Morning, everyone. Welcome to Altria Group's 2015 Annual Meeting of Shareholders, which I now call to order. I'm Marty Barrington, Chairman, CEO and President of Altria Group. I want to wish a warm welcome to everyone who's here today or if you're listening on our webcast. With me this morning are Denise Keene, Altria's General Counsel and Brandt Sergner, our Corporate Secretary.
Our remarks today contain certain forward looking statements and reference non GAAP financial measures. Please direct your attention to the forward looking and cautionary statements and reconciliations of non GAAP to GAAP measures on altria.com. The cards on your seats include the agenda, rules for our meeting and an investor highlights card. We'll start by presenting certain formal documents, proceed to the election of directors, vote on 2 compensation plans and then move to the vote on the selection of PricewaterhouseCoopers as Altria's independent registered public accounting firm. We'll then share a brief business update followed by a non binding advisory vote on the compensation of Altria's named executive officers.
A question and answer session will follow and then we'll vote on 3 shareholder proposals if properly presented. Brandt will report on
the preliminary voting results and then we'll adjourn. So, Brent, let's present the meeting documents. Thanks, Marty. I present together with affidavits of mailing a copy of the notice of meeting form of proxy proxy statement and annual report, which includes financial statements for the fiscal year ended December 31, 2014. The holders of record of business on March 30, 2015 are entitled to vote at this meeting.
87% of Altria's common stock is represented here today, so a quorum is present for transacting business.
Thank you. Please file the documents with the records of the meeting. I appoint representatives from Computershare, the transfer agent for Altria's common stock as inspectors of election. The inspectors should please now execute the oath and take custody of all proxies and the certified list of holders of common stock as of close of business on March 30, 2015. This list which is available for inspection throughout the meeting contains the names and addresses of all shareholders of record and the shares held by each.
The inspector's responsibility is to determine the number of shares represented at the meeting and to certify the vote of all matters presented. All proxies and ballots are confidential unless shareholders have written comments on them. We'll now distribute proxy cards to any shareholders in the room who haven't yet returned them. Shareholders who have already returned their cards or voted by other means do not need to submit a new card. So please raise your hand if you need a proxy card.
You. Upon conclusion of the voting, please return the card to an usher for delivery to the inspectors. I want to welcome our Board of Directors, all of whom are here today. Their skills, diverse experiences and perspectives provide Altria with strong leadership and thoughtful oversight. The election of the Board of Directors is our first agenda item.
Denise, please announce those nominees' names appearing in the proxy statement.
The nominees are Gerald L. Belisle, Martin J. Barrington, John T. Kathleen III, Dinyar S. Davitri, Thomas F.
Farrell, Thomas W. Jones, Deborah J. Kelly Ennis, W. Leo Kylie III, Catherine B. McQuade, George Munoz and Nabil Y.
Sakabe, each to hold office until the next annual meeting of shareholders or until his or her successor shall have been duly elected and qualified.
Thank you. Under our bylaws, the nominations are closed. Those in the room wishing to vote on the election of directors should please do so now. Our next item is the approval of the 2015 performance incentive plan. Denise, would you please present the matter?
I move the adoption of the following resolution, resolved that the 2015 performance incentive plan be approved.
Thank you. Those in the room wishing to vote on the 2015 performance incentive plan should please do so now. The next item is the approval of the 2015 stock compensation plan for non employee directors. And Denise, would you please present the matter?
I move the adoption of the following resolution. Resolve that the 20 15 stock compensation plan for non employee directors be approved.
Thank you. Those in the room wishing to vote on the 2015 stock compensation plan for non employee directors should please do so now. Our next item is the ratification of the selection of PricewaterhouseCoopers LLP as Altria's independent registered public accounting firm. Ken Lemelin from PricewaterhouseCoopers is with us Denise, please present the matter.
I move the adoption of the following resolution. Resolve that the selection of PricewaterhouseCoopers LLP as Altria's independent registered public accounting firm for the fiscal year ending December 31, 2015 be ratified.
Thank you. Those in the room wishing to vote on the ratification of PwC, so please do so now. We're now pleased to share with you a short business update. Shareholders are familiar with our business results through various means, including our 14 annual report, our presentation at the CAGNY conference and our Q1 earnings release. We also recently completed our 2014 Corporate Responsibility Report and all those materials are available at altria.com.
So rather than repeat all of that information here, we have prepared a card of highlights of the following four areas about which we will comment briefly. A high level summary of full year 2014 and Q1 20 15 operating and financial results, a focus on our people and work culture, our commitment to our communities and our corporate responsibility initiatives. So let's start with our operating and financial results. 2014 was a very a very strong year for Altria and its shareholders and we believe that Altria continues to be a terrific investment. We grew adjusted diluted earnings per share 8 percent.
We grew our dividend 8.3 percent and paid shareholders $3,900,000,000 in dividends. The Smokeable Products segment grew adjusted operating company's income 6.7 percent larger than the next 10 brands combined. Copenhagen and Skol combined achieved record retail share of 51.2% since the UST acquisition. Newmark expanded its MarkTenney vapor product nationally and acquired Green Smoke to complement its portfolio. And we delivered total shareholder return of over 34%, far outpacing the S and P 500 and the S and P Food, Beverage and Tobacco Index.
Turning to 2015, our businesses are off to a strong start against our full year objectives. Altria's 2015 Q1 adjusted diluted EPS increased 10.5% and each of our reportable segments grew their operating company's income and their margins. Therefore, we reaffirm our guidance for 20 15 full year adjusted diluted EPS in a range of 2 point $7.5 to $2.80 representing growth of 7% to 9% from our 2014 adjusted diluted EPS base of $2.57 We produced these excellent results with clear strategies, strong execution by our talented employees and our mission framework that continues to guide us. We achieve success through excellent people and we view each of our approximately 9,000 employees as leaders. Our companies operate in highly regulated, dynamic and competitive industries, so it's important we provide employees with the programs, training and tools to help them and our company succeed.
In 2014, we launched a company wide effort focused on simplification, innovation and diversity and inclusion, three areas that are critical to our culture and our future success. To help emphasize these areas, we conducted an executive leadership program for officers, a leadership summit for approximately 240 directors and vice presidents and a redesign program for first time managers. These efforts along with many others are helping our employees succeed. In fact, last month, Forbes Magazine We're also fostering diversity and inclusion through an Executive Diversity Council, which I chair and through the expansion of employee resource groups. In 2015 DiversityInc Magazine named Altria as one of the 25 Noteworthy Companies for Diversity.
Altria continued to strengthen the communities where we live and work. In 2014, our companies contributed more than $50,000,000 to non profit organizations in our local communities with a focus on positive youth development, protecting the environment and arts and culture. In 2014, the Civic 50 recognized Altria as one of America's most community minded companies. Our employees continue to contribute to our communities and we are extremely proud of their generosity. In 2014, they volunteered more than 50,000 hours to company sponsored service projects.
And the Altria Companies' Employee Community Fund, which our employees fund and manage, donated over $3,000,000 to more than 100 deserving organizations. Altria and its companies actively participate in resolving business relevant societal concerns. These include helping reduce underage product use, reducing the harm caused by tobacco products, helping reasonable regulation succeed and promoting a sustainable supply base. Kids should not smoke or use any tobacco products. Our tobacco companies Our and resist risky behaviors including tobacco use.
In 2014, our tobacco companies invested over $20,000,000 in our Success360 initiative, which promotes the healthy development of middle school kids. Underage smoking is at historic lows, but there's still more work to do. The CDC recently reported an increase in e vapor e vapor usage among youth. Our companies are taking steps to help address this issue. For example, Altria and Newmark are advocating for e vapor minimum age laws at the state and federal levels and so far 44 states have passed this legislation.
Also Newmark requires retailers who accept its promotional programs to sell Mark 10 e vapor products only to consumers old enough to buy tobacco. For adults who continue to use tobacco products, a growing body of evidence that appeal to adult tobacco consumers. We believe that tobacco companies continue to focus on developing lower risk products that appeal to adult tobacco consumers. We believe FDA has an unprecedented opportunity to advance public health goals by recognizing that some types of tobacco products may have significantly lower risk compared to cigarettes. For several years, our companies have worked with various stakeholders, such as the Farm Labor Practices Group and the Elimination of Child Labor and Tobacco Foundation to address issues such as child labor, grower and worker training and farm labor contractor compliance.
We are a founding member of the U. S.-based Farm Labor Practices Group and we lead its training and education task force. The task force recently rolled out enhanced training on labor management, including how to prevent green tobacco sickness. We've helped design this training for an estimated 10,000 growers in 11 states in 2015. So the executive leadership team and I are very pleased with Altria's strong business performance and the momentum of our company.
We thank our talented employees for delivering strong results and for their commitment to our mission and values. Now, we'll have an advisory vote to approve the compensation of our named executive officers. While this vote is non binding, the compensation committee intends to consider its outcome when making future decisions for our named executive officers. Describes, we design these programs to align the interests of executives and shareholders, the company's mission and business strategies and reward the achievement of corporate and individual performance goals. At the 2014 annual meeting, nearly 94% of the votes cast approved the compensation of our named executive officers.
The Board recommends that shareholders approve on an advisory basis the compensation for our named executive officers as described in the proxy statement. So those shareholders in the room wishing to vote on this matter should please do so now. We'll now transition to our 30 minute question and answer session. To ask a question, please use one of the microphones in the aisle. We'll alternate between them until our time is up or there are no further questions and we have ushers back there to assist you.
We welcome this opportunity to hear from you. So to provide everyone who wishes to ask a question and opportunity, each speaker should please limit his or her question to 2 minutes. We have a lighting system that will help guide us. The yellow light means 30 seconds remains for the question and a follow-up question after all other shareholders have asked theirs. And if there's not enough time for all the questions today, please complete and return a comment card and we'll respond to you promptly.
So please identify yourself and address your question to me and let's begin.
Good morning, Mr. Barrington. It's Ann Gerken with Davenport. Hi, Ann. Congratulations on a terrific Q1.
Thanks.
And strong start to the year, where you grew your reported cigarette shipment volume, improved margins and delivered price realization. Mr. Barrington, what is the sustainability of such strong in the current environment as the year unfolds?
Well, we've given our guidance for the year, Ann, and I think it reflects the confidence we have in the business. We've been growing in line with our long term aspiration of 7% to 9%. When you look over the last 5 years for example, we've been at about 8%. The total shareholder return, we had 34.5% last year, 30% the year before that. And if you look at it over the 5 year period, you can see how strong it is.
The industry dynamics right now are fairly strong. We have to come and earn it every day. But with the talented people we have and the clarity of our strategies, we're pretty confident about the guidance we've given and I appreciate your comments about our business. Let's go over here, sir.
Yes. Hello, Chairman Barrington. My name is Michael Schbach and I represent the AFL CIO. I am here today to give you a letter signed by over 40 organizations that are part of the Child Labor Coalition. This letter is a follow-up to the Coalition's June 24, 2014 letter sent to Altria aligning a number of steps to eliminate child labor from the tobacco supply chain.
I'm wondering if I can give this to one of your and then present it to you. Now the Child Labor Coalition is writing out conditions and establish a committee that can resolve issues for tobacco workers and growers when they arise. The Child Labor Coalition asked that Altria sign a memorandum of understanding with FLOC to negotiate recognition of the Dunlap Commission regarding tobacco growers and farm workers in your supply chain. The Dunlap Commission has been successful in in establishing a private system of union recognition and dispute resolution between corporations, growers and workers. Agricultural workers are not covered by U.
S. Federal labor law. So there is no process in place for farm workers to use to organize and exercise their freedom of association. The commission would set out rules and regulations with participation of all sides including the tobacco industry to mediate differences and address the long term challenges workers and their families face in the tobacco industry. The expansion of the Dunlap Commission proposed by FLOC established this is field based monitoring and a resolution system for labor rights abuses, including child labor and makes provisions for remedies when appropriate.
This would be an important counterpart to your increased commitments to end child labor. Mr. Barrington, the fact is that there is no child labor on farms in North Carolina where tobacco farm workers are covered by a flock collective bargaining
Yes. Why don't can you close? We've run a bit over. I don't want to cut you off, but if you could maybe close, I'll try to respond. I think I have my first.
I think it's 30 seconds. That's okay. Take a second and close, please.
Okay. Thank you. The Child Labor Coalition urges you to boost your efforts to combat child labor by signing an agreement with Flock to participate in the Dunlap Commission process. Mr. Chairman, can you provide the Child Labor Coalition with a contact at Atria with whom we can discuss this issue.
Thank you very much for your comments. Welcome to the meeting. We're glad you're here. Let me talk about 2 aspects of what you raised. 1 is the right of association of labor and the other is the child labor issue.
I'll tell you how we're working on that. And then of course, we would welcome the opportunity to continue our dialogue with you and others that we've been speaking to about the issue. You listen on rights of association, we support the rights of workers to organize. No stronger proof of that I think is than in the many labor agreements we have in our own factories. Many of our factories as you know are unionized.
We have always enjoyed excellent relationships with our labor unions who represent our people and we support that. We say the same thing to our growers in the supply chain, which is we call upon them through our supplier code of conduct and our contracts to respect the rights of workers including on the farm. So, they're not our employees of course, but they do work for the growers and we've called on them to align themselves against the approach we've taken in terms of respecting the rights of association. With regard to child labor, I think you're familiar with all the steps we've taken in this regard, some of which I mentioned in my remarks. We have belonged to the Eliminating Child Labor Foundation for many years and we've been active there.
We were a founding member of the Farm Labor Practices Group, which is talking about this issue and taking steps to improve it. You probably know we changed our contracts this year to require that no one work on a farm in the United States save certain exceptions for family farms and religious communities. Less than 16 and indeed if they are less than 18, we now require parental consent. That all represents progress that we have made with your group and others who are like minded on the issue. We support many of the issues and we're happy to engage in the continuing dialogue with you.
And I appreciate you coming to share your perspective morning. I need to go over here to forgive me. You can ask a follow-up question after others finish, if you could please. Let me just go to this gentleman here to respect the rule.
Thank you. Good morning, Mr. Barrington. Edward Swede, a shareholder from Massachusetts. Hi, Sweda.
Hello. According to Altria Group's most recent Form 10 ks filed with the SEC, an unfavorable outcome or settlement of pending tobacco related or other litigation could encourage the commencement of additional litigation. Damages claimed in some tobacco related or other litigation are significant and in certain cases range in the 1,000,000,000 of dollars. Now just last month, the Boston Globe reported on an upsurge of tobacco product liability lawsuits being filed in Massachusetts and that was spurred on by a recent ruling from the state Supreme Judicial Court that is favorable to plaintiffs in those cases. Moreover, L3A's Form 10 ks also states on page 67 that, After exhausting all appeals in those cases resulting in adverse verdicts associated with tobacco related litigation since October of 2004, PM USA has paid in the aggregate judgments and related costs and fees.
They paid totaling approximately $144,000,000 as of December 31, 2014. So my question is, why shouldn't Altria's shareholders and investors expect the company to continue to pay judgments in the 100 of 1,000,000, if not 1,000,000,000 of dollars in the years to come? Thank you.
Thank you for your question Mr. Sweet. Welcome back to the meeting. It's nice to see you here again. I'm also pleased to know that someone reached the 10 ks after all the work that we put into it with the care that you do.
So thank you. The litigation is described there very comprehensively I think and very clearly. Litigation presents risk. It presents risk to this company and others, but it is also true that we have considerable experience in managing that risk. And I think if you look at the track record for Altria and Philip Morris over the years, you see that it has been extremely well managed.
The approach we take is to defend the cases strongly and vigorously and you overwhelmingly see that From time to time, a matter may present itself in which we have a unique opportunity to resolve the matter. And if we think it's in shareholders' best interest to do that, we will go ahead and to do that. But I think actually if you look at the curve of tobacco litigation over the last, I don't know, 7 to 10 years, you will see that it is not up at all. In fact, it is sharply down. And I think that's because we have managed it and we have addressed the challenges that we've had in litigation that you're pointing out.
So again, welcome back to the meeting and thank you for your question. Yes, sir, I'll go here.
Good morning.
Good morning.
My name is Justin Flores,
Vice President of the Farm Labor Organizing Committee. And I've been participating in the FLPG meetings that were referenced. I first want to say that I think Altria possibly more so than any other company has put a lot of effort into the FLPG and we think that represents a good first step. I wanted to share a frustration at the FLPG that I think that our members share that I think comes from the fact that it's been 3 years and certainly the tobacco farm workers have not seen any real change in conditions, wages, housing, things of that nature out in the field. I think that comes from this sort of circular problem, which is that most of the companies would like to put all their efforts into the FLPG as a multi stakeholder group.
But at the same time, real changes in the way the company buys tobacco can't happen there because of antitrust considerations. So we kind of feel like we're sort of being bounced around little bit. There's really good conversation in the FLPG, but no real way to make change in the way the company buys tobacco. And with that in mind, in October of 2014, our President, Baltimore Velasquez sent in a proposed memorandum of understanding, as Michael mentioned, to ask Altria to sign an agreement that would really make a real change in the way that tobacco is purchased by Altria to guarantee certain labor rights in the supply chain. I have a copy of that and similarly would like to get it to you and ask a similar question if there's a particular contact person that you would recommend that we speak with about this memorandum of understanding, which I think has the very serious potential to end a lot of the problems that we see in the supply chain.
Okay. Thank you very much for those comments Mr. Flores and welcome to our meeting. I'll see that the usher gets that in the right hands and we'll have someone to get back to you. We have members of our corporate responsibility team, members of our lease buying team and members of our procurement organization, all of whom I know have been active with the Farm Labor Practices Group.
Again, I don't want to repeat the comments I made earlier about it except to observe that we believe in the rights of association for workers. We simply do not employ the individuals about whom you're speaking. They are employed by the growers. We have made clear to our growers what we expect in that regard, but we can't compel them to do much of what I think has been called for by the initiative. But that's not to say that more progress can't be made and we're happy to talk about that some more and I'll make sure that the materials you've given get in the right hands.
Thank you again for your comment. I'll go over here. Good morning, sir.
Good morning, Mr. Chairman. My name is Julian Martinez and I represent CERA Jobs For Progress, a national non profit community based organization serving the economic needs of Hispanic Americans. We would like to take this opportunity to thank Altria for commitments to the Latino community. From its diverse Board of Directors to its programs in the Bayou, you have proven yourselves to be leading corporate American in diversity, especially in serving the Latino community.
It helps that you have a prominent Latino serving on your Board of Directors who's very involved in giving back. We appreciate your participation in Hispanic Association on Corporate Responsibility, Corporate Inclusion Index. Altria has increased its ratings since the very first rating survey from 50 in 2,009 to 70 in 20 14. As you know, the Hispanic population is increasing dramatically. This means companies must harness the power of the Hispanic community and employ as a means of sustaining their competitive edge in an ever changing economy.
The continued underrepresentation throughout Corporate America means companies are not leveraging this talent to their fullest potential. Corporate America needs to understand the work that must be done to increase the pipeline of Hispanics into the upper ranks of Corporate America and to further develop the Hispanic entrepreneur and middle class. It is truly a pleasure to see Altria leading the way. Thank you.
Mr. Martinez, thank you very much for those comments and welcome to the meeting. We're always glad to have you here. We share our commitment to diversity and inclusion. You heard me speak about it in our remarks this morning.
There's always more to do, but we're very, very proud of the efforts all of our employees are making, our Board of Directors is making, our executive team is making. We're trying to create a work culture where everyone is welcome. Everyone is welcome and they're challenged to contribute. And I thank you again for your remarks. Yes, sir, I'm over here.
Good morning, Mr. Barrington. My name is Howard Baerog, and I live up in the Fredericksburg area.
My question to you today is what is Altria doing to reduce the illegal trafficking
of tobacco
products out of the state of Virginia?
Thank you very much for your comments and thank you for traveling to the meeting. Glad you're here. We actually are working very hard on that. You may know that we have an entire department that we call brand integrity that works on this. We are opposed to the kind of trafficking that you're making reference to.
We have worked extremely closely with Virginia law enforcement and others. We help them develop cases. We teach them how to distinguish contraband and counterfeit product from genuine product. And we work with our trade partners to try to protect their legitimate trade. It does no one any good to have cigarettes moved across borders.
Unfortunately, this has been created by some states, particularly New York State, where they have raised the excise taxes to a point that it has incented this kind of criminal behavior. We oppose it and we have worked very hard on it. We have quite a long section on altria.com and there's also a chapter in our corporate responsibility report if memory serves on all of the efforts, which I've just given you a sort of a high level view of. So perhaps you could refer there for more detail, but we're opposed to it and we're working on it. Thank you again for your question.
Yes, sir.
Mr. Barrington, my name is Michael Crosby. I'm a Capuchin Franciscan brother from Milwaukee. And I'd like to address this to you, but I'd like to really talk to the shareholders because every one of our dividends is enhanced by undocumented workers, which involves illegality. Mr.
Barrington, you just responded to the previous question that you're against illegal trafficking of tobacco products. This company does not seem to be that much against illegal trafficking of human beings who are coming into our fields to produce and harvest the tobacco. You called the trafficking of tobacco products criminal behavior. For me, it's criminal behavior when this company is aware of the illegality of having so many undocumented workers, some people say up to 70% of all farm workers in the United States are undocumented. That means this company is involved in illegal behavior, maybe not directly, but indirectly and it knows what's going on and doesn't do anything, so there's culpability.
This is the elephant in the boardroom. This is the elephant in shareholders meeting that our dividends are coming on the back of illegal activities. I know that's going to be our shareholder resolution, but I'd really like you in this venue to say what is the difference at the front end to have what I consider illegal activities enabling farm workers to come across the border to harvest the products that we use than the illegal activities of the products that are crossing state foundries. What's the difference around illegality and criminal behavior when the United States government says it is against both of these? But it seems on the one you are working against it strongly, but on the other and I'm not talking Farm Labor Practices Group because that's what happens when they get to the farm.
I'm talking about what happens to get across the border to the farm. What's the difference and what's the percentage of workers that you think are undocumented that are working in our fields? Because you've got to have an insight. And if you say you don't,
I don't think that's honest. I understand the thrust of your question and your time has expired a bit. So let me move on in spirit. We oppose the use of exploitive or forced labor. And we say that.
And more than that, we do something about it. I want to give you a chance to speak, if you could let me to try to respond to the question you posed to me and then if there's time you can ask a follow-up. I just want to make sure that shareholders understand what the facts are. The facts are that we oppose exploiting labor on the farm or elsewhere. We oppose forced labor.
We say so. I would refer you to our website. I would refer you to our corporate responsibility report and we describe there, Father, the steps that we have taken. So with all due respect, it is not accurate to suggest that we have done something wrong or that we haven't taken steps. We have.
We put it in our supplier code of conduct. We tell the growers that they should not be using forced labor or exploitive labor on our work. We put it in our supplier code of conduct and then we audit against that expectation. And we audit with our own people and we audit with 3rd parties. We have done work at the Farm Labor Practices Group.
You're probably also familiar that the use of the kind of labor that you're referring to is also illegal under the United States Tobacco Good Agricultural Practices guideline. And who was at the forefront of getting that developed with many others? It was Altria. So I'm sorry, it's just not accurate to suggest that we haven't done anything in this regard. I appreciate the problem.
Altria appreciates the problem. Immigration is a big problem. But to suggest that Altria is somehow complicit that, I'm sorry, it's just not accurate. And on behalf of Altria, I have to say I respectfully disagree with you. So thank you for coming and sharing your perspective.
Yes, sir. Mr. Chairman, Michael Schpopi. Yes, welcome back. Yes.
First of all, I wanted to say thank you that Altria's treatment and respect for freedom of association of its manufacturing workers is great. And we're very thankful for that for your attitude as a company. But the reality is that there is no process. There is no NLRB that covers agricultural workers. So unless a process is created, then the workers don't in fact have a mechanism through which the tobacco farm workers, who are working on contract farms do not have that mechanism to choose a union.
And again, my question was, Mr. Chairman, can you provide the Child Labor Coalition with a contact at Altria with whom we can discuss the issues that have been raised in the letter that has been sent to you?
Yes, sir. Thank you for following up. The answer is yes, we will. And I committed to that in my reply to Mr. Flores and we'll make sure that you get that name properly.
Okay.
At Reynolds, they have a clock that goes if there's 2 minutes then
Light over there.
Thank you very much for that observation and thank you for coming to the meeting. All right everybody. Everyone should please now return to their seats. And we'll now hear presentations on 3. I'm sorry.
I didn't mean to go past you ma'am. I apologize.
I'm sorry, Mr. Barrington. Just a very quick question.
No, no. Take your time. I'm sorry. I didn't see you.
Kathy Rowan.
Yes. Welcome back.
Thank you. You had mentioned immigration and forgive me if you have made statements publicly or previously. What is your position on immigration reform?
Yes. Actually our government affairs team is pretty active in working on that issue. Immigration is a big public policy issue as you know. It's being worked on in the Congress of the United States. We have certain interests.
For example, it's important to us that we have access to certain skilled labor. So the visa program needs reform. And so we've been working to make sure that we're covered in that regard. As we've discussed this morning already, there's lots of work that could be done with respect to the agricultural workers. So it's not core to our business, but it's one of the issues that's in the public sector that relates to our ability to get talent and to source our product.
And that's how we've been doing through our government affairs operation. Okay. Sorry, again for cutting you off. I didn't see you. Okay.
All right, Brandt, can we go now? All right. Now I can go. All right.
We'll now hear presentations
on 3 shareholder proposals, including included in the proxy statement and then we'll vote on them if they're properly presented. We believe shareholders should vote against these proposals for the reasons set forth fully in the proxy statement. So in the interest of time, I won't elaborate on our views today, but we encourage all shareholders to read the proposals and our responses. Proponents should first identify themselves and please limit their presentation to 4 minutes or less and each speaker commenting on the proposal to 2 minutes or less. We'll devote no more than 8 minutes to each proposal.
As before, our lighting system will help us manage our time. And thank you and again for your cooperation, the lighting system not the province of St. Joseph of the Capuchin Order for Proposal 6 Please present the proposal.
Yes, Mr. Barrington. I'm a member of the province of St. Joseph. We're a group of Franciscan priests and brothers and I happen to be a priest.
I'm against sin, but we're all sinners.
When
you say, Mr. Barrington, you are against forced labor and exploited labor and that you have independent monitoring to support your position. And yet everybody knows that 70% of farm workers in the United this association going on. And when there's this association, anybody can look at data and say this is what is true, but other people say, find ways to say, well, I won't deal with it. Finally, at the Farm Labor Practices Group at the last meeting, after we filed our shareholder resolution with all 3 of the tobacco companies and the 2 tobacco growers, I'll try I mean Alliance 1 and Universal LEAP, we finally said we're going to address this issue of the front end of the undocumented workers coming.
Undocumented workers. That's what our resolution is asking undocumented workers. That's what our resolution is asking you in your conscience, not in your pocketbook. This is a moral question. Do I have the right to have dividends coming from illegal activity of exploitation because one of those workers coming has been exploited because 58% as we say in our shareholder resolution Immigration reform has been obstructed by Republicans and this company is probably what 80%, 90% of all its donations are going to Republicans undermining immigration reform.
So there's disconnect all over the place. And I guess what I would like given your response to me earlier is just for us FedNet, it's a huge problem. And let's find ways politically, corporately, industry wise to make it right for exploited so that our pocketbooks aren't expanded on that exploitation. That's all we're asking. And we would once we get to the Farm Labor Practices Group, once they're at the place, I think the company and the others are doing the best we can.
But the elephant in the boardroom is what happens on the way to get here. That's the issue that this resolution asks you to support. And so I conclude by asking you to vote your conscience, not your pocketbook or along with your pocketbook. Thank you.
Thank you, Father. Are there any comments on the proposal? We have a comment here. Yes, Mr. Sweeten.
Thank you, Mr. Barrington. Just sort of underscore also how relatively modest actually this resolution is in terms of the specific request to have the company's Board of Directors create a policy that all its suppliers throughout the tobacco procurement supply chain verify with independent monitoring, which is quite important, verify their commitment and compliance regarding non employment directly or indirectly of laborers who have had to pay to cross the U. S. Border to work or once here to work on U.
S. Farms. And I know in the response the company describes what has been done, but what I have not seen and maybe it's somewhere else on the website or elsewhere, but has there been any measurable progress that the company can point to regarding any efforts to address this problem? Because the status quo currently is still way out of whack with what's legal and it's certainly way out of whack with what is moral. So obviously, I agree with Father Crosby on the basic point that everyone in this room is against forced labor and can state that.
But the actions needed to change the status quo need be greatly increased. This resolution quite modest and frankly disappointed that the company officially came out in opposition to it. Thank you.
Thank you for those comments. Are there other comments on this proposal? All right. Those shareholders in the room wishing to vote on this proposal should please do so now. Will the representative from Trinity Health for Proposal 7 please present the proposal?
Thank you. Good morning again, Mr. Barrington.
Welcome back.
Thanks. Members of the and fellow shareholders, my name is Kathy Rowan representing Trinity Health. And along with Catholic Health Initiatives, the Sisters of St. Dominic of Caldwell, New Jersey, the Sisters of Charity of St. Elizabeth and the Sisters of St.
Francis are proponents of Proposal 7, which asks our Board to initiate efforts to develop materials informing tobacco users who live below the poverty line or have little formal education about the health consequences of smoking our products, along with market appropriate smoking cessation materials. We appreciate the efforts Altria has made to support programs and practices to reduce underage tobacco use as well as new initiatives to strengthen its website. Our proposal however speaks to the high prevalence of smoking among people living in poverty, people with disabilities and minority populations. Many of these are our fellow citizens, who have the fewest resources, the least amount of social support and the least access to cessation services. As the Centers For Disease Control has said, the high smoking prevalence observed among some population group underscores the need for enhanced implementation and reach of proven strategies to prevent and reduce tobacco use among these defined by the actions a company takes to address society's expectations.
I think we've all become more aware in our country of the reality of income inequality. It's part of our national debate today. There is a growing expectation in society to address inequality in whatever ways we are capable. We believe shareholder proponents believe that reducing ethnic and racial disparities in tobacco related health conditions is a national public health priority that could have positive effects for our economy and our society as a whole. Expanding Altria's corporate responsibility to take the actions suggested by our proposal would be a real demonstration of leadership
and
I urge our fellow shareholders to support our proposals. Thank you.
Thank you very much for your comments. Are there comments on the proposal?
Yes. I'd like to just tell a couple of stories that would support this. Where I live in Milwaukee is downtown. We're serving today 300 to 500 people a meal in the evening. Headquarters in Detroit is in the East Side, Near East Side, a very rough area, and we're serving 100 to 2000 meals today.
The majority of our guests are either low income and or less educated. And all the data is showing that these are the highest numbers of smokers. So it would seem to me that if we can exploit lower educated and lower income people, we then would have a parallel
a
and there was a young woman with 2 little kids, and her husband was away. And she was smoking in front of those kids. And something in me just rebelled. And I went up and said, Ma'am, we ask you not to smoke in front of your children. She said, I the right to do what I want.
I said, you may, but not on this property. Not on this property. You are not allowed to smoke in front of your children on this property. We don't say anything about people who are adults who smoke in front of each other. That's an adult choice.
Those children are exploited by the smoking. That woman thinks it's her right, not the right of the children, did not ingest secondhand smoke and to have the consequent health problems as a result. This resolution is very minimal. It's just saying find a way to address this problem since this problem is benefiting us because the majority in terms of any one group of our smokers are this group. So let's make sure that again in conscience we're doing the right thing.
So I support this resolution.
Thank you, Carter Croft. Are there other comments on this proposal? All right. Those shareholders in the room wishing to vote on this proposal should please do so now. And would the representative from AFL CIO for proposal 8 please present the proposal.
Okay. My name is Justin Flores with the Farm Labor I'd like to speak in support of Proposal 8. This is a proposal to protect both Altria and the farm workers in the Altria supply chain from the devastating effects of green tobacco sickness or GTS. The proposal is carefully crafted to help Altria deal with the issue and ask for a report on the steps that the company has taken to reduce GTS for farm workers in the supply chain with most importantly with a quantitative summary of the methods and results of the company's inspections of the suppliers. I spend most of my time during the tobacco season out in labor camps speaking with farm workers about issues.
And I can tell you that health and safety GTS and heat stroke are very important to our membership. We are very much aware that there are some serious labor abuses going on in the tobacco supply chain. This certainly isn't Altria's fault, but we believe Altria can do a lot to improving conditions for the men and women that provide tobacco to the company. But first, we need a real honest assessment of what's going on, on the ground, so we can discuss openly and honestly how to deal with it. The Board's statement against this proposal is a one page summary of some of the steps down and really affect what's going on in the ground.
Down and really affect what's going on in the ground. But we need a real assessment of what's going on beyond sort of cosmetic approaches that can provide some real transparency to what's going on on the ground. One example is that the phrase personal protection equipment PPE is referenced a lot on the website and some of the materials. But there's no statement on what that means. Tobacco farm workers I know take a garbage bag that they bought with their own money.
They cut a hole in the top, a hole in the sides and they put it on as a poncho. And that's really the only protective equipment that anybody gives them to work in tobacco to protect from GTS. I'm not sure from the materials I've seen if that qualifies, if that means that that grower is in compliance because those garbage bags are on those workers. I think we really need to take a look honestly about what's going on, how the audits are being done, what the results are, what the flaws are and how we can correct them. And our membership and our union is very willing and very interested in working with Altria to improve the assessment and to improve the condition and the health and safety in your supply chain.
I think this proposal is a good first step. And so we urge folks to vote in favor of this proposal.
Thank you, Mr. Flores. Are there comments on this proposal? Thank you. Those shareholders in the room wishing to vote on this proposal should please do so now.
All matters to be voted on now have been presented. If you need to do so, please complete your proxy card, raise your hand and an usher will collect your card. Okay. Thank you. Since all shareholders have had the opportunity to vote, the polls are now closed.
The ushers should now have collected all the proxies report?
The inspectors have completed the preliminary count of the vote. The preliminary voting results are as follows. Shareholders have elected each of the nominees incentive plan has been approved with more than 95% of the shares voting, voting in favor. The 2015 stock compensation plan for non employee directors has been approved with more than 95% of the shares voting in favor. The selection of PricewaterhouseCoopers LLP is Altria's independent registered public accounting firm for the fiscal year ending December 31, 2015 has been ratified with more than 98% of the shares voting in favor.
Shareholders have approved on an advisory basis the compensation of the company's named executive officers with more than 96% of the shares voting in favor. Proposal 6 the province of St. Joseph of the Capuchin Order has been defeated with 95.02% of shares voting on proposal voted against and 4.98% voted in favor. Proposal 7 from Trinity Health has been defeated with 95.33 percent of shares voting on the proposal voted against and 4.67 percent voted in favor. Proposal 8 from AFL CIO has been defeated with 94.5 5% of shares voting on the proposal voted against and 5.45% voted in
favor. That concludes the preliminary report. Thanks, Grant. Please file the inspectors' report, the oath of the inspectors, their certificate and the proxies with the records of the meeting. We'll post voting results on our website with a press release following the meeting and we'll file the final voting results with the SEC on a Form 8 ks.
I want to thank everyone again for coming today or for listening on the broadcast and thank you for your continuing confidence in Altria. Our meeting is adjourned.