your time dialing into the call. There will not be an opportunity to ask questions via phone, but we're always happy to answer questions if you want to send them through e-mail to us after the meeting at [email protected]. And with that, I will turn it over to our President and Chief Executive Officer, Mr. George Murphy.

Good morning, ladies and gentlemen. It's now 10:00 a.m. on Wednesday, May 20, 2020. The meeting will please come to order. I am George Murphy, President and Chief Executive Officer of Safety Insurance Group, Inc. On behalf of Safety Insurance Group, I welcome all of you to the 2020 Annual Meeting of Shareholders. Before we go further, I'd like to introduce you to our officers who are present at today's meeting. They are Christopher T. Whitford, Vice President, CFO and Secretary; and James D. Berry, Vice President of Underwriting. Neil Weingarten, representative of PricewaterhouseCoopers LLP, our independent auditors, on the conference call. He is available to respond to appropriate questions. As I -- as stated in the handout that all of you should have received, we will conduct the formal portion of this meeting first. To get started on the official part of this meeting as President and Chief Executive Officer of Safety Insurance Group, I will act as Chairperson of the 2020 Annual Meeting. I hereby appoint Mr. Chris Whitford, Safety's Chief Financial Officer, Vice President and Secretary as the Secretary of this meeting. And now I will ask Chris to take care of certain preliminary formalities. Chris?

I would like to introduce you to Jennifer Borden of Borden Consulting Group. Ms. Borden has been appointed as Inspector of Elections for this meeting. If you've already voted by proxy, your vote will be counted automatically without any further action on your part. As a matter of convenience for the Inspector of Elections, it would be preferable for a shareholder who is present and who has previously given a proxy and does not wish to change his or her vote to allow his or her share to be voted by proxy rather than voting in person. Before acting on the matters stated in this notice of the meeting and proxy statement, I will establish for the record that this meeting is properly convened and that there is a quorum present for the transaction of business. According to the affidavit of distribution dated April 27, 2020, a notice of this annual meeting of shareholders and instructions as how to access the proxy statement, the proxy card and the annual report to shareholders were sent to each shareholder of record as the close of business on March 30, 2020. The notice of this meeting has been duly given in accordance with Safety's bylaws and the proxy statement has been filed with the Securities and Exchange Commission. A copy of the annual report and proxy statement are available in the room. Prior to the commencement of this meeting, Ms. Borden took an oath of office to quickly and honestly execute the duties of Inspector with strict impartiality and to the best of her ability. The affidavit of distribution and the oath of the Inspector of Elections are in my possession and will be filed with the minutes of this meeting. On the record date, there were 15,452,789 shares of Safety's common stock outstanding and entitled to vote at this meeting. The list of shareholders of record entitled to vote was taken from Safety's stock ledgers and has been prepared and certified by Broadridge Financial Solutions. I have been informed by the Inspector of Elections that there are holders of a total of no fewer than 14,434,520 shares of stock present or represented by proxy at this meeting. And as a result, I hereby declare a quorum is present and declare this meeting is duly convened. Mr. Chairman, I believe that all preliminary matters have been concluded.

Thank you, Chris. If there is no objection to the report of the Secretary, it will be accepted. There being no objection, it stands so accepted. We shall now move on to the transaction of business. In addition to certain procedural matters, there are 3 proposals before shareholders. First is the election of 2 of Safety's directors to Class III for the term ending in 2023. The second is the ratification of the employment of PricewaterhouseCoopers LLP as Safety's independent registered public accounting firm for 2020. And the third is an advisory vote on compensation of the named executive officers as disclosed in the company's proxy statement for the 2020 Annual Meeting. In order to make this process as orderly as possible, after a motion has been moved and seconded, I will open the floor to any questions or discussions related only to that motion. We will [indiscernible] questions not directly related to the motion until after the formal portion of the meeting. The first order of business is the election of 2 Class III directors to serve a 3-year term expiring in 2023. May I have a motion?

I move that we elect 2 Class III directors and on behalf of the Board of Directors, I nominate David F. Brussard and Thalia M. Meehan to each serve a 3-year term ending at the 2023 Annual Meeting of Shareholders.

Is there a second?

I second the motion.

Is there any discussion on the motion? The second order of business is the ratification of the appointment of PricewaterhouseCoopers LLP as Safety's independent registered public accounting firm for 2020. May I have a motion?

I move that we ratify the appointment of PricewaterhouseCoopers LLP as Safety's independent registered public accounting firm for 2020.

Is there a second?

I second the motion.

Is there any discussion on the motion? And the third order business is an advisory vote on compensation of the named executive officers as disclosed in the company's proxy statement for the 2020 Annual Meeting. May I have a motion?

I move that we approve compensation of the named executive officers as disclosed in the company's proxy statement for the 2020 annual meeting.

Is there a second?

I second the motion.

Is there any discussion on the motion? Okay. Is the Inspector of Election ready to report on the results of the votes?

Yes. Mr. Chairman, I have received and tabulated the proxies and ballots on the first item identified in the company's notice of annual meeting of shareholders and proxy statement dated April 9, 2020. As of May 20, 2020, at least 11,890,759 shares of Safety's common stock or 76.94% of shares outstanding and 94.13% of shares voted, representing a majority of this vote cast by the shareholders entitled to vote on this and are this meeting in accordance with the bylaws, have been voted in favor of David F. Brussard. Mr. Chairman, I've also received and tabulated the proxies and ballots on the first item identified in the company's notice of annual meeting of shareholders and proxy statement dated April 9, 2020. As of May 20, 2020, at least 12,441,713 shares of Safety's common stock or 80.51% of shares outstanding and 98.5% of shares voted, representing a majority of the votes cast by the shareholders entitled to vote on the matters at this meeting in accordance with the bylaws, have voted in favor of Thalia M. Meehan.

I hereby declare that Mr. Brussard and Ms. Meehan have been elected as Directors of the Safety Insurance Group.

Mr. Chairman, I have also received and tabulated the proxies and ballots on the second item identified in the company's notice of the annual meeting of shareholders and the proxy statement dated April 9, 2020. As of May 20, 2020, at least 14,115,731 shares of Safety's common stock or 91.68% of shares outstanding and 98.09% of shares voted, representing a majority of the votes present or represented and entitled to vote on this matter at this meeting in accordance with the bylaws, have been voted in favor of ratifying the appointment of PricewaterhouseCoopers as Safety's independent registered public accounting firm for 2020.

Thank you. I hereby declare that the appointment of PricewaterhouseCoopers LLP as Safety's independent registered public accounting firm for 2020 has been ratified.

Mr. Chairman, I also received and tabulated the proxies and ballots on the third item identified in the company's notice of annual meeting of shareholders and proxy statement dated April 9, 2020. As of May 20, 2020 at least 12,519,006 shares of Safety's common stock or 81.01% of shares outstanding and 99.11% of shares voted, representing a majority of the votes present or represented and entitled vote on this matter at this meeting, have been voted in favor of approving on an advisory basis, the compensation of the named executive officers as disclosed in the company's proxy statement for the 2020 Annual Meeting.

Thank you. I hereby declare that the compensation of the named executive officers as disclosed in the company's proxy statement for the 2020 Annual Meeting has been approved on advisory basis. Is there any further business to come before the meeting? If there is no other business, I will entertain a motion to adjourn.

So moved.

Is there a second?

I second the motion.

Unless there is an objection, I intend to handle the motion to adjourn by voice vote. All those in favor, please say, yes. [Voting]

Those opposed, please say no. [Voting]

The motion is carried. I declare the formal part of the meeting adjourned. Thank you all for attending and those on the phone who were dialed in. That concludes the shareholders meeting today and thank you, everyone, for participating.