I'm Adam Schechter, President and Chief Executive Officer and Chairman of the Board of Labcorp, and Chairman of this annual meeting. I'm happy to welcome you to this annual shareholders' meeting. Before we get started, I want to take a moment to thank our team for their contributions in 2023. We continue to focus on and advance our near-term and long-term growth opportunities, and we successfully completed the spin of our clinical development and commercialization business, Fortrea, now an independent publicly held company. At the same time, we delivered strong results across the enterprise and have strong momentum heading into 2024. Labcorp is well positioned to progress our mission to improve health and to improve lives while generating attractive returns for our shareholders. The meeting will now come to order. All votes will be delivered to the inspector of election. The secretary will record the proceedings.
I would like to introduce to you the other board members and officers who are present today. Directors present are Kerrii B. Anderson, Jeffrey A. Davis, D. Gary Gilliland, Kirsten M. Kliphouse, Garheng Kong, our lead independent director, Peter M. Neupert, Richelle P. Parham, Paul B. Rothman, and Kathryn E. Wengel.
I would now like to acknowledge our senior officers present today: Megan Bailey, Executive Vice President and Chief Strategy and Transformation Officer, Lance Berberian, Executive Vice President and Chief Information and Technology Officer, Brian Caveney, Executive Vice President and President Early Development Research Laboratories and Chief Medical and Scientific Officer, Jon DiVincenzo, Executive Vice President and Chief Financial Officer, Anita Graham, Executive Vice President and Chief Human Resource Officer, Mark Schroeder, Executive Vice President and President Diagnostic Laboratories and Chief Operations Officer, Amy Summy, Executive Vice President and Chief Marketing Officer, Sandra van der Vaart, Executive Vice President and Chief Legal Officer and Corporate Secretary, and Peter Wilkinson, Senior Vice President and Chief Accounting Officer.
Also present is Caroline Daughtry, representing Deloitte & Touche LLP, the independent registered public accounting firm of the company. Before we proceed with the meeting agenda, the secretary, Ms. Vaart will review certain information related to the meeting.
After the formal meeting has been adjourned, we will also provide time for general questions. Only validated shareholders will be able to submit questions using the designated field on the web portal or through our investor relations email address at investor@labcorp.com. If you choose to submit a question by email, please include your control number in the email subject line in order for your question to be considered. Out of consideration for others, please limit yourself to one question. In the unlikely event that the volume of questions remains, the remaining pertinent questions will be answered on our investor relations site. Consistent with our approach, when the annual meetings were held in person, questions or comments that are not related to the proposals under discussion are about employment matters or personal concerns, not shared by shareholders generally, or use blatantly offensive language, may be ruled out of order.
We will, however, respond to questions and concerns not shared by shareholders generally via email after the meeting. The Board of Directors set March 20th, 2024, as the date of record for this shareholders' meeting. We have here a record of shareholders as of that date, which is duly certified by our transfer agent and is available during this meeting on the meeting portal for inspection by shareholders. I have been advised by the inspector of election that immediately prior to commencement of the meeting, at least 91% of the company's shares of common stock issued and outstanding and entitled to vote are present or represented by proxy at today's meeting. Because a majority of the company's shares is represented here today, a quorum is present and the business of the meeting may proceed. The notice for the meeting was duly and properly mailed.
Affidavits of mailing of the notice of meeting, proxy card, and proxy statement will be filed with the records of the meeting.
There are four items on the agenda to be voted on today. One, the election of directors. Two, the approval on a non-binding advisory basis of the compensation of our named executive officers. Three, the ratification of the appointment of Deloitte & Touche LLP as Labcorp's independent representatives. And four, to vote upon two shareholder proposals, including seeking shareholder opportunity to vote on excessive golden parachutes and seeking an annual report on the transport of non-human primates within the U.S. A third shareholder proposal seeking a board report on known risks and costs of fulfilling information requests related to abortion access has been withdrawn by the shareholder.
There will be a discussion period relating to each item immediately after its introduction. If any shareholder would like to make a comment regarding any of the proposals at the indicated time, please submit your comment at that time using the designated field on the web portal or through our investor relations email address at investor@Labcorp.com with your control number included in the email subject line. We will attempt to ensure that all shareholders' comments are read aloud and representatives of management will respond to questions. However, in the interest of time and because each of these items has been fully discussed in the proxy statement, discussion on each item, including the presentation of each shareholder proposal, will be limited to five minutes. If you send in your proxy, you do not need to take any further action unless you wish to change your vote.
At the end of the discussion period relating to the items to be voted on during today's meeting, the ballots will be collected and delivered to the inspector of election. The company has appointed Christin O'Donnell to be the inspector of election. She is familiar with the duties and responsibilities of an inspector of election. Votes have been tabulated. We will now turn to item one.
The first item is the election of directors. The nominees and their qualifications are described in a proxy statement dated April 4th, 2024, which has been made available to all shareholders of record as of March 20, 2024. Sandy, will you please present the proposal to elect directors?
I move that the director nominees be elected pursuant to the following resolution: Resolve that each of Kerrii B. Anderson, Jeffrey A. Davis, D. Gary Gilliland, Kirsten M. Kliphouse, Garheng Kong, Peter M. Neupert, Richelle P. Parham, Adam H. Schechter, Paul B. Rothman, and Kathryn E. Wengel be and hereby is elected as a director of the company to serve until the next annual meeting of shareholders and until their successor is duly elected and qualified, or until their earlier death, resignation, or removal.
The meeting is open for discussion relating to the election of directors. If any shareholder would like to make a comment regarding this proposal, please submit your comment through the web portal or by email now.
There are no comments that have been received.
The second item is a non-binding advisory vote to approve compensation of the company's named executive officers. Sandy, will you please present the proposal to approve executive compensation?
I move that the company's compensation of its named executive officers. Resolution: Resolve that the compensation paid to the company's named executive officers, as disclosed pursuant to the rules of the Securities and Exchange Commission, including in the compensation discussion and analysis, compensation tables, discussion in the company's 2024 proxy statement, is hereby approved.
The meeting is open for discussion relating to the approval of the company's compensation of its named executive officers. If any shareholder would like to make a comment regarding this proposal, please submit your comment through the web portal or by email now.
There are no comments that have been received.
The third item is a ratification of the appointment of the independent registered public accounting firm for 2024. Sandy, will you please present the proposal to ratify this election of the independent registered public accounting firm?
I move that the appointment of the independent registered public accounting firm for 2024 be ratified pursuant to the following resolution. Resolve that the appointment of Deloitte & Touche LLP as the independent registered public accounting firm of Laboratory Corporation of America Holdings for the fiscal year ending December 31, 2024, be ratified.
The meeting is open for discussion relating to the selection of the independent registered public accounting firm. If any shareholder would like to make a comment regarding this proposal, please submit your comment through the web portal or by email now.
There are no comments that have been received.
The fourth item relates to two shareholder proposals described in a proxy statement. At this time, I'd like the operator to open John Chevedden's line to present the first shareholder proposal. Operator?
Hello, this is John Chevedden. Proposal four, shareholder opportunity to vote on excessive golden parachutes. Shareholders request that the board adopt a policy to seek shareholder approval of senior managers' new or renewed pay packages that provide for golden parachute payments with an estimated value exceeding 2.99 x the sum of the executive's base salary plus target short-term bonus. This proposal only applies to named executive officers. The board shall retain the option to seek shareholder approval at an annual meeting after material terms are agreed upon. Generous performance-based pay can sometimes be justified, but shareholder ratification of golden parachutes better aligns management pay with shareholder interests. This proposal is especially relevant because there are absolutely no limits on equity golden parachutes at Laboratory Corporation.
It is totally inconsistent that Laboratory Corporation believes there needs to be limits on cash golden parachutes, and then Laboratory Corporation has absolutely no limits on equity golden parachutes. Excessive golden parachutes can simply be switched from cash to equity to avoid shareholder accountability. This proposal is relevant even if there are current golden parachute limits. A limit on a golden parachute is like a speed limit. A speed limit by itself does not guarantee that the speed limit will never be exceeded. Like this proposal, the rules associated with a speed limit provide consequences if the limit is exceeded. With this proposal, the consequences are a non-binding shareholder vote is required for unreasonably high golden parachutes. This proposal places no limit on long-term equity pay or any other type pay.
This proposal thus has no impact on the ability to attract executive talent or discourage the use of long-term equity pay because it places no limit on golden parachutes. It simply requires that extra large golden parachutes be subject to a non-binding shareholder vote at a shareholder meeting already scheduled for other matters. This proposal is relevant because the annual say on executive pay vote does not have a separate section for approving or rejecting golden parachutes. Please vote yes. Shareholder opportunity to vote on excessive golden parachutes. Proposal four.
The first shareholder's proposal seeks that the board adopt the policy for shareholder approval of named executive officers' new or renewed pay package that provides for golden parachute payments that exceed a certain value. The board has carefully considered the shareholder's proposal and, as described in a proxy statement, recommends a vote against this proposal for the following reasons. The company recently adopted an executive officer cash severance policy after consultation with numerous shareholders and upon the recommendation of the Board of Directors Compensation and Human Capital Committee. Under the policy, any new employment agreement, any severance, separation, or change of control agreement, or similar arrangement, and any new severance plans or policies with or applicable to any of our executive officers will not permit cash severance benefits to exceed 2.99 times the sum of the executive officer's base salary and annual target bonus without the approval of shareholders.
The Board believes that this policy is more carefully tailored and appropriate for the company than the one set forth in a proposal and allows the company to appropriately limit compensation while still being competitive in the market for talent.
The shareholder has moved for the approval of the shareholder proposal. The meeting is open for discussion relating to the proposal. If any shareholder would like to make a comment regarding this proposal, please submit your comment through the web portal or by email now. There are no comments that have been received.
At this time, I'd like the operator to open Evelyn Wagaman's line to present the second shareholder proposal. Operator?
Is the line open?
It is.
Oh, sorry. Good morning. I'm Evelyn Wagaman, and I represent People for the Ethical Treatment of Animals. PETA's modest common sense resolution concerns transparency in our company's transport of non-human primates within the U.S. and calls for accountability from the company to report to its shareholders measures that it is taking to mitigate public health risks. Labcorp transports thousands of monkeys annually on U.S. highways covering thousands of miles. Originating from Asia and Mauritius, these monkeys endure prolonged stress and weakened immune systems due to their long journeys confined in small wooden boxes in airplane cargo holds. After other companies import the monkeys, Labcorp transports them within the U.S. While federal law mandates veterinary inspections for monkeys transported across state lines within 10 days before shipment, recent events have highlighted lapses in our company's adherence to these regulations. In September 2022, Labcorp was cited by the U.S.
Department of Agriculture for transporting monkeys from its Wisconsin facility to Envigo in Texas without proper veterinary inspections. This failure to conduct timely veterinary inspections is not only a violation of the Federal Animal Welfare Act, but also poses significant risks to public health and to our company's reputation. As reported to the U.S. Securities and Exchange Commission in February 2023, Labcorp's Drug Development Division acknowledges the potential consequences of diseases carried by animal populations, including damage to inventory, harm to reputation, and financial liabilities. Monkeys can harbor numerous diseases, including tuberculosis, deadly diarrheal pathogens, West Nile virus, malaria, and Herpes B, all of which are transmissible to humans. The trauma and stress associated with international importation, warehousing, and subsequent domestic transport of non-human primates compromises their immune systems, increasing the likelihood that pathogens will spread.
The Centers for Disease Control and Prevention has revealed that macaques have been imported and subsequently left quarantine with a bacteria so deadly that it's listed as a Tier 1 select agent or bioterrorism agent, as well as with multiple species of mycobacteria, malaria, herpes B, simian retrovirus, hemorrhagic viruses, and other zoonotic bacteria and viruses. Last year, monkey breeding facilities in Mauritius experienced multiple TB outbreaks. Hundreds of monkeys were euthanized, and monkey exports had to be canceled. The threat is real, and it's escalating. Our company is a major player supporting a violent industry that causes immeasurable suffering to monkeys and threatens public health, all of which pose reputational and legal risks to the company. The situation demands transparency and accountability, and we respectfully request that you support our resolution. Thank you.
The second shareholder's proposal seeks that the board report to shareholders annually on non-human primates transported by the company within the U.S. and measures the company is taking to mitigate public health risks. The board has carefully considered this shareholder's proposal and, as described in the proxy statement, recommends a vote against this proposal for the following reasons. The board believes that the proposal, if enacted, would not further Labcorp's commitment to animal welfare nor effectively mitigate any related risks, would not provide additional meaningful disclosure to the public, and would not be a productive use of the company's resources. Animal research is critical and required by government bodies in the development of new, safe, and effective medicines, devices, and products that protect and save the lives of people and animals.
The company is committed to the respect and humane care of animals used in research and treats the animals it works with in research humanely with care, compassion, and respect, adhering to strict standards of ethical conduct and providing for their welfare. Labcorp believes that taking good care of animals is not only good science, but it's the right thing to do.
The shareholder has moved for the approval of the shareholder proposal. The meeting is open for discussions relating to the shareholder proposal. If any shareholder would like to make a comment regarding this proposal, please submit your comment through the web portal or by email now. There are no comments that have been received. I declare the poll shall now be open for voting. Any shareholders who have not yet voted or wish to change their votes may do so by clicking on the voting button on the web portal and following the instructions. Shareholders who have sent in proxies or voted via telephone or internet and do not want to change their votes do not need to take any further action. We will pause for a moment for any final voting. Thank you. The poll shall now be closed for voting.
We will pause another moment while the inspector of election tabulates the results of the vote.
I'm told that the inspector of election has completed the count of the votes and has reported the preliminary results to the secretary. Will the secretary please present the preliminary report of the inspector of election?
The inspector of election has reported to me that of the shares of Labcorp Common Stock outstanding on the record date and representative of the meeting, at least 64% of the shares voted have voted for the election of each of the nominated directors. At least 92% of the shares represented and entitled to vote have voted to approve the company's compensation of its named executive officers. At least 99% of the shares represented and entitled to vote have voted for the ratification of the appointment of the independent registered public accounting firm for 2024. Regarding the two shareholder proposals, less than 8% of the shares voted have voted in favor of the first shareholder proposal, and less than 9% of the shares voted have voted in favor of the second shareholder proposal.
Accordingly, the motions for the election of the nominated directors, the approval of the company's compensation of its named executive officers, and the ratification of the appointment of the independent registered public accounting firm for 2024 have passed. Separately, the motions for a shareholder vote on excessive golden parachutes and an annual report on the transport of non-human primates within the U.S. have not passed.
Thank you, Sandy. The secretary will file the final report of the inspector of election, including the final and complete tally of the votes with the records of the meeting in the record books of the company. This concludes the formal business of the meeting, and I hereby declare the meeting to be adjourned. Thank you for participating and for supporting the company.
We will now take general questions. As a reminder, only validated shareholders will be able to ask questions using the designated field on the web portal or through our investor relations email address at investor@labcorp.com. If you choose to submit a question by email, please include your control number in the email subject line in order for your question to be considered. As a reminder, this Q&A session is being webcast live this morning. In addition, remarks made today may contain forward-looking statements. Actual results could differ materially from those projected. The company undertakes no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events, or other factors.
So we've received one question. The question is, are more spinoffs contemplated? What does Labcorp look for in selecting a spinoff? We review our strategy at least once a year. Last year, we decided that our clinical development business would be better served to spin off. We decided after careful review that the other businesses had synergies and belonged well together. We evaluate our businesses and strategy on an ongoing basis and will continue to look at each business segment carefully as we go forward. Seeing no further questions at this time, we thank you again for your attendance at this morning's annual meeting of shareholders and for your. This meeting is now concluded. Thank you for joining. You may now disconnect.