Summit Midstream Corporation (SMC) Earnings Call Transcript & Summary

I would like to welcome you to Summit Midstream Partners 2022 Annual Meeting of Limited Partners, which is our first annual meeting. I am Heath Deneke, the Chairman of the Board, President and Chief Executive Officer of the partnership. At this time, I would like to introduce the other members of the Board of Directors of the partnership. Mr. James Cleary, Jim was appointed as a Director in 2020. Jim is our Lead Independent Director. Mr. Lee Jacobe. Lee was appointed as a director in 2019. Mr. Robert McNally, Rob was appointed as a Director in 2020 as well. Mr. Rommel Oates. Rommel was appointed as a director in 2022. I would like to extend a special welcome to Rommel as our newest Board member. Mr. Jerry Peters, Jerry was appointed as a Director in 2012. And there is Marguerite Woung-Chapman, Marguerite was appointed as a Director in 2020. So as I mentioned earlier, I'm the Chairman of the Board and have been a Director since 2019. In addition to our Board of Directors, we also have present today, Mr. William Mault, our Executive Vice President and Chief Financial Officer; Mr. James D. Johnston, our Executive Vice President, General Counsel, Chief Compliance Officer and Secretary; Mr. Matthew Sicinski, our Senior VP and Chief Accounting Officer; and Mr. Ross Wong, our Vice President of Finance, Treasurer and Investor Relations. We also have present representatives of Baker Botts, our outside legal counsel, and representative of Deloitte & Touche, our independent registered public accounting firm. I'll set the agenda for the meeting, which you should be able to see under the Documents tab on your screen. We'll conduct the meeting in 2 parts. First, we will conduct the official business portion of the meeting. Then we'll have a brief period for unitholders to ask questions or make comments. I'll now turn this over to James Johnston, our EVP and General Counsel, Chief Compliance Officer and Secretary.

Thank you. I'd like to begin the business portion of the meeting now. The meeting is formally called to order. If you wish to ask questions regarding any of the items of business for the meeting, please submit your question using the Message tab on your screens. Please provide your name and state whether you are a unitholder or a proxy of a unitholder. If you are a proxy of a unitholder, please provide the name of the unitholder you represent. If you have any questions for the representatives of Deloitte, please clearly state that your question is directed to Deloitte. We have in our possession a list of unitholders entitled to vote at the meeting and the valid proxies received from those unitholders as provided by our transfer agent. I am designating a representative from [ AST ] to act as Inspector of Elections. This brings us to the first item on our agenda, which is the determination of a quorum. Our partnership agreement provides that the presence in person or by proxy of unitholders representing a majority of the outstanding common units shall constitute a quorum for the meeting. May I now have the inspector's report on whether a quorum is present.

Mr. Johnston, there are present at the meeting in person or by proxy, more than 7,396,918 common units. This constitutes the quorum.

Thank you. The notice of 2022 Annual Meeting of Limited Partners was sent on or about March 31, 2022, to limited partners of the partnership to our holders of record of outstanding common units of the partnership at the close of business on the record date, which was March 21, 2022. A quorum is present in person and by proxy, therefore, the meeting is lawfully and properly convened. We have determined that there are insufficient votes represented at the meeting to approve Proposal 2 presented in the proxy statement furnished to our common unitholders. Accordingly, we will now proceed with Proposals 1, 3, 4 and 5 presented in the proxy statement. If you've already submitted a valid proxy, and do not wish to revoke it, you do not have to vote now during the meeting. Your votes will be cast as indicated on your proxy chart. If you wish to change your vote, or have not yet voted, please vote now using the Vote tab on your screen. You are able to vote at any time during the meeting until we close the polls. Meeting will now consider the 4 business items on the agenda as set out in the proxy statement, which are: first, the election of the nominees named in the proxy statement as directors to serve for a 3-year term; second, the ratification of the appointment of Deloitte & Touche as the partnership's independent registered public accounting firm for 2022; third, the approval of the advisory resolution on executive compensation; and four, the advisory vote on the frequency of future advisory votes on executive compensation. I will present each of these business matters and then a vote will be taken on each item. Proposal 1, election of directors. The first item of business on our agenda is the election of 2 nominees as directors. The Board of Directors has nominated and recommended Lee Jacobe and Jerry Peters as Directors of the partnership. In accordance with our partnership agreement, Mr. Jacobe and Mr. Peters will be elected as Class I directors to serve 3-year terms expiring on the date of the annual meeting to be held in 2025. In accordance with our partnership agreement, directors are elected by a plurality of the votes cast by our unitholders. For this annual meeting, in accordance with our partnership agreement, unitholder nominations may be brought before the meeting only if the secretary received the nominations in writing no later than February 9, 2022. We have received no such nominations, therefore, the nominations for director are closed. The Board of Directors has recommended that the unitholders elect Mr. Jacobe and Mr. Peters. The proxy statement contains considerable information about the nominees, so I will not comment unless there are questions regarding the election during the question period. Next, Proposal #3, ratification of appointment of independent registered public accounting firm. The next item of business on the agenda is the ratification of the Board's appointment of the independent registered public accounting firm with partnership for the year 2022. Deloitte & Touche LLP has acted as independent registered public accounting firm for the partnership since 2009. In accordance with our partnership agreement, ratification of the appointment of the independent registered public accounting firm will require the affirmative vote of a majority of our outstanding common units entitled to vote at this annual meeting. The Board of Directors has recommended that the unitholders vote for the ratification of the appointment of Deloitte & Touche LLP as independent registered public accounting firm for 2022. Proposal 4, approval of the advisory resolution on executive compensation. The next item of business on our agenda is the approval of the advisory resolution on the compensation of the partnership's named executive officers, commonly referred to as a say-on-pay vote. As an advisory vote, this vote is not binding on the partnership or its Board of Directors, but the Board intends to consider the outcome of the vote when making future compensation decisions for our named executive officers. In accordance with our partnership agreement, approval of this proposal will require the affirmative vote of the majority of our outstanding common units entitled to vote at this annual meeting. The Board of Directors has recommended that the unitholders vote for the approval on an advisory basis of this proposal. The proxy statement contains considerable information about the partnership's compensation practices, so I will not comment further unless there are questions during the question period. Lastly, Proposal 5, advisory vote on the frequency of future advisory votes on executive compensation. The final item of business on our agenda for today is the advisory vote to determine how frequently the partnership should hold future advisory votes on the compensation of its named executive officers or say-on-pay votes. As an advisory vote, similar to Proposal 4, this vote is not binding on the partnership or its Board of Directors, but the Board intends to consider the outcome of the vote when determining the frequency of future advisory votes on executive compensation. In accordance with our partnership agreement, approval of this proposal will require the affirmative vote of a majority of our outstanding common units entitled to vote at this annual meeting. However, because this proposal has 3 possible options every 1, 2 or 3 years, if no option received, the affirmative vote of a majority of our outstanding common units entitled to vote at this meeting, the option receiving the greatest number of votes will be considered the preferred frequency for future say-on-pay votes as determined by the unitholders on an advisory basis. The Board of Directors has recommended that the unitholders vote on an advisory basis for every 1 year as the frequency for say-on-pay votes. We will now pause to collect any questions that have been submitted. And just as a reminder, while we're waiting if you have any questions after the meeting, please contact Summit Investor Relations at ir.summitmidstream.com. Ross, are there any questions on any of these proposals?

No, there are no questions on any of these proposals.

Thank you. I will now call the vote on these 4 items of business. As I mentioned earlier, we have determined that there are insufficient votes represented at the meeting to approve Proposal 2 presented in the proxy statement, which is the approval of Summit Midstream Partners' 2022 long-term incentive plan. Accordingly, the polls are open only for the purposes of voting on Proposals 1, 3, 4 and 5. Please cast your votes if you have not already done so, we will be closing the polls shortly. [Voting]