Okay. Welcome to the Howard Hughes annual meeting. This is our first annual meeting accomplished virtually. We're going to have the same opportunities to ask questions in the meeting as we normally do. Welcome.
I'm chairman of the board. And on behalf of the board and officers of Howard Hughes, I'd like to thank you for attending our twenty twenty meeting. This is our tenth annual meeting of shareholders. Appreciate each one of you taking the time to participate in the meeting. I now ask that Peter Reilly, our General Counsel and Secretary, begin recording the proceedings.
The first item on our agenda today is the election of directors, followed by the consideration of three proposals: Advisory vote on executive compensation or as it's more commonly known, say on pay. A vote to approve the Howard Hughes Corporation 2020 equity incentive plan. And a vote to ratify the appointment of Ernst and Young LLP as the company's independent registered public accounting firm for the fiscal year ended December 3120. Ending 12/31/2020. This time, I'd like to publicly recognize the board directors, all of whom are on the line with me today.
If you have questions later, can address them to me or other members of the board. Those directors which I will introduce in alphabetical order are Adam Fledo, Jeff Ferber, Beth Kaplan, Alan Modell, Scott Sellers, Steve Scheppsman, and Mary Anne Tighe. Also present on the call is Paul Lane, the company's CEO, who's also a member of our board. Broadridge has been appointed to act as Inspector of Elections. With respect to rules of conduct and procedures, you can find these on our web portal.
With that, I'd like to turn the meeting over to Peter Riley. Peter?
Thank you, Mr. Chairman. This meeting is held pursuant to the notice of meeting proxy statement and proxy mailed on or about 04/03/2020. A list of shareholders entitled to vote at this meeting has been available at the company's headquarters for the last ten days and also is available on our web portal for examination by any shareholder desiring to do so. Broadridge has delivered an affidavit of mailing establishing that notice of the meeting was duly given.
A copy of the notice of meeting and the affidavit of mailing will be incorporated into the minutes of this meeting. All shareholders of record at the close of business on 03/18/2020 are entitled to vote at this annual meeting. The shareholders list shows that 42,795,030 shares of common stock of the company are entitled to vote at this meeting. We are informed by Broadridge that there are represented in person or by proxy 36,277,835 shares of common stock or approximately 84.8% of all the shares entitled to vote at this meeting. Therefore, quorum is present.
Back over to you, Mr. Chairman.
Thank you, Mr. Secretary. Because holders of a majority of the shares entitled to vote at this meeting are present in person or by proxy, I declare this meeting to be duly convened for purposes of transacting such business as may properly come before it. Proposals and discussion. Proposal number one, election of directors.
The first proposal before the shareholders of the company is the election of nine directors serve until the annual meeting of shareholders in 2021 until their successors are duly elected and qualified. The board recommends the election of the following persons as directors of the company, myself, Adam Plato, Jeff Ferber, Beth Kaplan, Paul Lane, Alan Modell, Scott Sellers, Steve Scheffman, and Mary Anne Tighe. Each of these nominees and their qualifications as directors are listed in our proxy statement. The company's bylaws require advance notice of proposed nominations. If no notice of other nominations has been submitted in accordance with the bylaws, the nominations are closed.
Proposal number two, say on pay. The second proposal before the shareholders of the company is the advisory vote for the proposal approving executive compensation for twenty nineteen as disclosed in our proxy statement. The vote gives you as a shareholder the opportunity to endorse or not endorse the company's executive compensation program by voting for or against this proposal. The board recommends that shareholders vote for the proposal. Proposal number three, approval of the Howard Hughes Corporation 2020 equity incentive plan.
Third proposal for the shareholders of the company is the vote to approve the Howard Hughes Corporation 2020 equity incentive plan as disclosed in our proxy statement. The purpose of the 2020 incentive plan is to provide a means for the company to attract, retain, and motivate officers, employees, non employee directors, and consultants providing services to the company or any of its subsidiaries or affiliates and to promote the success of the company's business by providing the participants in the 2020 incentive plan with appropriate incentives. The company's current equity incentive plan, the Howard Hughes Corporation amended restated 2010 incentive plan will expire by its terms on 11/08/2020. If the 2020 incentive plan is approved, a maximum of 1,350,000 shares of our common stock will be available for issuance under the plan. Proposal number four, ratification of appointment of Ernst and Young LLP.
The third proposal before the shareholders is the advisory vote to ratify the appointment of Ernst and Young LLP as the company's independent registered public accounting firm for the fiscal year ending 12/31/2020. The board recommends shareholders vote for the proposal. Questions and comments. This will be an appropriate time to submit any questions on the nominations and proposals through the field provided on the web portal. I'll take a pause, and Peter can see if we have any comments or questions.
Nothing yet, mister chairman, but give it a few minutes.
Okay. So what we'll do is I'll keep going. And if things come up, why don't you alert me? Okay?
Sure.
The polls are now open. If you desire to vote, please do so following the instructions on the web portal. Take a brief pause here to give you a chance to vote online. The vast majority of our votes are submitted in advance, so I wanna give this thirty more seconds. That, the polls are now closed.
Mister secretary, have you received results of the balloting?
Yes, mister chairman. I I'm sorry. Yes, mister chairman. I have. And I would note that on my screen, I'm not seeing any, votes, at the meeting so far anyway.
According to the preliminary report of the inspector of elections, the nine persons nominated aboard have all been elected. Over 90% of the shares cast were voted for the election of each director. On the advisory vote to approve executive compensation, say on pay, approximately 29,053,592 shares or 89.06% of the shares cast were voted to approve executive compensation. Approximately 3,566,989 shares or 10.93% of the shares cast were voted to disapprove it. Approximately 39,214 shares or point 12% of the shares abstained from voting, and there were 3,618,040 shares that were broker non votes, so that passed.
On the advisory vote to approve the Howard Hughes Corporation's 2020 equity incentive plan, approximately 31,190,739 shares or 95.56% of shares cast were voted to approve the 2020 incentive plan. Approximately 1,446,609 shares or 4.43% of the shares cast were voted to disapprove it. Approximately 22,447 shares or 0.06% of the shares abstained and there were 3,618,040 shares that were broker non votes. On the advisory vote to ratify the appointment of Ernst and Young LLP as the company's independent registered public accounting firm for the fiscal year ending 12/31/2020, approximately 36,198,038 shares or 99.79% of the shares cast were voted to ratify the appointment of EMY. Approximately 73,071 shares or 0.2% of the shares were voted against the ratification, and approximately 6,726 shares or point 01% of shares abstained.
That concludes my report. The final results of the voting will be filed with the SEC within four business days. I'll turn it back over to you, Mr. Chairman. And
Okay. Thank you, Peter.
I would note right now so far I don't have any questions yet from any of the Just
to remind people that this is the question and answer period of the meeting. We welcome your questions. If you have a question, you can ask a question by submitting it on the field provided on the Web portal. Peter will receive the questions. He will read them aloud.
And I will direct the question to the appropriate person to answer it. It could be a question for management or a question for myself or any of the other directors.
Mister chairman, we just received a shareholder question. The question is, what building projects are being worked on in New York City?
Okay. So I guess maybe I direct the question to Paul. If you can just talk about well, the only asset of consequence we have in the city is the seaport. What is the status of construction at the seaport, and what do we know about our ability to resume construction there?
Yeah. Thank you, Bill. The current status, as most know, that the city of or the state has shut down all construction for New York. And so we are completely shut down at this point, and we will not know when we can start construction again until, governmental entities allow that. And I would also I think Saul Cheryl is on the call, if Saul would like to add anything to this.
No, Paul. I think you got it right. Everything has stopped, we're monitoring and ready to start when we get direction from the state.
Thank you. Thank you, Bill.
Next, Peter, any further questions?
Yes. We just got another question. These, the heading is two related questions. The question is, did the company evaluate other funding options prior to the recent equity raise? Last fall, company stated the NAV was much higher than the then current stock price of about $120 per share.
Therefore, both the company and many shareholders have likely found the equity raise very very dilutive to the long term NAV of the company. The company has always stated development projects are not started until the project is fully funded. What opportunities can the company take to offset this dilution if and when the company finds the additional liquidity not necessary?
Sure. So why don't I address this and then maybe perhaps David O'Reilly if you have further comments. I would I would say an equity offering for Howard Hughes was more I put that in the category of a last resort in the sense that if you look at the history of the business from the time we launched as a public company, we've been retiring shares and repurchasing warrants as opposed to issuing equity. It's not our first choice and certainly not something that the company or the board wanted to do, particularly at a price of $50 a share. What I would say, however, is we were hit by, I would say, an unprecedented crisis that if you think about the assets of the Howard Hughes Company, start with the South Street Seaport, an outdoor entertainment restaurant venue, kind of midway through construction.
Think about The Woodlands in Bridgeland in Houston located, you know, kind of in the oil oil patch of our our country. Think about Summerlin in Las Vegas, which is the, again, entertainment capital of the country reliant on large groupings, business conferencing, casino spending. And then our condo business in Hawaii. And while the company is, in the ordinary course, very well capitalized and all of our projects are funded, that assumes, I would say, more of an ordinary course world. And we were confronted with something different from that.
And our first choice was to to seek, you know, what man what the board had management do is run a series of scenarios with, you know, differing degrees of conservatism to look at what, you know, would happen to the company, for example, if we didn't sell another lot, we didn't sell another condominium, if our retail assets were impacted, if our hotels were closed. And, you know, under those scenarios, you know, toward the end of this year, the company's cash would, you know, go below you know, we'd start to hit covenants on some of our debt obligations. And I think our first priority as a board and as a management team is ensuring insuring solvency. I don't know whose computer that is, but ensuring solvency of the company, ensuring liquidity, and making sure that we, you know, live to fight another day, so to speak. And when we took a look at our alternatives, really, debt capital markets were completely closed.
And really our only alternative to raise capital was equity. And the, you know, my preferred choice in a circumstance in which stock is trading at a deep discount to our view of intrinsic value and you need to raise capital, the ideal sort of form of doing so would be a rights offering. Because you sort of give every shareholder the opportunity to buy their proportionate interest so shareholders can minimize the dilution to them to their interests by participating in offering. Problem, however, with the rights offering takes time, months. There's no certainty of execution.
And so you put the company in a position where you've announced to the world that you need to raise capital. You're gonna do it in a rights offering, and the most likely outcome is the stock actually goes down and could go down to a level where the offering could not be completed. So we did what we thought was the next best thing. And and the company contacted a series, you know, a couple of investment banks to get their advice. And basically, the answer came back because there was no ability for Howard Hughes to do an equity offering.
And when I heard this, I went to the board and said, look, Pershing Square, big believer in the company long term. We'd be open to making a meaningful investment in the company. And we talked to the banks, they said, with a big commitment from Pershing, we believe that we'll be able to raise some capital from other shareholders, but we're not certain. And then in light of the fact that Pershing was expressed an interest and we're obviously an affiliate of the company, at that point, I withdrew from the company's process to consider an equity offering. And the board met independently to consider the various alternatives and ultimately decided to pursue an equity offering with purchasing ultimately purchasing $500,000,000 of stock and $100,000,000 of stock being purchased by a meaningful number of other shareholders.
The approach we took on the offering was to design it almost like a rights offering and that the investment banks that we engaged to do the offering were tasked with contacting as many of our shareholders as possible to give them the opportunity to participate in the offering. And then they went through probably the top 100 or so of the large shareholders of the company. The good news for a small shareholder is a small shareholder could have protected themselves from dilution by just buying the stock in the open market, which is a more difficult thing for a large holder to do, which is why the banks contacted a large number of the holders. That's my perspective as chairman, and that's my perspective also from Pershing Square's point of view. We just address the balance of the question, and I'm going to ask Scott Sellers.
Operator, if you can get his line ready. Scott was a member of a subcommittee of the board that oversaw the financing of the investment bank. So there are two points that the questioner makes. One is, you know, this is dilutive to the intrinsic value and the net asset value of the company. I agree with that.
The good news is the dilution is not that material. It's the order of 10 to 12. And to the extent that the capital is invested intelligently and opportunistically as opposed to defensively, if things are not as bad as, you know, more draconian scenarios, the incremental capital will, one, allow us to continue to pursue projects that are very accretive to the value of the company and can, you know, sort of compensate for the dilution. And then if we find ourselves, you know, God bless, a year from now there's a vaccine, life returns to normal, the company is overcapitalized at that time, obviously, we can reverse the process and repurchase shares to repair, if you will, the damage. Or alternatively, you know, in if you look at what's going on in the publicly traded real estate universe, which I think is indicative of maybe what's going on in the privately traded universe, is our competitors who did not raise equity capital may find themselves in a place where they have to and their stocks are trading at meaningfully lower prices than where we got our sort of offering done on a relative basis.
And that may put us in a relatively you know, we think, you know, today with a billion dollars of cash on the balance sheet, you know, we are in a very strong position to take advantage of, you know, what may be the inevitable opportunities that appear during this crisis. But with that, let me take a pause. You know, Scott, if you could just share with shareholders the process the board went through and because I was not in attendance when you were independent directors were considering this financing.
Sure. And and is my is my line open now?
Yes. It is. We can hear you.
Okay. Great. Thank you. Good morning to everybody. I'll just give you a brief synopsis.
I think Bill gave a very thorough summary of the thought process and the analysis that was conducted in order to decide that this was the appropriate course of action. The board and the committee of the board assembled for the purpose of looking at this capital raise and other options did go through a very exhaustive analysis and careful scrutiny of multiple scenarios for how this crisis could unfold. The clear conclusion that we reached was that the company needed to raise substantial additional capital in order to ensure its solvency throughout the duration of what could be an extended slowdown or lockdown of the economy. I think even as we sit here today, none of us know what will be the duration of the current central shutdown of the economy for lack of a better description. And then of course, longer this goes on, the more discussions are tending toward a very extended and slow recovery.
So as we looked at the most important thing for the board to consider is ensure the survival of the company. We looked at what happened to companies and the real estate companies in particular in the 2008, two thousand and nine great financial crisis that did not raise capital early. Essentially what happens is the market and investors begin to focus on the future solvency of those companies and for those companies whose availability of capital for sustained operations is in question, their share prices get to the point where they decline dramatically where raising capital is no longer an option or capital has to be raised at a draconian discount to any semblance of value. We did not want that to happen and we felt that we looked carefully at how much capital we needed to ensure the survivability of the company during what we felt would be a protracted downturn. Closure of hotels, closure of a lot of retail tenants for example, closure of cities, all of which has happened and continues in many cases.
That's where we sized the offering. We worked closely with management and investment bankers to understand what options were out there. As Bill Eichmann said previously, they contacted a number of large investors. The debt capital markets were not available and essentially the bankers came back to us and told us there were virtually no options available for raising equity capital without essentially a cornerstone investor, which is what Pershing Square served as in this offering. So that's how this was analyzed, thought through, sized, and ultimately executed.
With that, I will ask David O'Reilly, our Chief Financial Officer, to add any relevant detail to that discussion.
Thanks Scott, this is David. I think that your answer and Bill's answer were thorough and articulate and there's really not much more to add.
Okay. Peter, is there another question?
No, Mr. Chairman. There are no more questions at this time.
Okay. So thank you, everyone, for attending our first and hopefully only virtual Howard Hughes annual meeting, and we hope to see you in person next year. At this time, I will end the meeting, and thank you for your attendance. We are hereby adjourned.
Thank you, everyone.