Welltower Inc. (WELL) Earnings Call Transcript & Summary

Good day, and welcome to the Welltower Inc. Annual Meeting of Shareholders. I would now like to turn the conference over to Tom DeRosa. Please go ahead.

Good morning. This is Tom DeRosa, CEO and Chairman of the Board of Welltower. I would like to welcome you to the Annual Meeting of Welltower Shareholders. I now formally call the meeting to order. First and foremost, I hope all of you and your families are safe and healthy, appreciating that this is by far the most important consideration during this extraordinary period. Our agenda this morning includes remarks from me about Welltower's business and then we will conduct the formal business section of the meeting. As you are aware, today's virtual-only meeting is a live webcast. We believe it is important to engage with our shareholders. And in light of the ongoing developments related to COVID-19, we hope that this virtual meeting will maximize participation regardless of location while safeguarding the health of you, our shareholders as well as our directors and management team. Thank you very much to those who are participating in our meeting today and for those who submitted questions in advance. I would like to now introduce our Board of Directors who are attending our meeting today: Jeff Donahue, our Lead Independent Director; Ken Bacon; Dr. Karen DeSalvo; Sharon Oster; Serge Rivera; Johnese Spisso; Kathryn Sullivan; and Scott Trumbull. I would also like to recognize Scott Trumbull, who will be retiring from the Board following the conclusion of this meeting after over 20 years of service. On behalf of the Board and the management team, I thank Scott for his service and guidance to the company. I would also like to introduce Shankh Mitra, Vice Chair, Chief Operating Officer and Chief Investment Officer; Tim McHugh, Chief Financial Officer; and Matt McQueen, General Counsel and Corporate Secretary, who have joined me today along with several other members of our management team who are listening in. Frank Maselli and Dave Bryson, representatives of Welltower's independent registered public accounting firm, Ernst & Young, are also present. Finally, I would like to introduce Mr. Peter Descovich from Broadridge, who has been appointed by the company to act as the inspector of election. In 2019, Welltower achieved a number of milestones that highlighted our strategy of positioning our residential care assets as well as our medical office and ambulatory care buildings as critical partners to achieving the broader value-based health care goals of improving the quality of health care delivery while reducing costs. New and innovative partnerships forged with health systems, health insurers, clinical service providers and technology companies announced during the year serve as examples of the viability of this strategy. We continue to advocate for a health care delivery system that includes a true focus on wellness and the social determinants of health, such as nutrition, hydration, hygiene, safety and community. For at-risk populations, such as seniors with multiple chronic health conditions, ensuring that these basic daily wellness needs are met is a growing, ever more important responsibility of Welltower's operators. Welltower believes that modern purpose-built residential care [ settings ] that are designed to efficiently and effectively address these needs are critical to maintaining the health and wellness of the rapidly growing "80-plus year old" population. Of course, the introduction of the novel coronavirus known as COVID-19 in recent months and the resulting pandemic have posed significant pressing challenges for our health care system and our business but also for the global economy and broader society. The spread of the virus by asymptomatic carriers enabled it to move rapidly through densely populated environments before we learned social distancing was the only effective near-term way to mitigate the spread. Seniors with multiple chronic conditions are particularly vulnerable to any virus such as COVID-19 or influenza. And our operators have implemented strict, time-tested protocols for flu and infection control. That said, the high level of personal care delivered to residents in senior living communities, combined with a virus that spread while residents, their families and care staffs were asymptomatic, has challenged even the most vigilant infection control protocols of our operating partners. COVID-19 will continue to pose challenges for our business in the near term. Thus, Welltower has taken numerous steps to improve its liquidity position and support its operating partners through this extraordinary period. Specifically, we are sourcing and distributing much needed personal protective equipment and testing resources. Our focus remains on supporting our operators, post-acute care and health system partners and tenants through this unprecedented period so that we can continue to execute on our strategy of reimagining and redeveloping a health care infrastructure that can better meet the needs of an aging population. Importantly, due to the proactive steps we have taken to navigate this challenging environment, Welltower has enhanced its ability to withstand current capital market volatility. The financial impact of COVID-19 on our business will be discussed in our first quarter 2020 earnings release on May 6 and earnings call on May 7. Before we move to the formal business of today's meeting, I would like to call your attention to the rules of conduct which are in place to ensure a fair and orderly meeting for all shareholders. You can access the rules of conduct in the meeting materials section of the meeting website. We appreciate your cooperation in observing the rules throughout the meeting. Thank you all for joining us today. Now on to the formal business of today's meeting. The Board has appointed Broadridge Financial Solutions to act as the independent inspector of elections for today's meeting. The inspector has taken and signed the inspector's oath, which will be incorporated into the minutes of today's meeting. The Board of Directors set March 3 as the record date for this shareholders' meeting and the inspector of elections has provided an affidavit attesting to the fact that the proxy materials were mailed to all shareholders of record on or about March 20, 2020. The notice of meeting and the affidavit will be incorporated into the minutes of this meeting. We were informed by the inspector of elections that a majority of the company's voting shares are represented here today. A quorum is present and the meeting may proceed. It is now 10:08 Eastern time, and the polls are now open. [Voting]

At this meeting, shareholders are being asked to vote on 3 matters. The Board recommends that you vote for the election of each director and vote for each of the other 2 proposals. You can find more information about these proposals in the proxy statement, which you can access along with our annual report in the meeting materials section of the meeting website. We will close the polls on all matters shortly. Many shareholders have already submitted their proxies. If you have not voted or wish to change your vote, please do so now, clicking on the vote here link on the meeting website. If you have already voted and do not wish to change your vote, you need not take any further action. The first item of business today is the election of 8 directors to hold office until the next Annual Meeting of Shareholders. The Board of Directors has proposed Mr. Bacon, Mr. DeRosa, Dr. DeSalvo, Mr. Donahue, Ms. Oster, Mr. Rivera, Ms. Spisso and Ms. Sullivan be so elected. The second item of business is the ratification of the appointment of Ernst & Young LLP as independent registered public accounting firm for the year ending December 31, 2020. The third and final item of business today is the approval on an advisory basis of the compensation of our named executive officers. It is now 10:10 a.m. Eastern Time, and the polls are now closed. I will now call upon our inspector of election for his preliminary report as to the voting results. Based on the preliminary review of the votes, the inspector of elections has informed me that each director has been elected, and each of the other proposals has been approved. This concludes the formal business of the meeting. We plan to publicly announce the official voting results after all the verifications have been completed by our inspector of elections. Following this meeting, our inspector of elections will furnish a written report of the final vote count with respect to the matters voted on today, which will be included in the minutes of the meeting. At this time, the legal portion of the shareholder meeting is now adjourned. I will now open the meeting to questions asked in advance per our rules of conduct.

Thanks, Tom. This is Matt McQueen, the General Counsel, and we received a few questions from shareholders. Two of these questions related to the process of recommending our company's Board and independent auditor, which can be found in our proxy distributed to our shareholders and available on our website, as Tom mentioned. The final question is related to how the company has addressed COVID-19, which our Chairman addressed in his opening remarks. No other questions have been submitted per the rules of conduct.

Thank you. Seeing no additional questions, this concludes today's meeting. Thank you, everyone, for attending Welltower's annual meeting. And as always, thank you for your continued support.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.