Good morning and welcome to the Lowe's Corporation Annual Meeting for 2020. At this time, I'd to turn the conference over to Jim Tisch, Chief Executive Officer of Lowe's Corporation.
Good morning everyone. I'm Jim Tisch, the Chief Executive Officer of Lowe's Corporation. On behalf of the Board of Directors of the company, it's my pleasure to welcome you to the twenty twenty Annual Meeting of Shareholders, which we are holding virtually for the first time to protect the health and the well-being of all of our shareholders, directors, and employees during the ongoing COVID-nineteen pandemic. A few things to note before we begin the meeting. We will be following the agenda posted on the meeting site.
We will first conduct the formal part of the meeting by acting on the agenda items and then after the meeting has officially adjourned, turn to a Q and A session where we will address questions from our shareholders. The shares owned by shareholders who have sent in their proxies will be voted by ballot cast by the proxy committee named in the proxy. If you have already submitted a proxy, it's not necessary for you to vote at the meeting. If you do wish to vote at the meeting, you may do so by clicking on the voting button on the web portal and following the instructions there. Shareholders may submit questions now and at any time during the meeting in the space provided on the meeting platform.
We ask that questions cover only one topic per question. In the interest of ensuring that our meeting provides as many shareholders as possible with an opportunity to have their questions answered, We intend to respond to questions only during the Q and A session at the end. Please observe the rules of conduct posted on the meeting site. Before we proceed, I would now like to introduce the other members of your board present at this meeting: Ann Berman, Joe Bauer, Chuck Davidson, Chuck Diker, Paul Freeborg, Walter Harris, Susan Peters, Phil Eskoway, Andrew Tisch, Jonathan Tisch, and Tony Walters. And now on to the business of the meeting.
We have received proxies representing more than 94% of our outstanding shares. Accordingly, there is a quorum present. Greg Denman, who is a representative of Carl Heidberg and Associates, has been appointed to serve as inspector of election for the meeting. We will first introduce all of the proposals. After we introduce the proposal, I will declare the polls closed.
We will then review the preliminary report of the inspector of election on each of the proposals, after which the official meeting will be adjourned. And we will then move to the Q and A session. The first proposal is the election of directors. You have seen the proxy statement listing the slate of nominees for election as directors. Each nominee is presently serving as a director of the company.
The second proposal is the advisory vote on executive compensation. The third proposal is the ratification of the appointment of the auditors. Eileen Crowley and Marissa Dalligan of the firm Deloitte and Touche are present at the meeting today. The fourth proposal is the shareholder proposal requesting certain political contributions disclosures. Ms.
Molly Bettourne of Clean Yield Asset Management, the shareholder proponent, is on the line and will introduce the proposal. Over to you Ms. Bettourne.
Thank you. Good morning Chairman, Board of Directors and my fellow shareholders. My name is Molly Bettourne and I submit this statement on behalf of my firm and the filers of this proposal, Clean Yield Asset Management. Our proposal, number four on the ballot, calls on Lowe's Corporation to fully disclose the extent of its political spending. Why do we ask for this?
Corporate political spending is a controversial activity that must be carefully managed and overseen at the most senior levels of management. Mismanagement or misjudgment around political contributions can bring reputational damage, political risk and even legal consequences. While we applaud Loews for increasing its political activity disclosure this year, the company's policy still lacks in many important areas. This new policy will only marginally improve its score on the leading rating system for corporate political disclosure and accountability, the CPA Zieglin Index. In contrast, 57% of S and P 500 companies make public a detailed policy governing political contributions from corporate funds.
Peers such as AIG, Hartford Financial Services and Unum are among the top performers in this index. Specifically, we have concerns regarding contributions to state focused five twenty seven political committees, something the company's policy does not address. Over the past decade, partisan state focused five twenty seven political committees have dramatically reshaped state and national politics and policymaking. Since the twenty ten election cycle, Lowe's, through CNA Financial has contributed nearly $850,000 in corporate treasury funds to a national five twenty seven that has supported the election of candidates whose agendas may run counter to our company's stated policies. For example, CNA has made contributions to 527s which support candidates that have undermined efforts to address climate change.
In contrast, Loews Corporation acknowledges risks related to climate change and is taking steps to reduce its environmental and climate impact. Our company and its subsidiaries need to be transparent about their election related spending so shareholders know how their dollars are being spent and can help ensure that company spending is in line with the best interests of the company. If you agree, we ask that you please vote in favor of proposal four. Thank you.
Thank you very much, Ms. Petuner. The polls will close in fifteen seconds, so this is your last chance to vote. And we're going to pause while those that would like to vote have a chance to do so. I will now declare the polls closed.
We have the preliminary preliminary report of the inspector of election on the election of directors. At least two zero seven million votes have been cast for the election of each of the nominees named in the proxy statement, which is a majority of the votes cast with respect to each nominee, all of whom I hereby declare to be duly elected as directors of the company. We also have the preliminary reports of the inspector on the advisory vote on executive compensation and the ratification of the appointment of auditors. At least two forty four million votes, which is more than 95% of the votes cast, have been cast in favor of each of these proposals. Therefore, each of these proposals has been approved.
Finally, we have the preliminary report of the inspector on the shareholder proposal requesting certain political contributions disclosures. At least 172,000,000 votes, which is more than 67% of the votes cast, have been cast against this proposal. Therefore, this proposal is defeated. The inspector of election will continue with his definitive count of the exact number of votes and will deliver his certificates of the results to the secretary to be filed within minutes of this meeting. We will report the final results of the voting on a Form eight ks filed with the SEC after the meeting.
This concludes the business of the meeting. I will now declare the meeting officially adjourned. We will now have a Q and A session during which we will address questions that have been received from our shareholders through the virtual meeting platform. Mary Scafitis, our Vice President of Investor Relations will relay these questions. Mary, over to you.
Thank you, Jim. Before we return to the questions, as a reminder to allow us to answer questions from as many shareholders as possible, the rules of conduct limit each shareholder to two questions. In addition, we may summarize questions and aggregate questions received on the same topic. If we do not get to your question before we run out of time, please feel free to reach out to our Investor Relations group. Our contact information is on the website.
And now for our first question. Jim, how will those view share buybacks in the future?
So we view them in the future the way we always do. We look at the value that we think Lowe's Corporation the the price of Lowe's is trading at compared to the management's perception of the value of the stock. And if the share price is a significant discount to what we consider to be the fair value of the stock, then we'll purchase the shares. But that's subject to one very important factor, and that is that we have no additional uses for the cash that we have on our balance sheet. In times of great uncertainty like we are in now, you would expect that the company would naturally ease off on its share repurchase program because the future is seemingly so uncertain.
Having said that, it surprises me that the share price of Lowe's and also the share price of CNA are at the levels they're at. Going back two, three months and even now, in fact, I am surprised and flabbergasted that Lowe's Lowe's shares are trading under 30, and likewise, CNA shares are trading under 30. And it's just those prices are a reminder of of just how volatile stock markets can be. I believe that in the fullness of time, both Lowe's and CNA will recover and go on to significantly higher prices. But as our last filing, we haven't bought any shares simply because in these very difficult and unpredictable economic times, we want to make sure that we have maximum cash in order to be able to support all of our businesses.
And very I comfortable and sleep well at night because we have that cash on hand.
Great. Thank you. Next question is about shareholder engagement. Loews is known for being very active and engaged with its shareholders. Can you talk a little bit about your engagement with your top shareholders?
Sure. We speak to our top shareholders all the time. We have good and interesting conversations with them. They oftentimes have interesting ideas that we take very seriously and listen carefully to. My view is anybody that's serious about the company that has interesting ideas, we're we're happy to engage and listen.
We, in management, do not think that we have all the answers. We're always happy to hear what others have to say. And we oftentimes do adjust what we do based on suggestions and ideas that we hear from people outside the company.
Great. The next question has to do with operations and safety procedures that Lowe's and the subsidiaries have put in place, especially in the current environment, in Altium's manufacturing facilities, in Boardwalks, operational facilities, and in Lowe's hotels.
So first of all, until last week, each of our subsidiaries were working remotely. And I'm pleased to say that, all of them, were operating, just fine by operating remotely. I think in in Altium, some people have gone back to the main office. In the meantime, both at Altium and also at Boardwalk, there are people working in the field and in factories. For each of those enterprises, there are new policies that have been put in place to maintain social distancing, to maintain proper hand sanitation, and to do everything possible to make sure that the coronavirus is not spread among the employees.
From all the reports that I've heard so far, those efforts have been very successful. And while a number of employees have been hit with COVID-nineteen, I would say that the representation of the sickness within our total low family employment ranks is a lower percentage than in the population as a whole.
Great. Thank you, Jim. We have a comment from one portfolio manager that next year's meeting will convene at our beautifully redesigned hotel. He states that it's the most beautiful hotel in the world, the Regency, and wants to give credit to John Tisch for the redesign. Thank
you Another for that
question is about can you recap Loews' performance in the first quarter and talk a little bit about how you think Diamond's filing for Chapter 11 will affect LOES going forward.
So, LOES' performance in the first quarter was really, a tale of two cities or, a tale of two different periods. For the first for the first month and three quarters of the year, things were going very well, through about, the February. And then, the stock market fell apart. The financial markets, got, volatile beyond what any of us have seen for a very long time. And the fear of the pandemic became became the first, second, and third items on people's minds.
So for the first half of the quarter, things were very good. And then in the second half of the first quarter, all of our subsidiaries had to adjust to the new reality. And that adjustment occurred very quickly, I'm pleased to say. All of our businesses have been operating well within the context of their industries. And the the in in terms of the problem companies, the hotel business has never before seen a situation like this.
All but four of our hotels are currently closed. We're hopeful that in the near future, will begin to open. They will begin to open with a reduced number of staff to reflect the lower occupancy that we expect. Unfortunately, we had to, furlough, close to 9,000 teammates in our hotel business with the closure of the hotels. We are hopeful that, in the near future, we can start to bring them back and that, when the economy gets going again and the hotel business, improves, more and more of them can come back to work.
With respect to Diamond Offshore, I know it's a trite phrase, but I'm gonna use it anyways. There was, the perfect storm. What we had in the first quarter was initially the spat between the Saudis and the Russians where they couldn't come to an agreement on oil production for each country. So oil prices began to fall. And then, soon thereafter came the coronavirus.
And the thing that the coronavirus had to do with the oil business is that because of the coronavirus, international travel virtually ceased. Domestic travel virtually ceased. Oil consumption declined by probably 20%, but oil production continued going. So oil prices declined from about $60 at the beginning of the year to $20 by the end of the quarter. So a decline of two thirds in price.
What that did is it drove oil companies to want to reduce any and all capital spending that they could. And part of that capital spending is spending for offshore drilling. Complicating Diamond Offshore and every other offshore driller were the severe limitations on travel, both domestic and especially international. And what happened is that it became very, very difficult to move crews around the world either because there weren't flights or because there were quarantine rules for people coming in country, in some countries, and in some countries moving between areas within the country. So it became very difficult to travel.
So as a result of the coronavirus, as a result of the price of oil, the directors of Diamond Offshore thought that the and also as a result of the outlook for oil prices going forward and capital budgets of Diamond Offshore's customers, the directors of Diamond Offshore thought that the more prudent thing to do was to seek protection of the bankruptcy court so that it could save the cash from interest payments so that it could exist longer with the cash resources that it currently had on its balance sheet, which totaled in excess of $400,000,000 It was certainly a sad day and a very, very difficult decision to make. We had thought that the runway that Diamond Offshore had was significantly longer than, March or April of, this year. But the coronavirus and the price of oil and the mood of our customers and willingness of them to drill for oil caused an abrupt change in their plans and therefore caused as well an abrupt change in the plans for Diamond Offshore.
Thank you, Jim. Thank you for those answers. That concludes our Q and A session. So Jim, I'm going to hand it back over to you in the meeting.
So that concludes our meeting today. I am certainly hopeful and expectant that next year we will be able to meet again in person. I miss seeing all of our regulars at our meeting and I enjoy it very much. And so I wish everyone who's on the call good luck and be safe. And we'll see you next year.
Thanks a lot.
Thank you. The event has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.