Teledyne Technologies Incorporated (TDY) Earnings Call Transcript & Summary

Hello, and welcome to the 2024 Annual Meeting of Stockholders of Teledyne Technologies Incorporated. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn today's meeting over to Robert Mehrabian, Executive Chairman of Teledyne. Dr. Mehrabian, the floor is yours.

Good morning, ladies and gentlemen. I'm Robert Mehrabian, Executive Chairman of Teledyne Technologies Incorporated, and it's my pleasure to welcome you to this meeting. It is 9:15 a.m. California time. And in accordance with the notice of the meeting, I call to order Teledyne Technologies Annual Meeting of Stockholders. This year, we are again holding our annual meeting virtually. Stockholders participating may submit questions at any time in the space provided on the website used to access this meeting. This annual meeting is also being made available to the public in a listen-only webcast mode. An agenda for the meeting has been posted on our virtual meeting site. All stockholders entitled to vote 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 via the website used to access this meeting. Please remember that if you already have voted by proxy, it is not necessary to vote again. After voting has been completed on all matters on the agenda, we will close the polls, and Ms. Cibik will present the preliminary report of the Inspector of Elections. I will now make certain introductions. Let me first introduce our directors who are also participating virtually. The directors who are candidates for reelection are: Denise R. Singleton, Executive Vice President, General Counsel and Secretary of WestRock Company; Simon M. Lorne, Senior Adviser and former Vice Chairman and Chief Legal Officer of Millennium Management LLC and former General Counsel to the U.S. Securities and Exchange Commission; Vincent J. Morales, Senior Vice President and Chief Financial Officer of PPG Industries, Inc.; and Wesley von Schack, Chairman of AEGIS Insurance Services and former Chairman, President and CEO of Energy East Corporation. Teledyne Directors whose terms are continuing, in addition to myself, are: Charles Crocker, Chairman and CEO Crocker Capital and retired Chairman and CEO of BEI Technologies, Inc; Kenneth C. Dahlberg, retired Chairman and CEO of Science Applications International Corporation; Michelle A. Kumbier, Senior Vice President and President, Turf & Consumer Products, Briggs & Stratton, LLC; Robert A. Malone, Executive Chairman, President and CEO of First Sonora Bancshares, Inc. and retired Chairman and President of BP America, Inc.; Jane C. Sherburne, Principal of Sherburne PLLC and former Senior Executive Vice President, General Counsel and Corporate Secretary of the Bank of New York Mellon Corporation; and Michael T. Smith, retired Chairman and CEO of Hughes Corporation and Teledyne's lead directors. I would also like to introduce Edwin Roks, Chief Executive Officer of Teledyne; George Bobb, President and COO of Teledyne; Steve F. Blackwood, Senior Vice President and Chief Financial Officer of Teledyne; and Melanie S. Cibik, Executive Vice President, General Counsel, Chief Compliance Officer and Secretary of Teledyne. Also present today virtually are: Jeff Plourde and Karen Ericson of Deloitte & Touche, the company's independent auditor. If questions arise during the discussion period that Jeff or Karen should appropriately address, they will be glad to respond. We are also being assisted today virtually by representatives of Computershare, Mark Cano, will serve as inspector of election. I will now move to the second agenda item. Melanie Cibik will report on the mailing of the notice of the meeting and the presence of a quorum.

This meeting is held pursuant to notice dated and mailed or made available to stockholders on March 15, 2024, to each stockholder of record on March 1, 2024, who is entitled to vote. A list of stockholders entitled to vote at this meeting has been made available at the company's headquarters for the past 10 days and is available for examination by any stockholder desiring to do so on the website used to access this meeting. All documents concerning the call and notice of the meeting will be filed with the records of the meeting. The preliminary count of shares present immediately before the start of this meeting indicated 94% of the outstanding voting stock of the company present in person or by proxy. This represents a quorum.

I hereby declare a quorum is present at the meeting. Now we will proceed to agenda item #3. The first matter to be acted upon by the stockholders is the election of 4 Class I directors to serve until the 2027 Annual Meeting as provided in the proxy statement. Melanie Cibik will now put in nomination, the names of the slate of directors listed in the proxy statement.

I hereby nominate for election as directors of the company the following directors: Denise R. Singleton, Executive Vice President, General Counsel and Secretary of WestRock Company; Simon M. Lorne, Senior Adviser and former Vice Chairman and Chief Legal Officer of Millennium Management LLC and former General Counsel of the U.S. Securities and Exchange Commission; Vincent J. Morales, Senior Vice President and Chief Financial Officer of PPG Industries, Inc.; and Wesley W. von Schack, Chairman of AEGIS Insurance Services and former Chairman, President and CEO of Energy East Corporation.

I second the motion.

Thank you, Steve. No recent notice was received by Teledyne that any other nomination would be made at this meeting pursuant to the nomination procedure provided for in the company's restated certificate of incorporation and bylaws. Therefore, I declare the nominations closed. The next matter being submitted to stockholders for action is the ratification of the appointment by the Audit Committee of our Board of Directors of Deloitte & Touche LLP as our independent registered public accounting firm. The Audit Committee was assigned the responsibility of appointing the auditors for 2024. The committee consists entirely of directors who are independent of corporate management. It has had direct access to both the outside auditors and the internal auditors. In its deliberations, the committee has worked regularly with Deloitte & Touche LLP and has had opportunity to evaluate their work. I move for the ratification of the appointment of Deloitte & Touche LLP to audit the financial statements of the company and its subsidiaries for the year 2024.

I second the motion.

Thank you, again, Steve. The next matter being submitted to stockholders for action is the advisory resolution on executive compensation, commonly referred to as say on pay. We're asking the stockholders to approve the nonbinding advisory resolution on executive compensation as described and set forth in the proxy statement. The Board has recommended a vote in favor of this nonbinding resolution. Therefore, I move the approval of this resolution.

I second the motion.

Thank you, Ms. Cibik. The next matter being submitted to stockholders for action is the proposal to approve amendments to the Teledyne Restated Certificate of Incorporation to declassify the Board of Directors and provide for the annual election of directors. As noted in the proxy statement, the affirmative vote of at least 75% of shares outstanding is required to approve this proposal. The Board has recommended a vote in favor of this proposal. Therefore, I move for the approval of this proposal.

I second the motion.

Thank you, Steve. The next matter being submitted to stockholders for action is the proposal to approve amendments to Teledyne's Restated Certificate of Incorporation to provide for executive officer exculpation. As noted in the proxy statement, affirmative vote of at least a majority of the shares outstanding is required to approve this proposal. The Board has recommended a vote in favor of this proposal. Therefore, I move for the approval of this proposal.

I second the motion.

Thank you, Ms. Cibik. The next and final matter being submitted is a stockholder proposal to adopt simple majority voting. As per the agenda and rules of conduct, the stockholder will be given 3 minutes to introduce his proposal. At this time, the chair recognizes John [ Chevedden ]. Operator, please unmute Mr. [ Chevedden's ] line for a period of 3 minutes.

This is John Chevedden. Simple majority vote proposal. Shareholders request that our Board take the steps necessary to let each voting requirement in our charter and bylaws that calls for a greater than simple majority vote be replaced by a requirement for a majority of the votes cast for and against such proposals or a simple majority. If necessary, this means the closest standard to a majority of the votes cast for and against such proposals. This includes making the necessary changes in plain English. Shareholders are willing to pay a premium for shares of companies that have excellent corporate governance. The current supermajority vote requirements have been found to be 1 of 6 entrenching mechanisms that are negatively related to company performance according to what matters in corporate governance by Lucian Bebchuk of the Harvard Law School. Supermajority requirements are used to block initiatives supported by most shareholders but opposed by status quo management. This proposal topic won from 74% to 88% support at [ warehouses.co ], Waste Management, Goldman Sachs, FirstEnergy, McGraw Hill and [ Macy's ]. These votes would have been higher than 74% to 88% support if more shareholders had access to independent proxy voting advice. This proposal also received overwhelming 98% support at the 2023 Annual Meeting of American Airlines and the Carlyle Group. The overwhelming shareholder support for this proposal topic at hundreds of major companies raise the question of why Teledyne Technologies have not initiated this corporate governance reform earlier. This proposal will also facilitate declassification of the Board of Directors, which is a proposal announced earlier here today and is at risk at not getting the required vote of 75% of all shares outstanding. Please vote yes, simple majority vote. Thank you.

Thank you. The Board of Directors of Teledyne recommends a vote against this proposal for the reasons set forth in the proxy statement. Ms. Cibik, is there any other business that this forum should consider?

Management knows of no matters to be properly presented for consideration at this annual meeting.

Voting has now been closed. We'll now have a report from the Secretary, Melanie S. Cibik.

Mr. Chairman, the ballots have been counted and over 86% of the shares present in person or by proxy at this meeting have been voted for the election of each of the 4 Class I director nominees named in the proxy statement. Over 98% of the shares present in person or by proxy at this meeting have voted in favor of ratifying the appointment of Deloitte & Touche LLP as Teledyne's independent registered accounting firm to audit our financial statements for fiscal 2024. Over 95% of the shares present in person or by proxy at this meeting have been voted in favor of approving the advisory vote on executive compensation. Approximately 88% of the outstanding shares have voted in favor of approving the proposal to approve amendments to the company's Restated Certificate of Incorporation to declassify the Board of Directors and to provide for the annual election of directors. Approximately 80% of the outstanding shares have been voted in favor of approving the proposal to approve amendments to the company's Restated Certificate of Incorporation to provide for Executive Officer exculpation. Finally, in regard to the stockholder proposal to adopt simple majority voting, approximately 81% of the shares present in person or by proxy at this meeting have been voted in favor of approving the proposal.

I hereby declare that the nominees for directors have been duly elected. The appointment of Deloitte & Touche LLP to audit Teledyne's financial statement for our fiscal year 2024 has been duly ratified, and the advisory resolution on executive compensation has been duly approved. I hereby declare that the proposal to approve amendments to the company's Restated Certificate of Incorporation to declassify the Board of Directors and provide for the annual election of directors has been duly approved. I hereby declare that the proposal to approve amendments to the company's Restated Certificate of Incorporation to provide for executive officer exculpation has been duly approved. And finally, I hereby declare that the stockholder proposal to adopt simple majority voting has been duly approved. We've now come to that part of the agenda providing for general questions and discussion. If you're a stockholder entitled to vote at this meeting and wish to ask a question you may submit a question by clicking on the message icon on the upper right corner of your screen and typing in your questions. We will answer questions submitted by you after the meeting. Please include your e-mail address with your question. As there is no other business, this concludes our meeting. Thank you for joining and for your support and interest in Teledyne. The meeting is adjourned.

This concludes the meeting. You may now disconnect.