Stoneridge, Inc. (SRI) Earnings Call Transcript & Summary

Good day and welcome to the Stoneridge, Inc. 2021 Annual Meeting of Shareholders. At this time, I would like to turn the meeting over to Jon DeGaynor, President and Chief Executive Officer of Stoneridge. Please go ahead.

Thank you and good morning. And on behalf of the entire Board, our officers and our employees, I would like to thank you for attending our 2021 Annual Meeting of Shareholders. I'm Jon DeGaynor, President and Chief Executive Officer of Stoneridge. It is my pleasure to welcome you to this year's Annual Meeting of Shareholders. This year, we are holding a virtual annual meeting to address the continuing concerns related to the COVID-19 pandemic. In addition to concerns related to the pandemic, holding a virtual annual meeting should provide expanded access, improve communication and provide potential cost savings to our shareholders and our company. We believe that holding a virtual annual meeting enables more shareholders to attend and participate in the meeting because our shareholders can fully participate from any location with Internet access. It is now shortly after 11:00 a.m. Eastern Time on Tuesday, May 11, 2021. Accordingly, I call the meeting to order. I will act as Chairman of the meeting. In these uncertain times, our leadership team is focused on the safety and security of our employees, and we remain committed to doing our -- everything we can to lessen the impact that the COVID-19 pandemic is having on our employees, both in the workplace and at home. We have implemented safety measures and are strictly adhering to the CDC and other applicable guidelines. As is our custom, we will conduct the business portion of our meeting first and answer general questions regarding the company and our performance after the official business of the meeting is concluded. Although we may not be able to answer every question, we will do our best to provide a response to as many as practical. Today's meeting will address the agenda items set forth on the notice of annual meeting of shareholders described in the company's proxy statement. The meeting will be conducted in accordance with the regulations for conduct at the Annual meeting of Shareholders. The regulations are available to all shareholders on the meeting webcast page. Tom Dono, Chief Legal Officer and Secretary of the company, will act as secretary of the meeting and record the minutes. Please note that this meeting is being recorded. However, no one attending via the audio webcast is permitted to use any audio recording device. Will the secretary present a list of the shareholders of record at the close of business, March 19, 2021?

I have and hereby present to you a complete list of the shareholders of record at the close of business on March 19, 2021, the record date fixed by the Board of Directors for the determination of the shareholders entitled to notice of the annual meeting of shareholders and to vote their common shares held on the record date at this meeting. A certified list of shareholders of record as of the close of business on the record date, March 19, 2021, is available for inspection by shareholders during the meeting using the certified shareholders list link found on the meeting webcast page.

Will the secretary present to the meeting a copy of the notice of annual meeting of shareholders, together with the proof of the mailing of such notice?

Mr. Chairman, I have and hereby present a copy of the notice of annual meeting of shareholders, proxy statement and form of proxy with the affidavit of distribution and mailing by Broadridge Financial Solutions, Inc., the company's mailing agent, showing the distribution and mailing of the notice of Internet availability on April 1, 2021, which provides instructions on how to access the proxy materials on the Internet or, if desired, instructions on how to request paper copies of the proxy materials to each shareholder of record at the close of business on March 19, 2021. The proxy statement, the notice of annual meeting and the 2020 annual report to shareholders are available on the meeting webcast page. The notice provides that the meeting will be held for the following purposes: one, to elect 9 directors each for a term of 1 year; two, to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for 2021; three, to vote on the advisory resolution to approve executive compensation; four, to vote on a proposal to approve the company's annual incentive plan; and five, to transact such other business as may be properly brought before the annual meeting and any postponement or adjournment thereof. A copy of the 2021 Stoneridge, Inc. notice of annual meeting of shareholders, proxy statement and the former proxy as well as an affidavit of mailing and distribution of Broadridge Financial Solutions shall be made a part of the record of this meeting.

I direct the secretary to cause the affidavit of distribution and mailing of the notice of Internet availability and proxy materials to be filed and preserved with the records of the company. As set forth in the proxy statement of the Board -- as set forth in the proxy statement, the Board has nominated the following persons for election as directors: Jonathan B. DeGaynor, Jeffrey P. Draime, Douglas C. Jacobs, Ira C. Kaplan, Kim Korth, William M. Lasky, George S. Mayes, Jr., Paul J. Schlather and Frank S. Sklarsky. The company has appointed Greg Malatia of Broadridge Investor Communications Solutions, Inc. to act as inspector of election for the meeting. Mr. Malatia is with us today and has earlier taken the oath of inspector of elections. A word about submitting appropriate questions. After the official items of business are presented, we will respond to appropriate questions about the proposals before the polls close. After the official business is conducted and the meeting has been adjourned, we will also provide time for general questions concerning the company. The questions tab on the meeting webcast page will remain open during the meeting. Only validated shareholders on the meeting webcast page can submit questions. I would also like to take this opportunity to report that Clare Willett and [ Aaron Crable ] of Ernst & Young LLP, the company's independent registered public accounting firm for 2020, are attending the meeting at the company's invitation. Later in the meeting, Ms. Willett will be available to make a statement, if she so desires, and any questions -- and answer any questions you may have with respect to the company's audited financial statements for the fiscal year ended December 31, 2020.

The inspector of election has reported that a quorum of outstanding common shares is present, either represented in person or by proxy, at the meeting out of a total of 27,161,776 common shares outstanding and entitled to vote.

The meeting -- the minutes of last year's Annual Meeting of the Shareholders held on May 19, 2020, are available to any registered shareholder for examination. Please contact our Corporate Secretary, Thomas Dono, after the meeting at the company's address listed on the notice of annual meeting, if you would like to see a copy. I direct the secretary to incorporate with the records of the company a copy of the annual report for the fiscal year ended December 31, 2020, together with the affidavit of mailing and distribution. And I further direct the secretary to file with the records of the company, the reports of the inspector of election of the action on the shareholders taken at this meeting, together with a list of shareholders as certified by Computershare Communication Services, and the proxies and ballots cast at the meeting. The polls are now open to vote at the annual meeting and will remain open until all items of business have been presented and discussed. A substantial majority of the outstanding common shares on the record date have submitted proxies, either by mail or by telephone or by the Internet. But if you still need to vote or would like to change your vote, you can do so through the Vote Here button on your screen. You do not have to vote through the meeting if you have already submitted a proxy either by mail, by phone or by the Internet. At this time, any shareholders that are logged in and who have not submitted a proxy and wish to vote their company common shares may do so now by clicking on the Vote Here button on your screen. The preliminary final vote totals will be reported after the items of business have been presented and the polls have been closed. If any shareholder would like to make a comment or ask a question regarding any of the proposals please submit your comment or question through the meeting webcast portal. The first order of business is the election of 9 directors. As indicated by the company's proxy statement, the following individuals were nominated by the Board of Directors to serve as directors for the company for a term expiring in 2022: Jonathan B. DeGaynor, Jeffrey P. Draime, Douglas C. Jacobs, Ira C. Kaplan, Kim Korth, William M. Lasky, George S. Mayes, Jr., Paul J. Schlather and Frank S. Sklarsky. The Board recommends a for vote for each of the nominees. Each nominee is currently serving as a company director. The second order of business is to vote on a proposal to ratify the appointment of Ernst & Young LLP as the company's independent accountants for the company's fiscal year ending December 31, 2021. The Board recommends a vote for this proposal. The next order of business is an advisory vote on a resolution to approve executive compensation, the so-called say-on-pay vote. It is a nonbinding vote, although the Compensation Committee and the Board will certainly take the results of the vote into account when making future compensation decisions. The Board recommends a vote for this proposal. The final order of business is to vote on the proposal to approve the company's annual incentive plan as described in the proxy statement. The Board recommends a vote for this proposal. Each of the proposals is described in detail in the proxy statement. Are there any questions on the proposals? There will now be a short pause to allow shareholders to vote if they so desire. A reminder that if you've already submitted a proxy by mail or by telephone or by the Internet, there is no need to vote at the meeting. [Voting]

I now declare the polls closed. Will the inspector of election count the votes and report to the secretary?

The report of the inspector of election on the election of 9 directors for a term expiring in 2022 is that the following nominees received the greatest number of votes: Jonathan B. DeGaynor, Jeffrey P. Draime, Douglas C. Jacobs, Ira C. Kaplan, Kim Korth, William M. Lasky, George S. Mayes, Jr., Paul J. Schlather, Frank S. Sklarsky.

I declare each of the persons just referred to by the secretary as having received the greatest number of votes to have been duly elected a director of the company to serve until the next Annual Meeting of Shareholders or until his or her successor has been duly elected and qualified.

We have also been informed by the inspector of election that preliminary vote tabulation show: one, the ratification of the appointment of Ernst & Young LLP as the company's independent accountants for the company's fiscal year ending December 31, 2021, has been approved; two, the compensation of the named executive officers has been approved by an advisory vote; and three, the company's annual incentive plan has been approved.

I now declare that each of the proposals discussed by the secretary is approved. Based on the final reports of the inspector of election, the company will be reporting the final vote results on a Form 8-K to be filed with the SEC within 4 business days. Operator, please open up Ms. Willett and [ Mr. Crable's ] lines. Ms. Willett, would you like to make a statement regarding the company's 2020 financial statements or on any relevant topic?

Thank you. I have no comments at this time.

Are there any questions for Ms. Willett or [ Mr. Crable ] concerning the finance statements? Being there are no questions, this concludes the formal part of the meeting. After the meeting is adjourned today, we will open the meeting up for general questions regarding the company. The meeting is adjourned. Are there any questions about the company? No? Being that there are no questions, I want to thank you all for your participation at the Annual Meeting of the Shareholders.