I attended the Alphabet Inc. Annual Meeting today. This is the last virtual annual meeting I’ll be able to attend as a shareholder for this season. The next one will be Procter & Gamble’s, which usually takes place in October.
First Time Virtual
Alphabet’s meeting started at 12:00 noon EDT. This was the first time Alphabet held its annual meeting in the virtual-only format, a decision they made before printing and mailing the Proxy Statement. In the past, they held the meeting in person with a simultaneous webcast (not to be confused with a “hybrid” meeting where virtual participation (with the ability to vote and ask questions remotely) is available at the same time as the in-person meeting).
The Proxy Statement said:
This year’s Annual Meeting will be accessible through the Internet only. We have adopted a virtual format for our Annual Meeting to make participation accessible for stockholders from any geographic location with internet connectivity. We have worked to offer the same participation opportunities as were provided at the in-person portion of our past meetings while further enhancing the online experience available to all stockholders regardless of their location.
Sounds like a hint that next year’s meeting with be a hybrid one. Shareholders better pray that the company isn’t going to continue the virtual-only format because the breakfasts at the Alphabet annual meetings have become famous!
If You Can’t Get In, Watch It on YouTube!
Both record and beneficial holders needed only the 16-digit control number from the proxy materials they received in advance to enter the meeting. Getting in was easy. Non-shareholders were directed to the company’s Investor Relations channel on YouTube to listen to the annual meeting as guests. This is different from other meetings where a non-shareholder can log in to watch as a guest from the same virtual meeting landing page. Since Alphabet owns YouTube, it makes sense that they would stream the guest webcast through that platform.
The meeting’s landing page had most of what you would expect, like the “Vote Here!” button and question submission box. They posted the Annual Report and Proxy Statement, but not the Agenda or Rules of Order like most companies do. I submitted a question asking “Where can I find the Rules of Order for today’s meeting?” and included my name and Gmail address, but I never received a response.
Registered Shareholders List
For this meeting, I made a point of looking for the Registered Shareholders List. A link was on the page… in super tiny print at the bottom right-hand corner of the screen, right above “Browser Test,” “Privacy Statement,” and “Terms of Use & Linking Policy.” I clicked on the link, which popped up a window that gave me a choice of “Registered Shareholders List Group 1.” I clicked that and got to another window that said:
Attestation
[ ] By checking this box, you attest that you are a shareholder of record for this company and therefore legally permitted to view this information under RELEVANT shareholder meeting LAWS. You further attest that the information provided by you below is accurate and complete.
The window had spaces to provide name and address and also “Reason.” Why does the company need to know the reason a record shareholder wants to look at the list before giving it to him/her? The Delaware law provision that requires the company to have available at the meeting an alphabetical list of all stockholders entitled to vote states, “[s]uch list shall be open to the examination of any stockholder for any purpose germane to the meeting.” Since I’m a beneficial holder, not a record holder, of Alphabet stock, I didn’t get to the next page, so I don’t know whether someone on the other end was going to determine whether the reason I would have given was germane to the meeting.
The Proceedings
The meeting kicked off with a sleek feel-good video—one of those corporate advertisements designed to elicit that warm and fuzzy feeling you get from seeing people doing good in the world. (At my old company, we had tons of this kind of footage, much of it featuring mothers and babies, and it always warmed up the crowd better than chestnuts roasting on an open fire and flannel pajamas!)
Captioning
One nice feature of Alphabet’s virtual meeting site was a “Captions” box right below the main visual media box. English-language captions flowed in that box throughout the meeting in ALL CAPS. However, at some point the captions got a few seconds ahead of the audio, so it was kind of strange to be able to read the words quite a bit before they would come out of the speaker’s mouth. That’s a technical issue that the service provider should be able to fix for next time. It was nice to see Alphabet make sure that shareholders with hearing impairments could follow the spoken words in real-time. (I have heard of companies that used signers at their in-person meetings, but very few.)
Introduction and Business Presentation
After the video, the Chairman made some introductory remarks. He said all director nominees were in attendance remotely, and the company’ CEO, Chief Legal Officer, two heads of People Operations, and Chief Health Officer were on hand to speak and answer questions. The Chairman outlined the meeting agenda and then handed the floor to the CEO for the company’s business presentation, which lasted for about 10 minutes.
After the CEO’s presentation, the Chief Health Officer came on to highlight how Alphabet is assisting governments and global public health authorities' efforts to manage the Covid-19 pandemic. She spoke for about five minutes, and then the Assistant Secretary came on the line to call the meeting to order, announce that the polls were open and when they would close, and go through the items of business.
Formal Meeting
The Assistant Secretary, acting as secretary for the meeting, called the formal meeting to order at 12:24 p.m. EDT and handled the entire formal business portion of the meeting by herself. I don’t think the Chairman ever spoke during the formal meeting. There’s nothing wrong with that. I’m just used to seeing/hearing the chair call the meeting to order, run the meeting and ask the secretary to handle certain portions, and adjourn the meeting. Having one person run the whole thing probably made it more efficient. (And who better to run the whole meeting than the secretary!?!) The Assistant Secretary quickly went through the election of directors, ratification of the appointment of independent auditors, approval of management’s proposed amendment to the stock plan to increase the Class C share reserve, and Say on Pay. She then proceeded to the 10 (yes ten!) shareholder proposals.
Each shareholder proponent was given three minutes to present. Quite a few of them had sent pre-recorded messages to play. None of the proponents needed the full three minutes. Some familiar proponents included John Chevedden and Jim McRitchie. The Assistant Secretary gave the company’s pre-scripted responses to each proposal. After the proposals were done, she reviewed the preliminary voting results:
The director nominees were duly elected (this would be by a plurality of the votes cast since Alphabet doesn’t have a majority vote standard for director elections);
The ratification of appointment of auditors, stock plan amendment, and Say on Pay were approved, each by at least a majority of the votes cast; and
None of the 10 shareholder proposals received a favorable vote of a majority of the votes cast.
That’s it. Just pass-fail. No percentage breakdown for any of them. The Assistant Secretary said that they would post the final results on the Alphabet IR page and also file them, as required, on a Form 8-K within four business days. I’m eager to see whether those reports go into any more detail.
I was surprised by this barest of bare minimum treatment of the preliminary voting results. As is widely-know, Alphabet has a multi-class equity capital structure where each Class A share (the ones you and I can buy) is entitled to one vote, each Class B share is entitled to 10 votes, and Class C shares have no voting rights, resulting in all executive officers and directors as a group having total voting power of 52.8% as of the record date. Obviously, there was no chance of any kind of adverse or embarrassing voting outcome for the board and management. So, why not just give the percentage breakdowns like most of the big boys and girls do? It’s as easy as ABC!
Q&A
You’ll recall my discussion in a previous post about how the company cannot tell who has submitted a given question and thus has no way of providing the shareholder an answer, except during the Q&A period, unless the shareholder gives their contact info along with their question. Alphabet announced that shareholders could submit questions during the meeting through the question box on the screen, but they did not specifically tell people to include a name or some way of contacting them. I decided to run a few tests:
I asked, “When will you get rid of the dual-class structure or make voting rights equal for Class A and Class B?” and made sure to include my name and Gmail address.
I also asked, “Will Alphabet re-incorporate as a b-corp to demonstrate commitment to all stakeholders and not just maximizing stock price?” but didn’t include my name or contact info in hopes that they’d answer it during the Q&A session.
As I mentioned above, I had already asked where I could find the Rules of Order and included my name and Gmail before I clicked “Submit.”
The company announced that they were allotting "approximately 20 minutes" for the general Q&A session, telling the audience that they would skip over any questions about matters covered during the formal business portion of the meeting, group and answer questions that were substantially similar, and paraphrase questions instead of reading them word-for-word. Then, they proceeded to read and answer a total of eight questions and ended the Q&A session and signed off after 16 minutes.
None of my questions were answered during the Q&A session. Multi-class stock was the subject of one of the shareholder proposals, so I wasn’t going to get an answer on that one, but I was hoping for something during the Q&A or by Gmail. As of the time of this post (8:42 p.m. EDT, June 3, 2020), I haven’t received answers to any of my questions via Gmail. (I will update this when I do.)
Comments