The ODP Corporation (ODP) Earnings Call Transcript & Summary

Hello, everyone. Welcome to the ODP Corporation Annual Meeting of Shareholders. I will now pass the call to Joe Vassalluzzo.

Thank you. Good morning, and welcome to the 2021 Annual Meeting of Shareholders of the ODP Corporation. I am Joe Vassalluzzo, Chairman of the Board of Directors of the ODP Corporation, and I will be presiding at this meeting. Thank you to all of our associates who have worked together to provide essential products and services necessary to help our customers and serve our communities during this global pandemic and uncertain time, all while doing it safely. To conduct an orderly meeting, we ask our participants abide by the rules of conduct that can be found on the web portal. We will conduct the business of our meeting in the order of the agenda. Because the company is in a quiet period, we are not able to have a general question-and-answer period at the end of this meeting. We will, however, do our best to address any unanswered questions on our Investor Relations page when we are able to do so. Only validated shareholders may submit questions in the designated field on the web portal. As stated in the rules of conduct, we ask that you limit your questions to the items of the agenda that is before us. Thank you for your cooperation with these rules. Please note that this meeting is being recorded. However, no one attending via the webcast or telephone is permitted to use any audio recording device. In keeping with the digital approach to this year's annual meeting, it is now shortly after 9:00 a.m. Eastern Time on April 21, and this meeting is now officially called to order. In addition to myself in attendance at today's meeting are the following directors: Gerry Smith, our CEO; Quincy Allen; Kristin Campbell; Marcus Dunlop; Cynthia Jamison; Francesca Ruiz de Luzuriaga; Shashank Samant; Wendy Schoppert; and David Szymanski. In 2020, Ms. Schoppert and Messrs. Allen and Samant joined our Board. And in January 2021, we added Mr. Dunlop to our Board. These new directors bring many years of leadership experience, public company governance, financial and operational expertise, technology services and product development. In addition to the diverse set of skills and perspective that these 4 new nonincumbent directors bring to the Board, they also serve to further enhance our Board's diversity in gender and ethnicity. Lorna Simms, our Corporate Secretary, will act as Secretary of this meeting. We are also joined here today by representatives from Deloitte & Touche LLP, our independent auditors. To begin the meeting of our annual meeting, I will first ask Lorna Simms, whether we have a quorum.

Thank you, Mr. Chairman. The Board of Directors picked February 25, 2021, as the record date for determining shareholders entitled to vote at this meeting. An affidavit has been delivered to the company attesting to the fact that either a notice of Internet availability of the Notice of Annual Meeting, the proxy statement and the 2020 annual report on Form 10-K were made available on the company's proxy voting website or the documents themselves were mailed on or about March 12, 2021, to all shareholders as of the record date and will be incorporated into the minutes of this meeting. The shareholder list, which list has been certified by Computershare, our transfer agent, shows that as of the close of business on the record date of February 25, 2021, there were 53,524,445 shares of common stock outstanding and entitled to vote at this meeting. A copy of the shareholders list has been on file with the company for the last 10 days and is available for inspection by any shareholder of record at any time during regular business hours. The list is also available for examination during today's meeting on the web portal as required by law. Mike Barbera, a representative for Broadridge Financial Solutions, Inc., is serving as our independent inspector of elections and earlier today, took the oath of inspector of elections. Mr. Barbera has informed that they are representative in-person or by proxy shares of common stock representing 46,592,278 votes or approximately 87.04% of the voting power on the record date. Since this represents more than a majority of the voting power of all issued and outstanding stock entitled to vote on the record date, a quorum is present for purposes of transacting business.

Thank you, Lorna. Because holders of a majority of the shares entitled to vote at this meeting are present in-person or by proxy, a quorum is present. And I declare this meeting to be duly convened for purposes of transacting such business as may be properly come before. Before we proceed with the proposals, in addition to Gerry Smith, our CEO, I would like to also introduce several members of our executive management team, who are in attendance at today's meeting: Anthony Scaglione, Executive Vice President and Chief Financial Officer; David Bleisch, Executive Vice President and Chief Legal and Administrative Officer; and Tim Perrott, our Vice President of Investor Relations, the company's primary contact with our investors, analysts and shareholders. The business of this meeting is limited to the proposals that are included in the Notice of Annual Meeting of shareholders and described in the proxy statement. You will have an opportunity to pose questions after the presentation of all proposals being submitted to shareholders for vote. Please hold your questions until that time. The first proposal before the shareholders of the company is the election of directors. May I have a motion, please?

Mr. Chairman, on behalf of the Board's Independent Corporate Governance and Nominating Committee, I nominate the following 10 individuals as named and for the term described in the proxy statement as directors to serve until the annual meeting of shareholders in 2022 and until their successors have been duly elected and qualified: Quincy L. Allen, Kristin A. Campbell, Marcus B. Dunlop, Cynthia T. Jamison, Francesca Ruiz de Luzuriaga, Wendy L. Schoppert, Shashank Samant, Gerry P. Smith, David M. Szymanski, and Joseph S. Vassalluzzo. All nominees currently serve as directors. Election of each nominee requires a majority of the votes cast.

Thank you, David. Is there a second?

Mr. Chairman, I second the motion.

If there is no further discussion, the meeting will now proceed to the second proposal on the agenda regarding the ratification of the appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm for the fiscal year 2021. The Audit Committee of the Board of Directors appointed Deloitte & Touche LLP. Mr. Bleisch, would you present the resolution?

Mr. Chairman, I move the adoption of the following resolution. Resolved that the appointment of Deloitte & Touche LLP as independent registered public accounting firm for the ODP Corporation for fiscal year 2021 is hereby ratified. Approval of this proposal requires a majority of the votes cast on the matter.

Thank you, again, David. Is there a second?

Mr. Chairman, I second the motion.

The meeting will now proceed to the third proposal on the agenda concerning the approval of the company's 2021 long-term incentive plan. May I have a motion?

Mr. Chairman, I move the adoption of the following resolution. Resolved that the ODP Corporation 2021 long-term incentive plan is hereby approved.

Approval of this proposal requires the affirmative vote of holders of a majority of the shares of the company's common stock in-person or represented by proxy and entitled to vote at this meeting. Is there a second?

Yes, Mr. Chairman, I second the motion.

The meeting will now proceed to the fourth proposal on the agenda concerning the nonbinding advisory vote on the compensation of the company's named executive officers. May I have a motion?

Mr. Chairman, I move the adoption of the following resolution. Resolved that the compensation paid to the ODP Corporation's named executive officers as disclosed pursuant to Item 402 of Regulation S-K, including the compensation discussion and analysis, compensation tables and related narrative discussion is hereby approved. Approval of this proposal requires the affirmative vote of holders of the majority of the shares of the company's common stock present in-person or represented by proxy and entitled to vote at this meeting.

Is there a second?

Mr. Chairman, I second the motion.

Thank you all. As a reminder, our Board recommends a vote for all proposals. If any shareholder would like to make a comment regarding any proposals, please submit your comment through the web portal. There being no further questions, we will now open the polls for voting. The time is 9:12 Eastern Time on April 21, 2021. Any shareholder who hasn't yet voted or wishes to change their vote, may do so by clicking on the voting button on the web portal and following the instructions. If you previously voted via telephone or Internet or sent in your proxy and do not want to change your vote, you do not need to take any further action at this time. [Voting]

Now that everyone has had the opportunity to vote, I now declare the polls closed at 9:13 a.m. Eastern Time on April 21, 2021. The next item on the agenda is the preliminary report of the inspector of elections. Any votes provided through the web portal before the polls closed, but not reflected in the preliminary report will be reflected in the final report of the inspector of elections. I call upon Mr. Barbera to present the preliminary report.

Mr. Chairman, I have determined that each of the 10 directors nominated by the Board of Directors for election received in excess of 77% of the votes cast for election of directors. I have determined that in excess of the majority of shares present in-person or represented by proxy and entitled to vote were cast in favor of the ratification of the appointment of Deloitte & Touche LLP. I have determined that the affirmative votes of a majority of the issued and outstanding common stock cast in favor of the company's 2021 long-term incentive plan to exceed the votes cast against it. I have determined that the votes cast in favor of the nonbinding advisory vote under the compensation of the named executive officers to exceed the votes cast against it.

Thank you, Mr. Barbera. We will be reporting the final vote results in a Form 8-K to be filed with the SEC within 4 business days from today. Since there is no further business before this meeting, the meeting is now adjourned. Again, because the company is in a quiet period, we will not have a question-and-answer period. Thank you again for attending today's meeting.