Universal Health Services, Inc. (UHS) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Stockholders of Universal Health Services, Inc. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn today's meeting over to Marc D. Miller, Chief Executive Officer and member of the Board of Directors of Universal Health Services, Inc. Mr. Miller, the floor is yours.

Welcome to the Annual Meeting of Stockholders of Universal Health Services. Due to the continuing public health impact of the COVID-19 pandemic and to support the health and well-being of our communities, employees, stockholders and other stakeholders, this year's annual meeting is being conducted completely virtually via a live audio webcast. I would like to introduce the other directors and officers of the company who are participating in today's meeting. Directors and officers, members of the Board of Directors are Alan B. Miller, Executive Chairman of the Board; Larry Gibbs; Eileen McDonnell; Warren Nimetz; Maria Singer; and Dr. Elliot Sussman. Officers of the company are Steve Filton and Chick Boyle. In addition, Scott Hammond, Bill Liva, and Carrie Russell of PricewaterhouseCoopers, our independent auditors, are participating today and available to respond to any questions. Steve Plefka of Computershare, our transfer agent, is participating today and will act as Inspector of Elections as to the Class B and D votes. In order to avoid any confusion, let me take a few moments to outline the format for today's meeting. First, each company proposal will be made and seconded. The Board of Directors' position on each proposal is set forth in the proxy statement, which was made available to all stockholders eligible to vote. Next, we will tally the preliminary votes with regard to each proposal. The polls on our virtual meeting website opened at approximately 9:50 a.m. Eastern Time this morning. Any stockholders who have logged into the virtual meeting web portal using their 15-digit control numbers will be able to make or change their votes electronically until we declare the polls have closed. For the record, as persons appointed in the official proxy, Mr. Filton and Alan B. Miller have voted in accordance with the proxies received from stockholders. Once the votes on all proposals have been tallied and the results announced, the meeting will be adjourned. After the meeting is adjourned, we will attempt to answer as many stockholders' questions as time allows. This meeting will please come to order. I will act as Chairman of the meeting, and Mr. Steve Filton will act as Secretary of the meeting and Inspector of Elections as to the Class A and Class C votes.

Mr. Chairman, I present the affidavits of Computershare and this company with respect to the notification to the company's stockholders of the notice of the meeting, the annual report, the proxy statement and the forms of proxy, which were mailed to Class A and C and to Class B and D stockholders who requested to receive printed proxy materials. I also present the affidavits of the inspectors of elections and the voting certification for the Class A and Class C stock prepared and certified by me as Secretary of the company.

The affidavits, forms of proxy materials and voting certification are directed to be filed with the company's records.

Mr. Chairman, I present the certified list of holders of the company's Class B and D common stock as of the close of business on March 24, 2022. The record date for this meeting, as prepared and certified by Computershare, transfer agent and registrar for Class B and D common stock, and a certified list of holders of the company's Class A and C common stock as prepared and certified by me as Secretary of the company, transfer agent and registrar for Class A and C common stock.

The lists of stockholders are directed to be filed with the company's records.

Mr. Chairman, the transfer agent has computed the number of shares of Class B and Class D common stock represented by the official forms of proxy provided to the Class B and Class D stockholders and the number of shares of such classes present or represented here. I have computed the number of shares of Class A and Class C common stock represented by the forms of proxy provided to Class A and Class C stockholders and the number of shares of such classes present or represented here. For purposes of voting for one director by the holders of Class A and Class C common stock, the holders of a majority of the shares of Class A and C common stock are present or represented here. For purposes of voting for one director by the holders of Class B and Class D common stock, the holders of a majority of the shares of Class B and D common stock are present or represented here. For purposes of voting on each of the other proposals at the meeting, the holders of a majority of common stock votes are present or represented here.

A quorum for all matters is present and the meeting is properly constituted for the transaction of business. As set forth in the notice sent to each of the stockholders, the business of this meeting includes: the election by Class A and Class C stockholders of one member of the Board of Directors and the election by Class B and Class D stockholders of one member of the Board of Directors. Number two, to consider the approval of an amendment and restatement of the company's 2020 Omnibus Stock and Incentive Plan. Number three, the ratification of the selection of PricewaterhouseCoopers as the company's independent registered public accounting firm for the fiscal year ending December 31, 2022. And number four, to act on a stockholder proposal regarding majority vote standard in director elections if properly presented at the meeting. The meeting will now proceed to the election of one director of the company by the holders of Class A and Class C common stock voting together as a single class. We will now accept the nomination for one director to be elected by the holders of Class A and Class C common stock voting together as a single class.

I nominate Mr. Warren J. Nimetz for election by the holders of Class A and Class C common stock to serve as Director of the company for a 3-year term and until his successor has been elected and has been qualified.

I second the motion.

Since there are no other nominations, the nominations are closed. The meeting will now proceed to the election of one director of the company by the holders of Class B and Class D common stock voting together as a single class. We will now accept the nomination for a director to be elected by the holders of Class B and Class D common stock voting together as a single class.

I nominate Ms. Maria Singer for election by the holders of Class B and Class D common stock to serve as Director of the company for a 3-year term and until her successor has been elected and has qualified.

I second the motion.

Since there are no other nominations, the nominations are closed. The meeting will now proceed to the approval of an amendment and restatement of the company's 2020 Omnibus Stock and Incentive Plan by the holders of Class A, C, B and D common stock. We will now entertain a motion for the approval of the amended and restated 2020 Omnibus Stock and Incentive Plan.

I move to approve the amended and restated 2020 Omnibus Stock and Incentive Plan.

I second the motion.

The meeting will now proceed to the ratification of PricewaterhouseCoopers as the company's independent registered public accounting firm for the fiscal year ending December 31, 2022, by the holders of Class A, C, B and D common stock. We will now entertain a motion for the ratification.

I move to ratify PricewaterhouseCoopers as the company's independent registered public accounting firm for the fiscal year ending December 31, 2022.

I second the motion.

As the next order of business, the meeting will now proceed to the stockholder proposal regarding majority vote standard in director elections. The North Atlantic States Carpenters Pension Fund has elected not to make a statement, and the Board of Directors has waived any requirement that the proposal will be formally made and seconded, but that it is deemed made at this meeting. Ed Durkin, a representative of the North Atlantic States Carpenters Pension Fund is available and participating in the meeting. The Board of Directors has recommended a vote against the stockholder proposal regarding majority vote standard and director elections for reasons set forth in the proxy statement.

There are no other matters, Mr. Chairman. If any stockholder logged in via control number would like to ask a question about the proposals, please do so now via the web portal.

The polls are about to close. Any stockholder logged in via control number to our virtual meeting web portal who hasn't yet voted or would like to change his or her vote should do so now by clicking on the voting button on the web portal and following the instructions there. Stockholders who have timely submitted proxies by mail, telephone or Internet or given their brokers voting instructions and do not wish to change their votes, do not need to take any further action. Now that all eligible stockholders have had a final opportunity to vote, I declare that the polls for the 2022 Annual Meeting of Stockholders are now closed. Mr. Filton, do we have preliminary voting results?

With respect to proposal 1, the election of directors, 7,238,788 votes were cast in favor of the election of Warren J. Nimetz and no votes were withheld. 22,474,461 votes were cast in favor of the election of Ms. Maria Singer and 38,738,733 votes were withheld. With respect to proposal 2, the approval of an amendment and restatement of the company's 2020 Omnibus Stock and Incentive Plan, 61,182,662 votes were cast in favor of the approval of the amendment and restatement of the company's 2020 Omnibus Stock and Incentive Plan. 3,312,452 votes were cast against and 3,503 votes were abstained. With respect to proposal 3, the ratification of PricewaterhouseCoopers as the company's independent registered public accounting firm for the fiscal year ending December 31, 2022, 64,628,550 votes were cast in favor of ratification of PricewaterhouseCoopers as the company's independent registered public accounting firm for the fiscal year ending December 31, 2022. 44,555 votes were cast against and 950 votes abstained. With respect to proposal 4, a stockholder proposal regarding majority vote standard in director elections, 5,791,615 votes were cast in favor of the stockholder proposal regarding majority vote standard in director elections, 58,703,868 votes were cast against and 3,134 votes abstained.

Based on that report, I declare that Mr. Warren J. Nimetz and Ms. Maria R. Singer have been elected to serve as Directors of the company for a 3-year term. The amendment and restatement of the company's 2020 Omnibus Stock and Incentive Plan has been approved. The ratification of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2022, has been approved. And the stockholder proposal regarding majority vote standard in director elections has not been approved. The Board of Directors plans to evaluate the Class B and D shareholder vote with respect to Ms. Singer's election to determine if further considerations are warranted. This completes our agenda. Thank you for listening through the legal formalities of the meeting. The Chair entertains a motion for adjournment of the meeting.

I move that the meeting be adjourned.

I second that motion.

All those in favor of the motion, please say aye. [Voting]

All opposed? [Voting]

The motion is carried and the meeting is adjourned. The business affairs of the company were fully discussed in our shareholders' letter and the balance of the annual report. I will be glad to answer any questions which the stockholders may have concerning the business and affairs of the company. Thank you for your attention and attendance.

At this time, the company would like to take any questions you might have for them today. [Operator Instructions]

Steve, do we have any questions presented by stockholders today?

No, there were no questions, Mr. Miller.

We appreciate everyone's participation today at our virtual stockholder meeting. Thank you.

This concludes the meeting. You may now disconnect.