Virtual annual meetings the new normal

What seemed unusual a year ago will become the norm this year because of COVID-19.


  • By Mark Basch
  • | 5:10 a.m. April 2, 2020
  • | 5 Free Articles Remaining!
“Not surprisingly, we will be using an online, virtual meeting format again this year to facilitate expanded shareholder access and participation,” said CSX CEO Jim Foote.
“Not surprisingly, we will be using an online, virtual meeting format again this year to facilitate expanded shareholder access and participation,” said CSX CEO Jim Foote.
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Just three weeks after filing a proxy statement for its annual meeting at the Ponte Vedra Inn & Club, Regency Centers Corp. changed course.

The Jacksonville-based shopping center developer announced March 30 that instead of inviting shareholders to the resort’s conference facilities, it will instead hold the meeting online “due to the emerging public health impact of COVID-19 and to protect the safety of participants.”

A year ago, it seemed like an unusual step when CSX Corp. decided to hold an online -only annual meeting, a policy opposed by shareholder rights advocates.

While companies say shareholders are given the same access to management and board members through the internet that they would have in a normal meeting, shareholder advocates argue it doesn’t have the same impact of meeting officials face-to-face.

However, in the new COVID-19 reality, virtual annual meetings likely will become the norm this year.

Last year, CSX told the Daily Record and Record & Observer its virtual meeting would allow access to shareholders anywhere in the world “while substantially reducing the costs associated with hosting an in-person meeting.”

CSX has again scheduled a virtual meeting but this year, the Jacksonville-based railroad company doesn’t really have to explain why it makes sense.

“The world is facing unprecedented disruption caused by COVID-19. In addition to the significant health and safety impact that individuals are experiencing, we are also sensitive to the fact that this disruption has negatively affected our stakeholders,” CEO Jim Foote said in a letter to shareholders in last week’s proxy filing.

“CSX is continuing to respond to this global crisis through comprehensive measures to protect our employees while fulfilling our vital role in the nation’s supply chain,” he said.

“Not surprisingly, we will be using an online, virtual meeting format again this year to facilitate expanded shareholder access and participation.”

Regency will hold its virtual meeting April 29. CSX’s meeting is May 6.

Tegna confirms it is in buyout talks

Tegna Inc. broke its silence on continued reports about buyout offers, announcing March 29 it “received four unsolicited acquisition proposals in recent weeks.”

The television broadcaster, without naming any bidders, said it engaged in discussions with two of the parties “before the recent market dislocation due to the COVID-19 pandemic and both subsequently informed Tegna that they were ceasing discussions.”

Tegna said the other two parties did not sign confidentiality agreements to receive due diligence information and haven’t given any information on financing.

The company said it “does not intend to update this disclosure.”

Tegna owns 62 U.S. television stations, including Jacksonville NBC affiliate WTLV TV-12 and ABC affiliate WJXX TV-25.

Reports from major financial news services said that Gray Television Inc. withdrew its offer for Tegna early in March. 

After Tegna’s announcement, Bloomberg News reported Apollo Global Management was the second company to drop out.

Private equity firm Nafaji Cos. and religious broadcaster Trinity Broadcasting Network announced a joint bid for Tegna on March 17.

News reports have said television producer Byron Allen is the other interested party.

Tegna’s stock fell as much as $3.60 to $9.61 on Monday morning after issuing its news release Sunday night, March 29. 

That was the lowest price since Tegna split up with newspaper publishing business Gannett Co. in 2015.

Rayonier Chairman Richard Kincaid dies

Rayonier Inc. last week said board Chairman Richard Kincaid died unexpectedly March 20.

Kincaid, 58, had served on Rayonier’s board since 2004 and became chairman when the real estate and timber company split up with performance fibers company Rayonier Advanced Materials Inc. in 2014.

Kincaid was a real estate executive and most recently founder and CEO of Sage Vertical Gardens LLC, a company that designs “living walls” of plant life for offices and homes.

Rayonier appointed Dod Fraser, a director since 2014, to succeed Kincaid as chairman. Fraser is president of consulting firm Sackett Partners.

Rayonier curtails Canada production

Jacksonville-based Rayonier Advanced Materials last week said it curtailed production at seven Canadian softwood sawmills and newsprint plants for at least two weeks in response to the COVID-19 outbreak.

The company said its high purity cellulose facilities in the U.S., Canada and France are remaining open because they are considered “essential businesses” producing raw materials for pharmaceutical, food and cleaning products.

CEO Paul Boynton said in a news release its production includes “key raw materials to state agencies to produce hand sanitizer due to severe supply constraints for this product.”

Rayonier AM had been struggling before COVID-19 with depressed commodity prices affecting its results. The company reported a loss from continuing operations of $119 million in 2019.

The company did not say how the shutdown of the Canadian plants will impact its financial results.

Shoe Carnival earnings rise

Like other retailers, Shoe Carnival Inc.’s 392 brick-and-mortar stores are closed because of COVID-19.

But the footwear chain controlled by former Jacksonville Jaguars owner Wayne Weaver last week reported strong fourth-quarter results.

Total sales for the fourth quarter ended Feb. 1 rose 2.2% to $239.9 million and comparable-store sales (sales at stores open for more than one year) rose 3.2%.

Earnings grew to 24 cents a share, up from 9 cents in the fourth quarter of fiscal 2018.

Shoe Carnival’s full-year earnings of $2.92 a share, up from $2.45 in fiscal 2018, beat its own forecasts.

The company had been projecting earnings of $2.77 to $2.83 a share but upgraded the forecast to $2.85 to $2.89 when it announced third quarter earnings in November.

Because of the uncertainty surrounding COVID-19, Shoe Carnival said it is not providing earnings forecasts for fiscal 2020. But CEO Cliff Sifford said the company is in a good financial position.

“From a corporate standpoint, our strong balance sheet and prudent expense management provides us the financial flexibility to keep our steady footing during this challenging economic time,” Sifford said in a news release.

“In addition, our long-standing vendor relationships and proven history of good inventory management enables us to remain agile. These are both critical attributes in a dynamic environment,” he said.

Weaver is chairman of the Evansville, Indiana-based company and the largest shareholder. His family controls about 34% of the stock.

SunTrust analyst upgrades FIS

SunTrust Robinson Humphrey analyst Andrew Jeffrey lowered his earnings estimates March 30 for Fidelity National Information Services Inc., or FIS.

However, Jeffrey raised his rating on FIS from “hold” to “buy,” saying the Jacksonville-based company is better positioned than other financial technology companies to withstand a COVID-19 recession.

FIS last year expanded its merchant payment technology business by acquiring Worldpay Inc. However, the company still gets almost two-thirds of its revenue from its financial institutions and capital markets technology segments, Jeffrey said in his report.

“These two segments will prove materially less cyclical than Merchant, in our opinion,” he said.

“Further, we believe legacy Worldpay is at least as well insulated from demand destruction as any other publicly traded processor,” with much of its business coming from big box retailers and e-commerce, he said.

FIS’ stock rose $5.19 to $125.19 on March 30 after Jeffrey’s upgrade, but the stock still is below its record high of $158.21 in February before the market meltdown.

Jeffrey set a $140 price target for the stock.
 

 

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