Sealed Air Corporation (SEE) Earnings Call Transcript & Summary

Good day and welcome to the Sealed Air Corporation's 2020 Annual Meeting of Stockholders. I would now like to turn the conference over to Jerry Whitaker, Chairman of the Board of Directors of Sealed Air. Please go ahead.

Ladies and gentlemen, good morning. I am Jerry Whitaker, Chairman of the Board of Directors of Sealed Air. On behalf of the Board of Directors, it is my privilege to welcome you to the 2020 Annual Meeting, which we are hosting by live webcast. I hope you and your family are healthy and staying safe during this unprecedented time. I want to acknowledge the contributions that Michael Chu and Pat Duff have made as directors of the corporation. Michael and Pat will be retiring from the Board after this annual meeting, and we will truly miss the knowledge, experience and leadership they brought to Sealed Air over the years. And I personally will miss working with them and the guidance they provided me over the last few years. I would now like to turn the meeting over to Ted Doheny, our President and Chief Executive Officer, who will preside as chair of this meeting. Ted?

Thank you, Jerry. I would like to thank each of you for joining us for our 2020 Annual Meeting. I want to begin by saying that I hope you and your families are staying healthy and safe through this pandemic. Sealed Air had a solid 2019 and is expected to continue to create value for its stockholders as we manage through the COVID-19 crisis and execute on Reinvent SEE. I'll preside over the meeting, and Angel Willis, our Vice President, General Counsel and Secretary, will act as Secretary of the meeting. I intend to complete the formal business of the meeting first. After that, I'll make a few remarks about the current status of the company. Following my comments, I'll be happy to address questions and comments that you may have. You can submit your questions by typing into the box at the bottom of the screen. As presiding officer, I have appointed Victor LaTessa, representative of Broadridge Financial Solutions, to serve as the Inspector of Election for this meeting. There are several formalities to be handled before we move into the business of the meeting, and I would like to ask the Secretary to take care of them at this time. Angel?

Thank you, Ted. The polls are now open for voting on all matters on which the stockholders will vote at this meeting. The inspector of election has already tallied the proxies that he has received. If you have already delivered a proxy to the company, your stock will be voted as you've specified in your proxy. Any stockholder logged into the annual meeting may also vote by clicking the Vote Here button on your screen. The polls will remain open until all of the matters to be voted upon have been presented. I have received an affidavit from Broadridge certifying that commencing on April 9, 2020, our proxy materials and voting instructions for today's meeting were mailed or made available to all stockholders of record at the close of business on March 23, 2020. A complete alphabetical listing of the stockholders of record of the company, who are entitled to vote at this meeting, is available for inspection during the meeting and will be filed with the records of the meeting. The inspector of election has provided us with a preliminary count of the shares present by proxy and at this meeting. That count shows that a quorum is present. The inspector of election will report later in the meeting on the number of shares present by proxy. Ted?

Thank you, Angel. Since a quorum is present, we may proceed with the meeting. We'll proceed first to present and vote on the matters described in the proxy statement. The first matter to be acted upon is the election of directors of the company for the coming year. Michael Chu, the Chair of our Nominating and Corporate Governance Committee, will now introduce this matter. Michael?

Thank you, Ted. At Sealed Air, the entire Board of Directors is elected annually. Each director must be elected by a majority of the votes cast with respect to that director. As provided in the proxy statement, we intend to elect 9 directors at today's meeting.

Thank you, Michael. The next matter to be acted upon at the meeting is the ratification of the appointment of PricewaterhouseCoopers LLP as the company's independent auditor for 2020. Henry Keizer, the Chair of the Audit Committee, will introduce this proposal. Henry?

Thank you, Ted. The Audit Committee's responsibilities include overseeing the annual independent audit of our consolidated financial statements and our internal control over financial reporting. PwC, as an independent registered public accounting firm, reported favorably on the company's 2019 consolidated financial statements and internal control over financial reporting. Representatives of PwC are with us today. The Audit Committee of the Board of Directors recommends that the stockholders ratify the appointment of PwC as the independent auditor of the company for 2020.

Thank you, Henry. The final matter to be acted upon at this meeting is the proposal regarding the advisory vote on executive compensation. Jackie Kosecoff, Chair of our Organization and Compensation Committee, will introduce this proposal. Jackie?

Sorry, Ted. I was on mute. Forgive me all. Under the SEC rules, we are required to seek stockholder approval on an advisory basis of our executive compensation. This approval is not binding upon the company. However, our Board will take the results of such vote into account in determining future compensation of our executives. Our compensation program is intended to provide appropriate and balanced incentives towards achieving our annual and long-term strategic objectives to support a performance-oriented environment based on the attainment of goals and objectives intended to benefit our stockholders, and to create an alignment of interest between our executives and our stockholders. We are asking for stockholder approval on an advisory basis of the compensation of our named executive officers as disclosed in the proxy statement.

Thank you, Jackie. The polls are now closed for voting on the matters before the meeting. Will the inspector of election please give his report?

There are present by proxy at this meeting the holders of 142,138,418 shares of the common stock of the company, representing 91.3% of the voting power of the stock entitled to vote at this meeting. A majority of the votes cast by proxy at the meeting have been cast for the election of each of the director nominees named in the proxy statement. A majority of the votes cast by proxy at the meeting have been cast for the ratification of the appointment of PricewaterhouseCoopers LLP as the independent auditor of the company for the fiscal year ending December 31, 2020, and a majority of the votes cast by proxy at the meeting have been cast for the advisory vote on executive compensation. I will file my formal report with the secretary.

Thank you. Based upon the report of the inspector of election, I declare that all of the proposals have been approved or ratified consistent with the Board's recommendations. The secretary will incorporate the formal report of the inspector of election, including the results of the votes, with the record of this meeting. This concludes the formal business of the meeting. Now I would like to make a few comments about the state of the company. We had a solid finish to 2019, reflecting strong execution of our Reinvent SEE transformation of the business. We delivered strong earnings growth and cash flow with modest sales gains. We are reinventing everything we do from how we innovate to how we solve our customers' toughest challenges. We're doing this by operating as one Sealed Air and building a high-performance culture centered around world-class operational excellence and exceptional customer service. In 2019, we made acquisitions for geographic expansion in digital printing and automated packaging systems, which has brought us new innovations in automation and sustainability. We are confident that our acquisitions, coupled with other core business investments, will accelerate our rate of innovation and drive long-term growth. In 2020, the world is facing unprecedented challenges as COVID-19 became a global health crisis and disrupted our lives and economy. Our purpose, we are in business to protect, to solve critical packaging challenges and to leave our world better than we found it is more powerful now than ever. Our global packaging operations are a critical part of the global supply chain for food, consumer staples and other necessary goods and have been designated by most governments and authorities as critical and essential. Our dedicated people have been working hard to ensure goods are delivered in a timely and safe manner to consumers around the world. I'm proud of our employees for their commitment during this challenging time. Their efforts have been remarkable. Using our 4Ps of Reinvent SEE, performance, people, products, processes and sustainability as our guide, we are working hard to ensure employee safety, maintain business continuity and make Sealed Air stronger when we emerge from this crisis. As the global economy slowly reopens, the actions we take today will accelerate our transformation into the recovery phase. We have prioritized our innovation pipeline while strengthening our partnerships with customers and suppliers. Longer term, we expect that learnings from the pandemic will drive producers to require more automation for efficiency and safety, and consumers around the world will demand packaging formats that maximize safety, minimize waste and are sustainable. Adversity defines us. Our investments in automation and digital technologies will emerge as a differentiator and enable us to become even more critical partner to our customers than we already are today. We're gaining traction in the crisis with our automated systems that are moving us to a touchless digital world for packaging, creating a new normal. I'm confident that our 4Ps of Reinvent SEE and our strategy to deliver the best products at the right price and make them sustainable will deliver exceptional long-term results. We'll now take questions and comments that you would like to raise. Thank you for taking time to attend our 2020 meeting. As there being no further questions, I hereby adjourn the meeting.