Good afternoon, ladies and gentlemen. Welcome to the 2021 Calava Growers Annual Meeting of Shareholders. I'm Jalenk Levins, Chairman of the Board of Directors. Here with me today are Mr. Steve Hollister, Board Member and Ms.
Kathleen Holmgren, Board Member. Also here with me today are Mr. Jim Gibson, our Chief Executive Officer Mr. Kevin Mannion, our Chief Financial Officer and Mr. Joel Silva, our Corporate Controller and Corporate Secretary.
As we previously indicated in our proxy statement, which was filed on March 1, in response to the COVID-nineteen pandemic, we will only hold the formal business portion of the annual meeting and will not have any management presentations at today's meeting. There will, however, be time for a brief Q and A session at of the meeting. If you wish to ask a question, you can do so by clicking on the Q and A button on your screen. In addition, for anyone who's not yet voted, voting is open until the end of our annual meeting, which you may do either in person or by clicking on the voting button on your screen. The annual meeting will now come to order.
American Election Services has been appointed to serve as the Inspector of Election for this meeting in order to count votes and to deliver the report on the voting results for the 4 proposals to be considered in this meeting. Joel Silva, our Corporate Controller and Corporate Secretary will serve as secretary for the meeting and recording the proceedings. He will now certify that notice of the meeting was properly given and that a quorum is present. Mr. Chairman,
I certify that proper notice of this meeting was given in accordance with California law and Calavo's bylaws pursuant to a proxy statement that was either mailed or provided via the Internet commencing the 1st week of March 2021 to shareholders as of the meeting's record date of February 22, 2021. I also certify that based on information Calavo has received from the Inspector of Election, a majority of Calavo's outstanding shares of common stock as of the meeting's record date are present in person at the meeting or are represented by proxy at the meeting and that a quorum is therefore present in accordance with California law and Calavo's bylaws.
Based on the information received from Mr. Silva and our inspection of election, I declare that a quorum is present at the meeting and that the annual meeting is duly and lawfully convened. The meeting is now open and ready for business. Proposal number 1 is the election of 11 directors of Calavo, each for a term of 1 year. Calavo's Board of Directors recommends that shareholders vote for the reelection of Colavo's current directors, Farah Aslam, Mark Brown, Michael DiGregorio, Harold Edwards, James Halen, Stephen Hollister, Kathleen Holmgren, John Hunt, J.
Link Levins, Donald Sanders and Scott Vanderkart. Is there a motion?
I'm Steve Hollister and I am a shareholder of Calavo. I move that shareholders elect the 11 director nominees named by Mr. Lovens.
Is there a second to this motion?
I am Kathleen Holmgren, and I'm a shareholder of Calavo. I second the motion.
The motion has been duly made and seconded. Proposal number 2 is the ratification in the appointment of Deloitte Touche LLP as Calabrio's independent registered public accounting firm for the fiscal year ending October 31, 2021. Calavo's Board of Directors recommends that shareholders vote for the ratification of the appointment of Deloitte and Touche. Is there a motion?
This is Steve Hollister. I move the shareholders ratify the appointment of Deloitte Touche as Calavo's independent registered public accounting firm for the fiscal year ending October 31, 2021. Is there
a second to this motion?
This is Kathleen Holmgren. I second the motion.
The motion has been duly made and seconded. Proposal number 3 is a shareholder advisory vote to approve the compensation paid to the named executive officers of Calavo as disclosed in Calavo's 2021 proxy statement pursuant to the rules of the Securities and Exchange Commission. Including the compensation and analysis in the proxy statement and the compensation tables and discussion in the proxy statement, Calavo's Board of Directors recommend that shareholders vote for the approval of this proposal regarding executive compensation. Is there a motion?
This is Steve Hollister. I move that shareholders approve the compensation of Calavo's named executive officers as disclosed in the proxy statement.
Is there a second to this motion?
This is Kathleen Holmgren. I second the motion.
The motion has been duly made and seconded. Proposal number 4 for the shareholder approval of the Calavo Growers Inc. 2020 Equity Incentive Plan, which will replace the 2011 management incentive plan that expired in December 2020 and which was approved by the Board of Directors on December 9, 2020. Calavo's Board of Directors recommends that shareholders vote for the approval of the Calavo Inc. 2020 Equity Incentive Plan.
Is there a motion?
This is Steve Hollister. I move that shareholders approve the Calavo Growers Inc. 2020 Equity Incentive Plan.
Is there a second to this motion?
This is Kathleen Holmgren. I second the motion.
The motion has been duly made and seconded. All 4 proposals described in the Calavo's proxy statement have been properly presented and may be voted upon. The Inspector of Elections will deliver a report to Calavo with the results of the voting on the 4 proposals. Within 4 business days after the date of today's meeting and after receiving this report from the Inspector of Election, Kalama will file an 8 ks report with the Securities and Exchange Commission that will disclose the results of the voting on each of the 4 proposals considered at today's meeting. I will now turn the meeting over to Mr.
Silva.
Thank you, Mr. Chairman. We now have time for a few questions. If you wish to ask a question, you may do so by clicking on the Q and A button on your screen. The first question is regarding Board composition and is directed to Mr.
Gibson. There has been some change in the composition of the Board recently. Calavo is still behind in its percentage of independent members and also diversity for what is considered best in class corporate governance. What can you tell us about the company's plans for refreshment?
Thanks, Joel. It is our long term objective to both right size and refresh our board. And in 2020, we made progress towards these goals. Last year, we indicated our intent to reduce the board size from 13 to 9 by 2022. We are currently at 11 board members.
3 of our long standing directors decided not to stand for reelection and Farah Aslam was appointed to the Board. Ms. Aslam was Managing Director and Senior Analyst covering Food and Agribusiness at Stevens from 2004 to 2018. With Ms. Aslam's appointment, we now have 7 board members or greater than 60% who are independent directors.
This is an improvement from a year ago in which we were at 54%. While we will continue our efforts to attract new top caliber members, we're making progress towards a more diverse Board oversight.
Thank you, Jim. Our next question also regards the Board and CEO participation. It's quite unusual for a CEO not to be on the Board. Is Jim joining the Board part of your refreshment strategy?
As I stepped in the position of a CEO last year, we decided that we would separate the Chairman and the CEO roles and we believe that's good governance. I am participating completely in all executive sessions. And as I answered in the previous question, we're working to right size our Board at present.
Thank you. Now I have a question on ESG. ESG is becoming increasingly important to investors. Can you talk about some of your ESG initiatives?
Sustainable business practices have been part of Calavo's corporate culture for decades and we are now taking a proactive approach to communicating our ESG commitment. In 2020, we published our 2nd annual sustainability report, which details our accomplishments and new initiatives across the areas of facilities and operations, people and communities and products and governance. To reflect Calabrio's deep commitment to corporate responsibility, we also formed a separate board committee as oversight to our ESG initiatives.
Thank you, Jim.
We have
a question here about international expansion. Is Calavo looking to expand its business outside the U. S? And if so, is there any plan to invest in international farms like our main competitor?
As you know, we continue to be an asset light model for our fresh business, while we're not anticipating investing in physical assets in international on an international basis. We're adding sales staff and developing relationships to expand our current sales geography outside the United
States. Thank you. We have a question now on capital spend. Can you talk about your capital allocation priorities? You acquired Simply Fresh Fruit last year, but do you think you have an appetite for further M and A?
I think the answer to that is yes. We have a strong balance sheet that provides us with flexibility to pursue strategic acquisitions and we do continue to evaluate opportunities. We have borrowing capacity and are happy to consider combinations that build on our strengths and enable us to better serve our customers. In 2020, we also announced our 19th annual cash dividend, which is also our 9th consecutive year of increased dividends.
I believe our yield is about 1.6%.
Our CapEx will continue to be around $15, 000, 000 to $18, 000, 000 per year focusing on supply chain efficiency and continuous improvement in manufacturing. We intend to maintain our growing dividend and investing to grow our business, which will benefit shareholders.
Thank you, Jim. We have 1 last question about executive management. This is the 1st year leading Calavo for both Jim and Kevin. Maybe you can tell us when you look back 5 years from now, what do you hope to have accomplished as leaders of the organization?
I think we're oriented on making continued progress on the 5 pillars of 1 consolidated integrated company, a human capital plan, transparency, ESG and financial growth, as I discussed in our first earnings call last June and are the foundation for our next phase of growth. All these pillars are items that Calabrio will continue to work on as there is never an ending point. It is always a continuous improvement effort from day to day to year to year.
Thank you very much, Jim. This concludes the question and answer portion of the meeting. I will now turn the meeting over back to Mr. Levins.
This concludes the formal matters to be acted on the annual meeting. At this time, voting is now closed. Since there is no further business to come before the meeting, it is in order to adjourn the meeting. Is there a motion?
This is Steve Hollister. I move that we adjourn the meeting.
Is there a second to the motion?
This is Kathleen Holmgren. I second the motion.
It has been moved and seconded that the meeting adjourn. All in favor say aye. Aye. Those opposed, no. Motion is carried.
This meeting is adjourned and thank you for all your support.