Welcome to the annual meeting for Grocery Outlet Holding Corp. Our host for today's call is Eric Lindberg, Chairman. I will now turn the call over to your host. Mr. Lindberg, you may begin, sir.
Thank you, Paul. Good afternoon. I want to welcome you all to the 2026 annual meeting of stockholders of Grocery Outlet Holding Corporation and call this meeting to order. I'm Eric Lindberg, Chairman of the Board of Directors of Grocery Outlet. In accordance with our bylaws, I'll be acting as chairman of this meeting, along with my fellow members of the board and executive officers of the company. I'd like to thank you for your attendance, your interest, and most importantly, your support of Grocery Outlet. As you're aware, we are holding this meeting virtually. Stockholders may submit questions and vote during this meeting in the space provided on the virtual meeting screen. Please submit any questions in the field provided in the virtual meeting website at any time during the meeting.
We'll answer appropriate questions about any of the proposals set forth in the agenda if we received them in time of the presentation of the latest proposal. Following the meeting, we'll respond to questions relevant to the company from stockholders or proxy holders. Please note that the rules of conduct and procedures for the meeting are posted on the virtual meeting website. I would like to now introduce Jason Potter, President and Chief Executive Officer, who will introduce our board members and certain members of our management team. After introducing the directors and officers in attendance and dealing with a few procedural matters, we'll take up the proposals to be voted upon. Jason?
Thank you, Eric. In addition to the two of us, I'd like to introduce you to and welcome other members of our board of directors present at today's meeting. With us, we have Frances Allen, Jeb Bachman, Mary Kay Haben, Carey Jaros, Michael Kobayashi, Chip Molloy, Felicia Thornton, and Jeffrey York. As indicated in our proxy filing, Gail Moody-Byrd and Erik Ragatz will not be standing for re-election this year. We would like to thank both Gail and Erik for their many years of service and contributions on the board. I'd also like to introduce you to other members of our management team that are present here today. Christopher Miller, our EVP and CFO, Ian Ferry, our SVP, Strategic Finance, Investor Relations, and Treasurer, Andrea Bortner, our EVP and Human Resource Officer, and Luke Thompson, our EVP, General Counsel, and Secretary.
Mr. Thompson will act as secretary of the meeting today. In addition, I'm pleased to welcome Nathan Mitchell, a partner at Deloitte & Touche LLP, our independent registered public accounting firm. Mr. Mitchell is available to respond to appropriate questions. I'll now turn the meeting back to Eric to introduce our Inspector of Elections.
Thanks, Jason. I'd like to introduce to you Lu Larson, a representative of Broadridge Financial Solutions, who has been appointed by the board to act as Inspector of Elections for the meeting. He has previously taken his oath as our Inspector of Elections. Mr. Thompson, would you please report on the proof of notice of meeting?
I have an affidavit of mailing from Broadridge Financial Solutions certifying that notice of this meeting was duly given and that Broadridge commenced distributing such notice to stockholders on April 21st, 2026. The notice of meeting and the affidavit of mailing, together with the proxy card, proxy statement, notice of internet availability, the annual report for fiscal year 2025, and the oath of Inspector of Elections will be filed with the minutes of this meeting.
Thanks, Luke. The secretary has a list of the holders of record of common stock of the company as of close of business on April 7th, 2026, which was the record date set by the board. This list of stockholders has been open for examination by any stockholder for any purpose germane to the annual meeting for a period of 10 days prior to this meeting. The secretary will file a copy of the list of stockholders with the records of the company. Mr. Thompson, would you please present your report of attendance at this meeting so we can determine whether a quorum is present?
Mr. Chairman, on April 7th, 2026, the record date for this annual meeting, there were outstanding and entitled to vote a total of 98,922,672 shares of common stock. I've been informed by the Inspector of Elections that a majority of the shares of stock entitled to vote at this annual meeting is present or represented by proxy. The shares so represented exceed 89% of the total shares entitled to vote at this meeting and therefore constitute a quorum.
Thank you, Mr. Thompson. On the basis of this report of the Secretary and the Inspector of Elections, I find that proper notice has been given and that a quorum is present. Accordingly, this meeting has been duly convened. We may now proceed with the business of the meeting. It is approximately 11:05 A.M. Pacific Daylight Time on June 1st, 2026. The polls for voting on all matters are now open. All Grocery Outlet registered and beneficial stockholders entitled to vote at this meeting have the ability to do so online by clicking the button, Vote Here. If you are a stockholder entitled to vote or have not yet voted, or if you want to change your previously cast vote, please do so via the website used to access this meeting by logging in as a stockholder using your 16-digit number.
If you're a beneficial stockholder, that is, you hold your shares through a bank, broker, or other intermediary, you have received materials with voting instructions. If you have already sent in your proxy card or voting instruction card or voted by internet or telephone, your shares will be voted accordingly, and it is not necessary to vote again unless you want to change your previous vote. After all proposals on the agenda have been presented, we will close the polls, and the Inspector of Elections will provide his preliminary report. We'll now move over to the review of the proposals. The first proposal to come before this meeting is the election of 10 directors.
If elected, these directors shall hold office until our 2027 annual meeting of stockholders. Until their respective successors have been duly elected and qualified, or until any such director's early resignation, retirement, or other termination of service. The board has nominated the following individuals: Frances Allen, Jeb Bachman, Mary Kay Haben, Carey Jaros, Mike Kobayashi, Chip Molloy, Jason Potter, Felicia Thornton, Jeff York, and myself, Eric Lindberg. The 10 nominees will be elected as directors if the votes cast for election exceed the votes cast against election. Information concerning these nominees is contained in the company's proxy statement. The board has recommended that you vote in favor of each of the 10 nominees. No other nominations were received prior to the deadline established in the company's bylaws. Therefore, no additional nominations may be made at this meeting, and I declare the nominations to be closed.
As a reminder, if there are any questions or comments on the proposals, please submit them through the portal, and we will address them following the last proposal. We will now move on to the second proposal. The next matter to come before this meeting is a ratification of the appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm for the fiscal year ending January 2, 2027. The board recommends that you vote for such ratification. Nathan Mitchell, a partner at Deloitte & Touche, is present at this meeting and available to respond to appropriate questions from stockholders following presentation of the last proposal. I'll now move on to the third proposal. Proposal three asks stockholders to indicate their support for fiscal year 2025 compensation of the company's named executive officers. This item is covered in depth in the proxy statement.
The Board recommends that stockholders vote in favor of the approval of the compensation of the company's named executive officers. As a reminder, this proposal is advisory. Although non-binding, the vote will provide information to our Comp Committee and our Board of Directors regarding investor sentiment about the executive compensation philosophy, policies, and practices, which our Compensation Committee and our Board of Directors will be able to consider when making future executive compensation decisions. I'll now move on to the fourth proposal. Proposal four asks stockholders to provide an advisory, non-binding vote on the frequency of advisory votes on executive compensation.
Stockholders may advise the Board on whether such votes should occur every year, every two years, or every three years. The Board recommends that stockholders vote in favor holding such advisory votes every year. Are there questions or comments on any of the four proposals? If so, please submit them through the portal now. Okay, this does conclude our presentation of the proposals at this meeting.
The polls are about to close, so if you have not yet voted, please do so. Since everyone has had the opportunity to vote, it is now 11:09 A.M. Pacific Daylight Time, and the polls are closed. The Inspector of Elections has delivered his preliminary report, and I will now announce the preliminary results. Mr. Chairman, based on the Inspector of Election's preliminary report on the first proposal, the 10 nominees received more for votes than against votes for election in alphabetical order: Frances Allen, Jeb Bachman, Mary Kay Haben, Carey Jaros, Mike Kobayashi, Eric Lindberg, Chip Molloy, Jason Potter, Felicia Thornton, and Jeff York. As a result, each of these individuals has been reelected as a director of the company to hold office until our 2027 annual meeting of stockholders.
On the second proposal, the appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm for the 2026 fiscal year has been ratified. On the third proposal, the resolution on an advisory basis relating to the compensation of our named executive officers has been approved. On the fourth proposal, the frequency of advisory votes has been approved at every year. We will file the final report of the Inspector of Elections with the records of this meeting, and we expect to report the results of the voting on a Form 8-K to be filed with the SEC within four business days of this meeting.
Thank you, Luke. That does conclude the formal business portion of the meeting. It is 11:11 A.M. Pacific Daylight Time, and the meeting is now adjourned. We'd like to invite you to ask any questions you may have regarding the company and its business. Please follow the instructions provided on the virtual meeting screen to submit questions and be mindful of the rules of conduct.
Okay. We do have some questions, which Ian Ferry, our head of investor relations, will read into the meeting, and then management can respond.
First question comes from Anthony Spinetta, and Anthony asks about a newish Grocery Outlet store that was opened a few years ago and in a new building and wondering what the percentage of store openings are expected in new buildings during the next few years. What we'd say there is typically about 85% of our store openings are in second-generation sites, with 15% being new build. Anthony has another question, and that is regarding our systems issues at Grocery Outlet and whether they have been resolved to the satisfaction of management and independent operators. With that, I'll turn the question over to Jason.
Thanks, Anthony. Yes, we've satisfied both any systems issues that were of issue to independent operators as well as things that were limiting the company in past calls we'd talked about. We feel very good about the progress that's been made and have now moved into a new phase. At this point. Thank you for the question.
Great. Our next question comes from Sam Yuan. Sam is asking: what is the cause of opportunistic mix decreasing over the last few years? Is it a result of fixed supply spread over more stores or logistics limitations?
Thanks for the question, Sam. I think the answer to that is we did make some internal decisions related to how and what we were purchasing during systems disruption, specifically around close-dated products. That's one driver, which has now been resolved. The second is decisions internally made around the amount, breadth, and depth of MTO and private label. Both of those things have been adjusted in our last six months as we work forward to continue to promote op in our business, a key driver of value and margins in the business. Thanks for the question, Sam.
Sam has one additional question about customer loyalty programs. The company has a unique base of loyal customers. Is there any focus on loyalty programs for the mobile app that rewards enthusiastic customers, and has current customers be the brand's best advertisers?
Yeah. Great question, Sam. Thank you. Yes, we do have an app and loyalty program that connects customers to our store base. There are specific promotions and information supplied to those customers. We do find that that's a helpful component of the overall value equation for our customers
Lastly, Anthony has a follow-up question. What are Grocery Outlet's most important metrics when evaluating applications from potential independent operators?
A couple of things. Thank you for the question, Anthony. One is track record. Obviously, we're looking for people who have experience in management. The second is something between five and 10 years of relevant grocery experience. We find that's very helpful in this business as folks come to the business interested in applying their trade in our unique model.
Those are all the questions.
Great. Thank you everyone for your questions. The Q&A session is now closed, and our 2026 annual meeting is concluded. Ladies and gentlemen, thank you for attending today's meeting and for your continued interest and support of Grocery Outlet. Thank you very much.
Operator, we'll turn it back over to you.
Thank you. The meeting has now concluded. Thank you for joining, and have a pleasant day.