Good day.
Good day, and welcome to the Omnicom Group 2020 Annual Meeting of Stockholders. I would now like to turn the conference over to John Wren. Please go ahead.
Good morning. It's now 10:00 A.M., and I hereby call to order Omnicom Group's 2020 Annual Meeting of Shareholders. I am John Wren, Chairman of the Board and Chief Executive Officer, and I will chair today's meeting. Joining me are Phil Angelastro, Executive Vice President and Chief Financial Officer of the company, and Michael O'Brien, Executive Vice President, General Counsel, and Secretary of the company. Michael will act as Secretary for this meeting. I would now like to introduce the Board of Directors nominees, Board member nominees who are joining us today: Mary C. Choksi, former founding partner and senior manager, Strategic Investment Group; Leonard S. Coleman, Jr., former president of National League of Professional Baseball Clubs; Susan S. Denison, former partner of Cook Associates; Ronnie S. Hawkins, managing director, Global Infrastructure Partners; Deborah J. Kissire, former vice chairman and regional managing partner at EY; Gracia C.
Martore, former President and Chief Executive Officer of TEGNA Inc., Linda Johnson Rice, Chairman and Chief Executive Officer of Johnson Publishing Company, and Valerie M. Williams, former partner at EY. In addition, Jennifer Friedman and Michael Santay of KPMG, the company's independent auditors, are in attendance today. To conduct an orderly meeting, we ask that participants abide by the rules of conduct of the annual meeting made available to them either in person or on the virtual meeting website. Mr. O'Brien has an affidavit of Equiniti Trust Company certifying to the timely mailing to the shareholders of record at the close of business on April 22, 2020, with shares in the company's 401(k) retirement savings plan, the combined notice of the annual meeting of shareholders, and the proxy statement, proxy card, and the 2019 annual report.
And to the timely mailing to all other shareholders of record at the close of business on April 22, 2020, of the notice of internet availability of proxy materials. It appears from the affidavit that the notice of this meeting has been duly given. A copy of the affidavit of mailing is available here today and will be filed in the records of the company together with the minutes of this meeting. The Board of Directors has appointed Tracy Ballish of Equiniti Trust Company as inspector of the election. I also appoint Eric Cleary, Assistant Secretary of the company, to act as an additional inspector of election, and he's here at this meeting. Will the secretary please report the number of common shares outstanding and entitled to vote at this meeting and whether or not quorum is present?
At the close of business on April 22, 2020, the record date for the 2020 annual meeting, there were 214,282,876 shares of common stock outstanding and entitled to vote at this meeting. Holders representing a majority of these shares are present in person or by proxy, and therefore a quorum is present.
Since the notice of the meeting was duly given and a quorum is present, this annual meeting of shareholders is duly convened and authorized to proceed with business. The first item on the agenda is the election of the nine directors included in the proxy statement, each to serve until the year 2021 annual meeting of shareholders and each to hold office until his or her respective successor has been duly elected and qualified. The board recommends the election of each of the following persons as directors of the company for the term of one year that will expire at the 2021 annual meeting: John D. Wren, Mary C. Choksi, Leonard S. Coleman, Jr., Susan S. Denison, Ronnie S. Hawkins, Deborah J. Kissire, Gracia C. Martore, Linda Johnson Rice, and Valerie M. Williams. The second item on the agenda is the advisory resolution to approve the company's named executive officers' compensation.
The board recommends that the following be adopted: resolve that the shareholders of Omnicom Group approve on an advisory basis the compensation of the company's named executive officers as disclosed in the company's proxy statement for the 2020 annual meeting of shareholders, pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the compensation discussion and analysis, the summary compensation table 2019, and the other related tables and disclosures. The third item on the agenda is the ratification of the appointment of KPMG LLP as the company's independent auditors for the fiscal year ending December 31, 2020. The board recommends that the shareholders vote for ratification of the appointment of KPMG LLP as our independent auditors. The fourth item on the agenda is a proxy access amendment shareholder proposal. The shareholder proposal and its supporting statement are included in the proxy.
The Secretary will now read the resolution.
Resolved. Shareholders request that our board of directors take the steps necessary to enable as many shareholders as may be needed to aggregate their shares to equal 3% of our stock owned continuously for three years in order to enable shareholder proxy access.
This proposal has been submitted by Mr. John Chevedden. The chair recognizes Mr. Chevedden for a period of three minutes. Will the operator please unmute the line?
He is unmuted.
Hello, this is John Chevedden. Can you hear me okay?
Yes.
Proposal Four: Improve Shareholder Proxy Access. Chair's request that our board of directors take the steps necessary to enable as many shareholders as may be needed to aggregate their shares to equal 3% of our stock owned continuously for three years in order to initiate shareholder proxy access. Under this proposal, it is likely that the number of shareholders who participate in the aggregation process would still be a modest number due to the administrative burden on shareholders to qualify as one of the aggregation participants. Plus, it is easy for management to reject potential aggregating shareholders because the administrative burden on shareholders leads to a number of potential technical errors by shareholders that management can quickly reject. Shareholders should be able to select the ownership structure of a group requesting proxy access.
Shareholders are in the best position to know whether it will be more practical to have a few big shareholders or a great number of smaller shareholders and should not be saddled with inflexible rules. The directors of many companies promote one size does not fit all in their proxies, and this principle should apply here. Our directors should support this proposal because Omnicom directors said in 2019 that they were in favor of flexibility and were opposed to one size fits all. Proxy access is a means to hasten director refreshment. Omnicom directors each received 35 times as many negative votes as the two best performing Omnicom directors in director votes in 2019. The three leaders in negative votes were Lead Director Leonard S. Coleman, Jr., Executive Pay Committee Chair Susan S. Denison, and Governance Committee Chair Robert C. Clark. These directors each had from 18-27 years long tenure.
Long tenure can take a toll on director independence. Omnicom executive pay was rejected by 9% of shares in 2019 when a 5% rejection is normal for a well-performing company. Meanwhile, Omnicom stock declined from $73 to $63 in spite of share buybacks in five years of a mostly robust stock market. The largest shareholders of a company can be the least likely shareholders to use shareholder proxy access. It can be more complicated for large shareholders to use shareholder proxy access. The shareholders who ask for proxy access must do substantial administrative work to initiate proxy access. Management said in effect that it is too much for management to do a proportional amount of administrative work when that is part of their day job. Plus, management can outsource much of the administrative work to a low-cost provider.
Based on the shareholder proposals during the past decade, the Omnicom shareholders seem to be mostly passive and thus not inclined to make use of proxy access. All the more reason it should make sense to no longer disqualify any shareholders beyond 20 shareholders who together must own $400 million of Omnicom stock in order to simply.
Mr. Chevette.
Shareholder proxy access. Just concluding, please vote yes. Improve shareholder proxy access proposal four.
Thank you. Will the operator please now mute the line?
Muted.
The board unanimously recommends a vote against this proposal for the reasons set forth in the proxy statement. We will now proceed with voting on these matters. Those attending online should cast their ballots now if they have not already submitted their votes, and as the polls will close momentarily. Have all the shareholders and proxies present had an opportunity to vote? The polls are now closed. I believe the inspector of election has completed tallying the votes. Will the secretary please report on the preliminary results of the vote?
The Inspector of Election reports that holders representing 89% of the shares of common stock entitled to vote at this meeting are present in person or by proxy, and therefore a quorum has been present and acting, that a majority of the shares of common stock voting at this meeting have been voted in favor of the election of each of the nine nominees for director. For item two, with respect to the advisory resolution to approve the company's executive compensation, 91% of the shares of common stock voting at this meeting have been voted for, and the advisory resolution regarding the company's executive compensation has been approved.
For item three, with respect to ratification of the appointment of KPMG, 98% of the shares of common stock voting at this meeting have been voted for, and the ratification of the appointment of KPMG as the company's independent auditors for the 2020 fiscal year is approved, and finally, for item four, with respect to the proxy access amendment shareholder proposal, 33% of the shares of common stock voting at this meeting have been voted for, and 67% have been voted against, and the shareholder proposal is not approved.
We have completed the formal business scheduled for this meeting, and this meeting is adjourned. We will now be glad to answer questions submitted by shareholders. We ask that you abide by the rules of conduct that were previously distributed.
We received the question. The first question we received was, when was the last in-person board meeting? The last in-person board meeting was before the pandemic had hit the United States, which was the last board meeting was in February. We've been keeping the board regularly updated and, of course, up to speed on our COVID action plan. We've had six board calls since February, and it'll be our seventh board call since the February meeting will take place after this meeting, shareholder meeting today. Second question is, do you plan 2020 share buybacks, which I'll refer over to Phil Angelastro, our CFO?
We have no intentions to buy back shares as of now through the end of this year.
Next question, please name any directors who did not attend today's online meeting, and the answer is all of the director nominees who were just elected for another year. All of the directors are present on today's online meeting, so everyone has attended. The next question, what % of employees can do most of their work from home? The vast, vast majority of our employees are able to work from home, and it's been working very effectively, and a lot of effort, as you can imagine, going into IT to make sure people are set up to work from home, and we've continued, as John has said and Phil repeatedly on our earnings call and other statements, the health and well-being of our employees has been our first priority since the beginning of the pandemic all over the world and all parts of the world included.
How many shareholders logged into today's meeting? 15 shareholders have logged into today's meeting. Next question, how often does the board meet by telephone since the beginning of the pandemic? I think I answered that question earlier in that today will be the seventh time that we've conducted a board meeting, which, of course, by telephone and in the best interest of everyone's health. But today will be the seventh meeting since the beginning of the pandemic. Next question, have there been layoffs in 2020? Yes, unfortunately, in order to reduce costs and to handle the situation and to continue to best service clients and to reduce costs and do what's best for the company. Unfortunately, there have been layoffs in 2020. Can you announce a preliminary percentage of votes for each item? I believe we already did that. And I think, operator, we will.
I think we will. That's the end of the question, so I think we're all set.
Thank you. Thank you, everybody, for joining.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.