Morning, and thank you, operator. I am Stanley Bergman, Chairman of the Board of Henry Schein. It is my pleasure to welcome you to the company's 31st annual meeting of stockholders, which is being conducted virtually via the internet. My thanks to all stockholders voting today, whether by proxy in advance of the meeting or online during the virtual meeting. Please note that the polls are open. I will act as chairman of this meeting, and Jennifer Ferrero, Vice President, Senior Counsel, and Corporate Secretary of the company, will act as secretary of the meeting to record the minutes. On the website on which you registered, you will find the rules of conduct for the annual meeting. To facilitate an orderly meeting, we ask that all participants abide by these rules.
At this time, I would like to introduce the current directors of the company who are in attendance at this meeting, beginning with our independent directors. Mohamad Ali, Senior Vice President and Head of IBM Consulting. William K. Daniel, an Executive Advisor to KKR and former Executive Vice President at Danaher Corporation. Deborah Derby, CEO of The Honey Baked Ham Company and former President and CEO of Carrols Restaurant Group. Carole T. Faig, former U.S. Health Sector Leader of EY. Kurt P. Kuehn, former CFO of UPS. Philip Laskawy, retired Chairman and CEO of EY and Lead Director of Henry Schein. Max Lin, Partner at KKR. Anne H. Margulies, former Vice President and Chief Information Officer of Harvard University.
Dr. Reed V. Tuckson, Managing Director of Tuckson Health Connections, LLC, Co-founder and Convener of Black Coalition Against COVID, and Co-founder and Board Chairman of the Coalition for Trust in Health & Science.
I would like to also welcome Fred Lowery as CEO of Henry Schein. Fred assumed this role effective March 2nd, 2026, at which time he also joined the board of directors. Fred brings more than 20 years of healthcare distribution experience and a strong track record of scaling complex businesses to drive significant growth and sustain value creation. We believe Fred has the right experience and values to guide the company's next phase of growth and continued execution of the BOLD+1 strategic plan. Joseph L. Herring, former Chairman and CEO of Covance. Robert J. Hombach, former Executive Vice President, CFO, and COO of Baxalta Inc. Dr. Bradley T. Sheares, former CEO of Reliant Pharmaceuticals and former President of US Human Health at Merck. Scott Serota, former President and CEO of Blue Cross Blue Shield Association, are unable to be with us today in person.
Joining us today from BDO USA, Henry Schein's independent registered public accounting firm, is John Tucci. Also joining us from our outside legal counsel, Proskauer Rose, is Michael Ellis. Please note the floor is open for questions to be submitted now and during the formal remarks. We have allocated time to answer these questions later in the meeting. If we are unable to get to your questions, please send an email to investor@henryschein.com after the meeting so that we may follow up. Before we begin the formal portion of the meeting, I would like to take a moment to recognize and thank Brad Sheares, Dr. Brad Sheares, Joe Herring, Bob Humbach, and Scott Serota, who alongside myself, are not standing for re-election to the board of directors at today's annual meeting of stockholders.
Bradley has served our board for 16 years and has provided valuable and outstanding leadership, chairing our Strategic Advisory Committee and serving as a member of our Nominating and Governance Committee. That's the Governance Committee and Compensation Committee both. Over his distinguished tenure as director, Bradley's insight and judgment made him a trusted advisor who has been instrumental in the company's growth and success. Joseph has served on our board for 10 years. We are deeply appreciative of his leadership in chairing our Regulatory Compliance and Cybersecurity Committee, including navigating complex challenges and strengthening the company's resilience for the future. He's also a member of the Compensation Committee and Strategic Advisory Committee. We thank Joseph for enhancing the quality of board discussions with his informed and practical insights and healthcare industry experience and expertise. Robert joined our board last year.
We have benefited from his extensive financial and strategic experience, including as a member to the Strategic Advisory Committee . His collaborative spirit and commitment to excellence have made him a highly respected voice in our boardroom. Scott has served on our board for almost five years. He's also a member of the Regulatory Compliance and Cybersecurity Committee and the Strategic Advisory Committee. As former President and Chief Executive Officer of Blue Cross Blue Shield, Scott's extensive expertise in healthcare strategy and health policy have provided a vital perspective that has been greatly enriching our board discussions. We are deeply grateful for his commitment to the company's mission and for the enduring impact his guidance has had on Henry Schein's success. Finally, after 44 years as a Director of Henry Schein, I'll be stepping down and assuming the title of Chairman Emeritus.
The company's gone through enormous change over this time, and I'm confident that I'm leaving it in good hands and that it will continue its success. The board has selected a new non-executive chair at the board meeting following this annual meeting and will select a new non-executive chair at the board meeting following this annual meeting. Thank you, Brad, Joe, Bob Hombach, and Scott Serota, for all your years of service and all your contributions to Henry Schein. Fred, thank you very, very much for assuming your new role as CEO. I have great confidence in your experience, capabilities to lead this company. Jennifer.
Thank you, Stanley. I will now turn it over to Philip Laskawy, our Lead Director.
Thank you, Jennifer. Stan, before we continue, I want to pause and speak not just on behalf of the Board of Directors, but on behalf of every Team Schein member, past and present, to express our profound gratitude for your extraordinary lifetime service to this company. What you have built is nothing short of remarkable. To take a small family-owned operation and grow it into a multinational enterprise approaching a $10 billion valuation with over $13 billion in sales, plus the animal health business, which generated $4 billion in annual sales and delivered approximately $3 billion in value to shareholders when spun off in 2019, would in itself be a legacy worth celebrating.
What truly sets your story apart, Stanley Bergman, is how you did it with integrity, dignity, and with a deep and unwavering respect for every person this company touches, our customers, our supplier partners, our shareholders, and most of all, our people. The values you have instilled in this culture are not written merely on a wall. They are woven into the way we work, the way we lead, and the way we treat one another every single day. That is your most enduring contribution, and it will outlast all of us in this room. I also want to thank you for the way you treated Fred Lowery in this transition with dignity and respect and with all the help that he requested. On behalf of this board, shareholders, and the entire Team Schein, we wish you a retirement filled with pride in all that you have accomplished.
Thank you, Stan. Now I will turn it over to Fred.
Thank you, Phil. Stan, on behalf of our Team Schein members around the world, I want to express my deep appreciation for everything that you've done for this company over the past 44 years. Your vision, your integrity, and your passion for doing what is right for our customers, our partners, our shareholders, and our people have shaped Henry Schein into the organization that it is today. We are grateful for your leadership, and I'm personally honored to carry that legacy forward. I would also like to extend my sincere thanks to Brad, Joe, Bob, and Scott for their outstanding service to the board and their support of me in my transition. Your contributions have strengthened this company in ways that will continue to benefit us for years to come, and we wish each of you the very best.
Looking ahead, I'm excited as we execute our long-term strategy of building the healthcare industry's most trusted and comprehensive platform of integrated solutions, empowering practitioners to optimize their business operations while advancing the quality, accessibility, and most importantly, the outcomes of patient care. To support this, we're committed to continuing to develop value-added services and open architecture clinical workflow solutions that give practitioners the flexibility and the tools that they need. We're also focusing on helping the integration of dental and medical services, recognizing that the future of healthcare is connected, and Henry Schein is uniquely positioned to help bridge those worlds for the benefit of practitioners and patients alike. Phil.
Thank you. Thank you, Fred. Thank you, Phil. I would also like to thank the board for the incredible support and the former board members that are now no longer on the board for the incredible support during the 31 years that we've been a public company. Incredible leadership by our board as we navigated multiple ups and downs in this 31 years since the company's IPO. Of course, let me once again thank the team and of course, the management team that was there during this period. I will now turn the business before us over to Jennifer.
Thank you, Stanley. We will now begin the formal portion of the annual meeting. As stated in the rules of conduct, we ask that you restrict your questions to the items on the agenda that are before us today. During the meeting, stockholders who logged into the meeting using their 16-digit control number included in the notice of Internet availability of proxy materials or on their proxy card, are welcome to submit questions through the virtual meeting platform by typing your question into the Ask a Question field and clicking Submit. Questions pertinent to the meeting matters will be answered following the formal portion of the meeting, subject to time constraints.
I place before the meeting a copy of the Notice of Annual Meeting of Stockholders and Proxy Statement, dated April 8th, 2026, and made available to all stockholders of record as of the close of business on March 23rd, 2026. I also placed before the meeting the Affidavit of Distribution from Broadridge Financial Solutions, attesting to the distribution of the notice of Internet availability of proxy materials, the notice of this meeting, and the proxy statement to all stockholders entitled to such documents.
Thank you, Jennifer. The affidavit will be filed with the minutes of the meeting together with the notice of annual meeting of stockholders and the proxy statement. List of registered stockholders as of March 23rd, 2026, duly certified by Continental Stock Transfer & Trust Company is available on the virtual meeting website for inspection by any stockholder during the meeting. Barry Shapiro of Carl T. Hagberg & Associates has been designated to act as Inspector of Election, and he has previously filed his oath as Inspector of Election with the Secretary. The polls will remain open until it is formally announced that the polls are closed. Stockholders who logged into the meeting using the 16-digit control number included in the notice of Internet availability of proxy materials or on their proxy card may vote their shares during the meeting by checking the Vote Here button on their screen.
If you previously voted, that will not limit your right to vote online during the meeting to the virtual meeting platform, and your online vote will supersede the vote you submitted previously. No online votes, ballots, or proxies, or revocations of changes to online votes, ballots, or proxies will be accepted after the polls are closed. I will announce the preliminary voting results in each matter after the vote is closed. I have received a certificate of quorum from the Inspector of Election, which states that on March 23rd, 2026, the record date, the total number of issued and outstanding shares of the common stock of the company entitled to vote at this meeting was 114,748,051 shares. It further states that there are present in person a sufficient number of shares to constitute the quorum.
The first order of business is the proposal to elect 10 incumbent directors of the company for terms expiring in 2027, as set forth in Proposal 1 of the Notice of Annual Meeting of Stockholders. I will entertain a motion to nominate 10 persons for whom proxies were solicited for election as directors of the company, each to serve a term expiring in 2027. They are, in alphabetical order by last name, Mohamad Ali, Dan Daniel, Deborah Derby, Carole Faig, Kurt Kuehn, Phil Laskawy, Max Lin, Fred Lowery, Anne Margulies, and Dr. Reed Tuckson. Will someone please move the approval of this proposal, and someone please second the motion?
I so move.
I second the motion.
Thank you. The second order of business is the proposal to consider the approval by non-binding votes of the 2025 compensation paid to the company's named executive officers as defined in the proxy statement, commonly known as Say on Pay proposal, as set forth in Proposal 2 of the Notice of Annual Meeting of Stockholders. I will entertain the motion to approve by binding votes the 2025 compensation paid to the company's named executive officers. Will someone please move the approval of this proposal, and someone please second the motion?
I so move.
I second the motion.
Thank you. The third order of business is the proposal to ratify the selection of BDO USA as the company's independent registered public accounting firm for the fiscal year ending December 26th, 2026, as set forth in Proposal 3 of the Notice of Annual Meeting of Stockholders. I will entertain a motion to approve the ratification of BDO USA as the company's independent registered public accounting firm. Will someone please move the approval of this proposal, will someone please second the motion?
I so move.
I second the motion.
The fourth and final order of business is the shareholder proposal to govern by majority vote. The proposal was submitted by Mr. John Chevedden, who is on the line to present it. Mr. Chevedden, you have up to three minutes to present your proposal. Please go ahead.
Hello, this is John Chevedden. Proposal 4, govern by majority vote, shows request to the Board of Directors take each necessary step so that each voting requirement on charter and bylaw that calls for greater than simple majority vote be replaced by a requirement for a majority of the votes cast for and against proposals. This means the closest standard to a majority of the votes cast for and against such proposals. This proposal includes that the company shall state in its governing documents it shall have no super majority voting standards, which includes default super majority voting standards upon adoption of this proposal. Shares are willing to pay a premium for shares of companies that have excellent corporate governance.
The super majority voting requirements, like those of the company, have been found to be one of six entrenching mechanisms that are negatively rated to company performance, according to What Matters in Corporate Governance by Lucian Bebchuk of the Harvard Law School. Super majority requirements can be used to block proposals supported by most shareholders but opposed by management. This proposal's topic won from 74%-88% support at Weyerhaeuser, Waste Management, Goldman Sachs, FirstEnergy, and Macy's. These votes would have been higher than 74%-88% if more shareholders had access to independent proxy voting advice. This proposal also received 98% support at annual meetings of Domino's Pizza, FMC Corporation, ConocoPhillips, Masco Corporation, and Power Integrations. Please vote yes. Govern by majority vote, proposal 4.
Thank you very much for your proposal, Mr. Chevedden. The presentation of proposal number 4 is acknowledged, and the matter is properly before the meeting for consideration. Stockholders will find the board of directors statement of opposition to this proposal on pages 75 and 76 of the proxy statement. The board recommends a vote against this proposal for the reasons stated therein. As that was the last matter called for a vote, and with everyone now having had the opportunity to vote, I declare the voting closed. We will now take questions from stockholders related to annual meeting matters. If you are logged in with your 16-digit control number and you have not already submitted a question, you may do so now by typing a question into the Submit a Question field and clicking Submit. Jennifer, are there any questions related to matters properly brought before this meeting?
Stanley, yes. There are two questions, both from the same unidentified shareholder, and the first question I will ask Fred to respond to. The first question is, "Please advise the Henry Schein, Inc. response to the following statement. Increased competition from new market entrants, particularly in digital equipment like intraoral scanners and consumables like gloves, has squeezed gross margins." Fred, can you respond to that question, please?
Thanks for the question. We believe the new interest into intraoral scanners is a positive for the market, as it expands the investment in digital dentistry. We do not believe that this category significantly impacts our gross margins.
Thank you, Fred. The second question is, "Please advise Henry Schein, Inc.'s response to the following statement. The core dental segment has faced instability with slower demand for high-cost procedures and flat patient traffic, limiting organic volume growth." Fred, I'll pass that along for you to answer the question.
Yes. Patient traffic in the U.S. is steady. However, we do believe that demand actually outpaces supply. Discretionary spend does primarily impact high-end implant procedures. This is primarily due to retirements of dentists and lack of hygienists. We expect this to normalize over time. Despite this relatively flat to positive market, our dental business is doing well.
Thank you, Fred. There are no further questions at this time. I will turn the meeting back over to Stanley.
Thank you very much for the questions, everyone, or whoever asked them. Jennifer, my understanding is no further questions, so I will turn back to the voting matters under consideration. I have received a preliminary report of the Inspector of Election, who has certified the results of the voting to the time of the report. The results state that each of the 10 persons nominated as directors for a term expiring in 2027 have been duly elected. The proposal to approve by non-binding vote the 2025 compensation paid to the company's named executive officers was approved. The selection of BDO USA as the company's independent registered public accounting firm for the fiscal year ending December 26, 2026, has been ratified, and the shareholder proposal to govern by majority vote was approved. Final voting results will be filed with the Securities and Exchange Commission on Form 8-K.
The final report of the inspector of election will be filed with the records of this meeting. At this time, I will entertain a motion to adjourn the meeting and ask that someone please second the motion.
I so move.
Second the motion.
The motion is carried and the meeting adjourned. Thank you everyone for participating.
Thank you. The meeting has now come to an end. Thank you for attending. You may now disconnect.