Townsquare Media, Inc. (TSQ) Earnings Call Transcript & Summary

Welcome to the 2020 Annual Meeting for Townsquare Media, Inc. Our host for today's call is Bill Wilson, Chief Executive Officer and Director. [Operator Instructions] I will now turn the call over to your host, Mr. Wilson, you may begin, sir.

Thank you, Paul. Welcome, and thank you for coming to the 2020 Annual Meeting of Stockholders of Townsquare Media, Inc., which we are holding virtually via live webcast due to the ongoing public health impact of the coronavirus. I am Bill Wilson, Chief Executive Officer and a Director of the company. And I will act as Chairman of this meeting. Thank you for joining us this morning. The rules of conduct for this meeting as well as the certified list of stockholders of record entitled to vote at this meeting are available for you to access on the virtual meeting website. If you encounter technical difficulties, please call the technical support number posted on the login page. The meeting will proceed as follows: first, I will make some introductions and cover a few procedural matters; next, we will conduct the formal business of the meeting, after which we will announce the preliminary results of the vote; finally, following the conclusion of the meeting, I will provide an opportunity for stockholders to ask questions. I would first like to introduce 2 of our officers present today who have been appointed as proxies for those stockholders who have submitted their votes by proxy. Stu Rosenstein, Executive Vice President, Chief Financial Officer and Secretary; and Chris Kitchen, Executive Vice President and General Counsel. Also on the call with us is Director, Stephen Kaplan and David Lebow. In addition, Luis Torres and Ben Klein from BDO USA, LLP, who are present telephonically. Now let me cover the procedural matters. Stu Rosenstein will act as secretary of the meeting. Mr. Rosenstein has in his possession the following documents: the certified list of stockholders of record entitled to vote at this meeting, the notice of meeting, form of proxy and proxy statement, together with the affidavit of mailing of proxy materials by Broadridge Financial Solutions to each person who is a record holder of Class A or Class B common stock as of the -- to be -- I apologize, as of the close of business on July 1, 2020, the record date. Mr. Rosenstein, please see that all such materials, including the affidavit of mailings, are filed in the corporate records. Pursuant to the company's bylaws, Gregory Denman, a representative of Broadridge Financial Solutions, has been appointed inspector of election to supervise the voting. Mr. Denman has signed an oath of office, and the secretary will file a copy of his oath with the records of the meeting. With the procedural matters out of the way, we can now begin the business of today's meeting. I have been advised that a preliminary count of proxies for the meeting indicates we have a quorum, and therefore, I declare the meeting officially convened. We have 5 matters to be acted upon today. At this meeting today, you will be asked to elect 2 Class III directors named in the company's 2020 proxy statement to the company's Board; two, to ratify the appointment of BDO USA, LLP as the independent registered public accounting firm for the company for 2020; three, to approve on an advisory basis, the compensation of our named executive officers; four, to approve on an advisory basis whether an advisory vote on the compensation of our named executive officers should occur every 1, 2 or 3 years; and five, to consider a stockholder proposal requesting that the company initiate a process to adopt a majority voting standard in uncontested director elections, if properly presented at this meeting. The time is now 9:04, and the polls for all proposals are now open. If you previously voted by the Internet, phone or mail, you do not need to take any additional action. Any stockholder, who is logged on using your 16-digit control number and wants to vote during this meeting or previously voted and wants to change his or her vote, may do so now on the virtual meeting website. We will now present the proposals and answer questions regarding the proposals, following which time the polls will properly close. [Operator Instructions] We will answer questions on matters in the agenda to be voted on by the stockholders at this meeting if received before the polls are closed. After the polls close, we will announce the preliminary results of today's meeting and conclude today's formal business. Thereafter, we will address general questions from stockholders unrelated to the proposals presented today. Holders of record of Class A common stock and Class B common stock at the close of business on July 1, 2020, the record date, are entitled to vote on each matter, and there is no cumulative voting. Each share of Class A common stock entitles the holder to vote 1 vote for each proposal and each share of Class B common stock entitles the holder to vote 10 votes for each proposal. Directors are elected by plurality of vote cast at this meeting or by proxy. All other matters require the approval of the majority in voting power of shares of capital stock present online or represented by proxy at this meeting and entitled to vote thereon. However, as to proposal 4, the company's Board expects to be guided by the option that receives the greatest number of votes, even if that alternative does not receive a majority. The first item of business is to elect 2 Class III directors to serve on the company's Board of Directors. The Board of Directors has nominated Stephen Kaplan and Bill Wilson to be reelected as directors of the company, each to serve a 3-year term and until their respective successors are duly elected and qualified or until such directors' earlier retirement, resignation or other termination of service. A description of each nominee is included in the proxy statement. The Board recommends that stockholders vote for all nominees. As no other persons were nominated in accordance with the company's governing documents, we will not be considering any other nominations at this meeting. The second item of business is the ratification of the appointment of BDO USA, LLP as the company's independent registered public accounting firm for the year ending December 31, 2020. This proposal is described in detail in the proxy statement. The Board recommends that stockholders vote for the ratification of the appointment of BDO USA, LLP. Luis Torres and Ben Klein from BDO USA, LLP are present at this meeting to respond to appropriate questions of stockholders. The third item of business is the approval on an advisory basis of the compensation of our named executive officers pursuant to the following resolution. Resolved, that the company's stockholders approve, and on an advisory basis, the compensation of the company's named executive officers as disclosed in the company's proxy statement for 2020 annual meeting of stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation tables and related narrative discussion. This proposal is described in detail in the proxy statement. The Board recommends that stockholders vote for this proposal. The fourth item of business is the approval, on an advisory basis, of whether an advisory vote on the compensation of our named executive officers should occur every 1, 2 or 3 years. This proposal is described in detail in the proxy statement as well. The Board recommends that stockholders vote for a frequency of every 3 years. The fifth and final item of business is to consider stockholder proposals requesting that the company initiate the appropriate process to adopt a majority voting standard in uncontested director elections. At the request of the California Public Employees' Retirement System, management hereby waives the requirement of ARTICLE II, Section 11(C)(1) of the company's bylaws that the stockholder or qualified representative appear at the meeting to present the proposal, and management has agreed to present the proposal for consideration. Mr. Rosenstein, would you please present the stockholder proposal?

Resolved, that the shareholders of Townsquare Media, Inc., hereby request that the Board of Directors initiate the appropriate process to amend the company's articles of incorporation and/or bylaws to provide that directors shall be elected by the affirmative vote of the majority of votes cast at an annual meeting of shareholders in uncontested elections. A plurality vote standard, however, will apply to contested director elections, that is when the number of director nominees exceeded the number of Board seats.

Thank you, Stu. This proposal and the company's opposing statement is described in detail in the proxy statement as well. The Board recommends that stockholders vote against this proposal. As no other business was properly brought before this meeting, no other business will be voted on at today's meeting. We will now answer appropriate questions on proposals #1 through 5 in accordance with the rules of conduct. The polls will close promptly following questions and answers on the proposals. [Operator Instructions] We're going to pause for questions. Okay. Seeing no questions were submitted, online voting will remain open for the next 2 minutes. [Voting]

I now declare the polls closed at 9:12 a.m. I will now call on the secretary of the company to report the preliminary results of this meeting as provided by the Inspection of Elections. Stu, the results, please.

Each of Stephen Kaplan and Bill Wilson has been elected as a Class III director. The proposal to ratify the appointment of BDO USA, LLP as the company's independent registered public accounting firm for 2020 has been approved. The proposal to approve, on an advisory basis, the compensation of our named executive officers has been approved. For the proposal to approve, on an advisory basis, the frequency of an advisory vote on the compensation of our named executive officers, 3 years has received the highest number of votes cast. The stockholder proposal requesting that the company initiate a process to adopt a majority voting standard in uncontested director elections has not been approved. A Form 8-K with the final results of the voting will be filed with the SEC within 4 business days of this meeting. The report and certificate of the inspector of elections will be filed with the minutes of this meeting.

Thank you, Stu. We've concluded the stated business of the meeting. This meeting is now adjourned. We will now proceed with the informal portion of the meeting. At this time, I welcome any appropriate questions that stockholders may have, which are unrelated to the proposals presented today. [Operator Instructions] As there are no questions, I would again like to thank you all for joining us today. We appreciate your continued interest and support. Be safe and have a great day.

This now concludes the meeting. Thank you for joining and have a pleasant day.