Welcome to the twenty twenty Badger Meter Virtual Shareholder Meeting. I'm going to turn the call over to Ken Bachhorst, Chairman, President and CEO.
Good morning, and welcome to the virtual annual, meeting of shareholders of Badger Meter Inc. I am Ken Bachourst, Chairman of Badger Meter's Board of Directors. I'd like to introduce the other continuing members of the Board of Directors of Badger Meter Inc, who are all on the line with us today. Todd Adams, president and CEO of Rexnord, Gail Clappa, executive chairman of WEC Energy Group, Gail Leone, senior counsel at Dentons and adjunct professor of intellectual property law at Georgetown University School of Law, Jim McGill, retired executive, Eaton Corporation Tessa Myers, president, North America, Rockwell Automation Jim Stern, executive vice president, general counsel, and secretary of A. O.
Smith Corporation and Glenn Telok, president and CEO of Lakeside Foods. I wanna recognize Tom Fisher and Todd Teske, who after long and distinguished service to our board are not standing for reelection today. On behalf of the management team and the board, we greatly appreciate your years of guidance and counsel. Also on the line today is Kevin Clamara, partner with Ernst and Young LLP, the independent registered public accounting firm that audited the company's financial statements for the year ended 12/31/2019. Finally, various members of the leadership team are participating in today's meeting, including Bob Rockledge, Senior Vice President and CFO Bill Bergam, Vice President, General Counsel and Secretary Dan Weltzin, Vice President and Corporate Controller and Karen Bauer, Vice President, Investor Relations, Corporate Strategy and Treasurer.
As is our custom, we will conduct the business portion of the meeting first, then provide brief comments about the state of the business, and finally answer questions at the end of the meeting. It is now shortly after 08:30AM central time on 04/24/2020, and this meeting is officially called to order. I direct that a copy of the notice of annual meeting and affidavit of mailing be filed with the minutes of the meeting. Dan Waltzine, Badger Meter's vice president and controller, is appointed as the inspector of election for the meeting. A majority of shareholders have voted by proxy prior to this meeting.
Those shareholders who have voted do not need to take any further action with respect to the matters being voted on today. The online voting mechanism may be used if you have not voted or if you wish to change your previous election. Inspector, do we have a quorum?
Yes. We have a quorum. There were 29,113,211 total shares outstanding and entitled to vote as of 02/28/2020, the record date for the meeting. 26,426,887 of those shares, or 90.8%, are represented by proxy at this meeting and constitute the preliminary voting results.
Since more than a majority of the outstanding voting securities of the company are represented by proxy, I declare a quorum to be present. The next order of business is to review the various matters to be voted on at today's meeting as outlined in the company's proxy statement, which accompanied the notice of this meeting. The polls are now open, and voting will remain open while the proposals are discussed. I will walk through each of the four items in order. First is the election of directors.
The board of directors currently consists of 10 members. However, two of those members are not standing for reelection. The following eight individuals, all of whom are currently directors, have been nominated for election. Todd a Adams, Kenneth c Bockhorst, Gail e Clappa, Gail a Leone, James w McGill, Tessa m Myers, James f Stern, Glenn e Telok. Since no other nominations for directors have been received, I declare the nominations closed.
The second item on the proxy ballot is an advisory vote to approve the compensation of the company's named executive officers. The third item on the proxy ballot is the ratification of the appointment of Ernst and Young LLC as Badger Meter's independent registered public accounting firm for the period ending 12/31/2020. The fourth and final item on the proxy ballot is the shareholder proposal regarding employee represent representation on the board of directors. The chair recognizes Mari Schwarzer of NorthStar Asset Management who is on the line to present the proposal. Note that a copy of the rules of conduct for the Badger Meter annual meeting was provided to NorthStar Asset Management.
Per those rules, you have three minutes with which to discuss the proposal. Go ahead, miss Schwartzer.
Good morning. Thank you very much. My name is Mari Schwartzer of NorthStar Asset Management, a socially responsible investment firm based in Boston and the beneficial owner of 41,066 shares of Badger Meter common stock. Today, I'm presenting the shareholder proposal regarding employee representation on the Board of Directors. Never before have our company or our employees faced such uncertainties or such a grim prospects for the future as posed by the global the current global pandemic?
As our company works to navigate these unpredictable times, employees and their relationship to our company can be the guiding force that allows us not only to emerge safely, but also stronger and more competitive. This shareholder proposal encourages the company to explore the ways in which nonmanagement employees could attain membership on the board of directors because we believe that all employees are critical to our company's continued success and deserve a voice. We also believe that employees with a seat at the table are more likely to remain engaged and committed to the company. This time of crisis does not diminish the potential value of adding employees to the board. In fact, crises and transformative eras emphasize the potential value of fresh voices on the board of directors.
Direct employee communication with the board could offer significant efficiencies as our company and the economy seek innovative solutions to these unprecedented challenges. The existence of employees on US corporate boards is not unheard of. Several other several other publicly traded US companies have had or currently have workers on the board of directors. We believe that employees on the board of directors could help our company continue to thrive through more efficient communication of problems faced by employees and the creative solutions that those workers come up with, faster alerts to potential pending crises that could diminish our brand name, increased employee engagement and better retention, expression of employee assessments of managers, executives, and workforce morale directly to the board and much more. Our employees are the driving force of our company, but if their trust in management falters due to disenfranchisement or missteps, our company may suffer.
To prevent this, we suggest allowing an encouraging representation on the board by nonmanagement, nonexecutive employees. We believe that employee representation on the board is a key way to ensure that employees, are most crucial resource, remain fully engaged in the long term growth of our company, and help to ensure operational excellence. We urge shareholders to vote for the shareholder proposal regarding employee representation
on the
board of directors. Thank you.
Thank
you, miss Schwartzer. We appreciate your engagement with the company. As to the proposal, the board's response in opposition is included on page 32 of the printed proxy, and we recommend that you vote against this proposal. I will now pause for a moment to allow for any voting. The polls are now closed.
Will the inspector of elections please read the voting results?
Based on the preliminary voting results, all eight directors have been duly elected for one year terms. Stockholders approved the compensation of our named executive officers. Stockholders ratified the appointment of Ernst and Young LLC as the company's independent registered public accounting firm for 2020. And finally, stockholders did not approve the shareholder proposal regarding employee representation on the board of directors. Final vote totals will be included in an eight k filing with the SEC made within four business days after this meeting.
There being no other topics on this year's ballot, this concludes the formal business portion of the meeting. The formal meeting is adjourned. I will now make a few brief remarks regarding the state of operations of Badger Meter. Following these remarks, we will hold a q and a session. This session will be moderated by Karen Bauer, Vice President of Investor Relations, Corporate Strategy and Treasurer.
There is a Q and A function within the virtual meeting webcast tool. Karen will read each question submitted and directed to the appropriate individual. Out of consideration for others, please limit yourself to one question, and please keep all questions relevant to the company and its business. Karen may combine questions that are of a common nature, topic, or category. If we're not able to address all questions in the time we have today, we will post answers to those questions on our website within a few days after this meeting.
Let me start by saying on behalf of the board and the management team, we hope all of you are safe and healthy. As we face this unprecedented global crisis, we are reminded of the criticality of the water industry. As an organization, we mobilize quickly to adapt to the various government orders, social distancing procedures, cleaning protocols, and other steps to keep employees safe while fulfilling our critical and essential customer requirements. As we noted in our earnings conference call last week, we were pleased with the record result results across all financial metrics in the first quarter, but like many other industries, over overall activity in the end markets we serve is beginning to slow. Customers have started to signal potential project delays, deferral of orders, and channeled inventory destocking.
Somewhat dependent of demand levels, there is also the potential for modest supply disruption, cargo capacity constraints, and related shortages of the components over the next several months. Given these indicators, we implemented temporary cost containment actions, including reductions in discretionary spending, reduced work hour furloughs, and executive salary reductions. We are monitoring the rapidly changing environment and have multiple contingency plans to appropriately react under a wide range of economic scenarios. It is obviously difficult to predict the the ultimate impact of this pandemic on the economy or our business. However, we do know that we just completed a record first quarter, that our bid pipeline is strong, and that our innovative product solutions have been gaining traction.
In addition, we believe two likely long term trends coming out of this pandemic will favor our solutions, including an accelerated transition to automated meter reading adoption and remote actuated flow restriction technology. Our balance sheet is rock solid with $70,000,000 of cash and a 125,000,000 of revolver capacity. We are well positioned to emerge from this crisis as the financially strong innovation leader that we have always been and build on our exceptional one hundred fifteen year legacy. In closing, I wanna thank all of my Badger Meter colleagues across the globe for their commitment to our customers and for their adaptability and resourcefulness as we navigate these truly unprecedented times. I will now ask Karen to moderate the Q and A.
Go ahead, Karen.
Thank you. Our first question reads as follows: Mr. Chairman, the recent growth in the size of passive mutual funds corporate ownership interest in U. S. Corporations has been dramatic.
The Carpenter Funds believes the growing concentration of ownership raises important public policy and corporate governance issues. Currently, BlackRock holds 15.7% and Vanguard holds 11.7% of the company's outstanding shares. Our review indicates that Vanguard manages a portion of the assets of the company's four zero one plan. Does the Board see this growing ownership concentration as a positive or negative development as regards to long term corporate planning and performance? And also, are there potential conflicts of interest when a 5% holder is managing company retirement plan assets?
Okay. So on on the, the point of the conflict of interest, I don't feel that's the case as we have a separate separate benefit committee with outside advisers that help us select funds. Our participants direct their own investments, and we're mere merely providing as many options as we think are beneficial for our employees. As for the rise in passive, investing, that's a trend that that, frankly, we don't control and, have had no impact on our business.
Our next question reads as follows. Mr. Chairman, the Carpenters Union pension funds with combined assets of $70,000,000,000 have a collective ownership position of 621,110 shares of the company's common stock. We have been energetic support of a majority vote standard for director elections that provides shareholders a meaningful vote in this critical accountability event. Could you indicate if the board has considered the adoption of a majority vote standard?
Yeah. So a a little bit about how how we do this. So we do have a plurality standard. The board has discussed but not adopted a a majority standard. However, we did adopt an amendment to our bylaws several years ago that requires a director to submit a letter of resignation, to the board for its discretionary consideration if, a certain director receives more withhold than four votes.
This is an issue that the board will continue to discuss in the future, but that's our our current position.
There are no further questions.
That, this concludes today's meeting. Thank you for your participation. If you have any follow-up questions, please feel free to reach out to Karen. Please stay safe and healthy.