Sonos, Inc. (SONO) Earnings Call Transcript & Summary

Welcome to Sonos, Inc. 2021 Annual Meeting of Stockholders. I'll now turn the call over to your host, Eddie Lazarus, General Counsel and Corporate Security (sic) [ Secretary ].

Good morning, and welcome to the Sonos 2021 Annual Meeting. My name is Eddie Lazarus, and I am the General Counsel and Corporate Secretary of Sonos. And I'll serve as the chairperson of the meeting. I will also serve as the secretary of this meeting and keep the minutes. I'm pleased to be joined today by most of our Board of Directors, including Patrick Spence, Karen Boone, Tom Conrad, Deirdre Findlay, Julius Genachowski and Panos Panay. Representing our independent accountants, PricewaterhouseCoopers LLP, is Ms. Alexandra Markovich. During the question-and-answer period, she'll be available to answer any questions concerning the company's financial statements. This year, in light of the public health impact of the COVID-19 pandemic, and our commitment to support the health, safety and wellness of our community, stockholders and other stakeholders, we are holding this meeting virtual. Stockholders may submit questions at any time during this meeting in the space provided on the virtual meeting web portal. During the annual meeting, questions from stockholders should pertain to the proposals being considered. Stockholders wishing to ask other questions will be given an opportunity to do so following the adjournment of the meeting. We will now proceed with the meeting. Sonos is pleased to announce that its annual meeting of stockholders will now come to order on this March 11, 2021, at approximately 10:02 a.m. Pacific Standard Time. Please allow me to welcome you to this meeting, and thank you for your interest and attendance. At today's meeting, we are considering 3 proposals for stockholder approval: one, the election of 2 directors; two, the ratification of the appointment of PricewaterhouseCoopers LLP as Sonos' independent registered public accounting firm for Sonos' fiscal year ending October 2, 2021; and three, an advisory vote to approve named executive officer compensation, the so-called say-on-pay vote. There were no other stockholder proposals presented in accordance with the applicable procedures. The Board of Directors has fixed the close of business on January 12, 2021, as the record date for the determination of stockholders entitled to notice of this meeting and entitled to vote at this meeting and any postponement or adjournment hereof. An affidavit has been delivered to me attesting to the fact that Notice of the Meeting and the proxy statement, together with proxy cards and the annual report for fiscal 2020 were mailed to all such stockholders. A certified list of the holders of common stock of Sonos as of the close of business on the record date, prepared for this meeting by the company's transfer agent, American Stock Transfer & Trust Company, LLC, is also available via the virtual meeting web portal. Prior to this meeting, Sonos appointed [ Wendy Shiva ], representing Broadridge Financial Solutions to serve as the inspector of election for this meeting and tabulate the results of the voting. I request that she file her oath of office with the secretary of the meeting for inclusion in the minutes of this meeting, and she has done so. At the record date of January 12, 2021, there were 119,364,994 shares of common stock outstanding and entitled to vote at this meeting with each share of common stock entitled to 1 vote. I have been informed that approximately [ 87,057,055 ] shares of our common stock, representing about 73% of the voting power of our outstanding capital stock entitled to vote at this meeting, are present or represented by proxy here today. This number constitutes a quorum, so the meeting is therefore authorized to transact business. It is now approximately 10:05 a.m. Pacific Standard Time on March 11, 2021, and the polls for voting on all matters are open. All Sonos stockholders entitled to vote at this meeting have the ability to do so online. If you are a stockholder entitled to vote and have not yet voted, or if you want to change your previously cast vote, please do so using the virtual portal -- please do so via the virtual meeting web portal by clicking on the voting button and following the instructions there. Please remember that if you have already voted by proxy, it is not necessary to vote again. Your vote will be cast as you previously instructed, and no further action is required. We'll now move to a review of the proposals. Please note that we will address stockholder questions or comments on any proposal after all proposals have been presented. The first proposal to come before the meeting is the election of directors. As indicated in the proxy statement, Patrick Spence and Deirdre Findlay have been each nominated for election as Class III directors, each to serve for a 3-year term expiring at the 2024 annual meeting of stockholders or until such director's successor is duly elected and qualified or until such director's earlier of death, resignation, disqualification or removal. The Board of Directors recommends a vote for the election of each of the nominated directors. The second proposal to come before the meeting is the ratification of the appointment of PricewaterhouseCoopers LLP as Sonos' independent registered public accounting firm for the fiscal year ending October 2, 2021. The Board of Directors recommends a vote for the ratification of the appointment of PricewaterhouseCoopers LLP as Sonos' independent registered public accounting firm for the fiscal year ending October 2, 2021. The third proposal to come before the meeting is the advisory vote on the compensation of our named executive officers, all as described in our proxy statement. The proposal is advisory and nonbinding. However, we'll provide information to our compensation, people and diversity and inclusion committee and our Board of Directors, regarding investor sentiment about our executive compensation philosophy, policies and practices which our compensation, people and diversity and inclusion committee and our Board of Directors will take into consideration when making future executive compensation decisions. The Board of recommends a vote for the approval on an advisory basis of the named executive officer compensation for fiscal year 2020. We will now address any questions or comments regarding any of the above proposals. As a reminder, we'll only be taking questions or comments germane to the proposals.

Eddie, there are no questions at this time.

Thank you, [ Rebecca ]. Since everyone's had the opportunity to vote, it is now 10:08 a.m. Pacific Standard Time and the polls are closed. The inspector of election has delivered her preliminary report, and I will now announce the preliminary results. Based on preliminary results as tabulated by the inspector of election, each of the nominees for director has received a plurality of the votes cast and has been elected as a Director of Sonos to serve for the 3-year term that will expire in 2024. Congratulations to Mr. Spence and Ms. Findlay. The ratification of the appointment of PwC as the company's independent registered public accounting firm received more than 99% of the votes cast in favor, and the appointment has been ratified. And the resolution on an advisory basis for the compensation of our named executive officers received more than 95% of the votes cast in favor of the proposal and has been approved. We will file the final report of the inspector of election with the records of this meeting. We expect to report the results of the meeting on a Form 8-K to be filed with the securities and Exchange Commission within 4 business days of this meeting. Since there is no other business, the formal portion of the meeting is adjourned. I'd like to thank all of you for your support and understanding in light of our switch to a virtual stockholder meeting for this year. Your health and well-being are of paramount importance to us, and we're thankful for your attendance at today's virtual meeting. I would also like to express my appreciation to all the stockholders who submitted their proxies and were not able to join the meeting. The directors, officers and employees of Sonos appreciate the loyalty and confidence of all our stockholders. We'll now address any questions or comments you may have regarding the company or its business. We ask that you please observe the rules of conduct and procedure that appear [ after the ] agenda. Please note we'll attempt to answer questions -- as many questions as time allows but only questions or comments that are germane to the company or the meeting will be addressed. I'd like to remind everyone that Sonos held a virtual investor event on Tuesday, March 9, that is just 2 days ago, which provided its first comprehensive overview for investors since its IPO as well as the financial outlook for our fiscal year 2024. The video webcast of that event and the event's question-and-answer session can be found on the Sonos Investor Relations website.

So Eddie, at this time, there are no questions.

Well, since there are no further questions, I would like to thank all of you for attending our meeting, and we are hereby adjourned.