Hello, and welcome to the annual meeting of stockholders of Universal Health Services, Inc. Please note that today's meeting is being recorded. After the formal meeting has adjourned, we'll have a question and answer section. Any stockholder logged into the virtual meeting web portal using their 15-digit control number can submit questions or comments at any time by clicking on the Q&A tab. Out of consideration for other stockholders, please limit yourself to one question relevant to the annual stockholders meeting. The company will attempt to answer as many questions as time allows. However, if time does not permit all questions to be addressed, you are encouraged to submit your questions as instructed via the investor section of the company's website. It is now my pleasure to turn today's meeting over to Marc D.
Miller, Chief Executive Officer and Member of the Board of Directors of Universal Health Services, Inc. Mr. Miller, the floor is yours.
Thank you. Welcome to the annual meeting of stockholders of Universal Health Services, Inc. This year's annual meeting is being conducted completely virtually via a live audio webcast. I would like to introduce the other directors and officers of the company who are participating in today's meeting. Directors and officers. Members of the board of directors are Alan B. Miller, Executive Chairman of the Board, Lawrence S. Gibbs , Eileen McDonnell, Warren Nimetz, Maria Singer, and Dr. Elliot Sussman. Officers of the company are Steve Filton and Chick Boyle. In addition, Scott Hammond and Bill Leva of PricewaterhouseCoopers, our independent auditors, are participating today and are available to respond to any questions. Harold Murphy of Computershare, our transfer agent, is participating today and will act as Inspector of Elections as to the Class B and Class D votes.
In order to avoid any confusion, let me take a few moments to outline the format for today's meeting. First, each company proposal will be made and seconded. The board of directors' position on each proposal is set forth in the proxy statement, which is made available to all stockholders eligible to vote. Next, we will tally the preliminary votes with regard to each proposal. The polls on our virtual meeting website opened at approximately 9:50 A.M. Eastern Time this morning. Any stockholders who have logged into the virtual meeting web portal using their 15-digit control numbers will be able to make or change their votes electronically until we declare the polls have closed. For the record, as persons appointed in the official proxy, Mr. Filton and Alan B. Miller have voted in accordance with the proxies received from stockholders.
Once the votes on all the proposals have been tallied and the results announced, the meeting will be adjourned. After the meeting is adjourned, we will attempt to answer as many stockholder questions as time allows. This meeting will please come to order. I will act as chairman of the meeting, and Mr. Steve Filton will act as secretary of the meeting and Inspector of Elections as to the Class A and Class C votes.
Mr. Chairman, I present the affidavits of Computershare and this company with respect to the notification to the company's stockholders of the notice of the meeting, the annual report, the proxy statement, and the forms of proxy, which were mailed to Class A and C and to Class B and D stockholders who requested to receive printed proxy materials. I also present the affidavits of the Inspectors of Elections and the voting certification for the Class A and Class C stock, prepared and certified by me as Secretary of the Company.
The affidavits, forms of proxy materials, and voting certification are directed to be filed with the company's records.
Mr. Chairman, I present the certified list of holders of the company's Class B and D common stock as of the close of business on March 18, 2024, the record date for this meeting, as prepared and certified by Computershare, transfer agent and registrar for Class B and D common stock, and a certified list of holders of the company's Class A and C common stock as prepared and certified by me as Secretary of the Company, transfer agent and registrar for Class A and C common stock.
The lists of stockholders are directed to be filed with the company's records.
Mr. Chairman, the transfer agent has computed the number of shares of Class B and Class D Common Stock represented by the official forms of proxy provided to the Class B and Class D stockholders, and the number of shares of such classes present or represented here. I have computed the number of shares of Class A and Class C Common Stock represented by the forms of proxy provided to Class A and Class C stockholders, and the number of shares of such classes present or represented here. For purposes of voting for three directors by the holders of Class A and Class C Common Stock, the holders of a majority of the shares of Class A and C Common Stock are present or represented here.
For purposes of voting on each of the other proposals at the meeting, the holders of a majority of common stock votes are present or represented here.
... A quorum for all matters is present, and the meeting is properly constituted for the transaction of business. As set forth in the notice sent to each of the stockholders, the business of this meeting includes the election by Class A and Class C stockholders of three members of the board of directors. Next, to consider the approval of an amendment of the company's amended and restated 2020 Omnibus Stock and Incentive Plan. To consider the approval of an amendment of the company's Employee Stock Purchase Plan. The ratification of the selection of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year ending December 31st, 2024. And five, to act on a stockholder proposal to elect each director annually, if properly presented at the meeting.
The meeting will now proceed to the election of three directors of the company by holders of Class A and Class C common stock, voting together as a single class. We will now accept the nomination for three directors to be elected by the holders of Class A and Class C common stock, voting together as a single class.
I nominate Mr. Marc D. Miller, Ms. Eileen C. McDonnell, and Dr. Elliot J. Sussman for election by the holders of Class A and Class C common stock to serve as directors of the company for the three-year term and until their successors have been elected and qualified.
I second the motion.
Since there are no other nominations, the nominations are closed. The meeting will now proceed to the approval of an amendment of the company's Amended and Restated 2020 Omnibus Stock and Incentive Plan by the holders of Classes A, C, B, and D common stock. We will now entertain a motion to approve of an amendment of the company's Amended and Restated 2020 Omnibus Stock and Incentive Plan by the holders of Class A, C, B, and D common stock.
I move for the approval of the amendment of the company's Amended and Restated 2020 Omnibus Stock and Incentive Plan.
I second the motion.
The meeting will now proceed to the approval of an amendment of the company's Employee Stock Purchase Plan by the holders of Class A, C, B, and D Common Stock.
I move for the approval of the amendment of the company's Employee Stock Purchase Plan.
I second the motion.
The meeting will now proceed to the ratification of PricewaterhouseCoopers as the company's independent registered public accounting firm for the fiscal year ending December 31, 2024, by the holders of Class A, C, B, and D common stock. We will now entertain a motion for the ratification.
I move to ratify PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2024.
I second the motion.
The meeting will now proceed to the stockholder proposal to elect each director annually. I now invite John Chevedden to present this proposal. Mr. Chevedden will have three minutes to present this proposal.
Hello, this is John Chevedden. Proposal 5: Elect each director annually. Shareholders request that our company take the steps necessary to reorganize the board of directors in order that each director stands for election at each annual meeting. Classified boards, like the Universal Health Services board, have been found to be one of 6 entrenching mechanisms that are negatively related to company performance, according to What Matters in Corporate Governance by Lucian Bebchuk of the Harvard Law School. This proposal typically obtains overwhelming support from non-insider shareholders and is expected to do at least as well at Universal Health Services. The trouble with Universal Health Services is that insiders control the company and are opposed to this proposal. This proposal is at least a reminder that the price of UHS stock will always be sandbagged, because insiders control the company and are opposed to shareholder accountability.
Universal Health Services now scores a dismal 10 in shareholder rights, with 10 being the worst possible score. The price of UHS stock seems to be permanently sandbagged due to such poor shareholder rights. The sandbagging of UHS stock is illustrated by the price of UHS stock at $143 eight years ago and at $178 now. Long-term UHS shareholders may have forgotten that UHS is a controlled company, and UHS shareholder value is hampered by the lack of accountability to shareholders. Another sign of the lack of respect for UHS shareholders by the UHS board of directors is that the vast majority of UHS shareholders have to do a special registration in order to attend this online shareholder meeting, where shareholders cannot even speak.
A total of 79 S&P 500 and Fortune 500 companies, worth more than $1 trillion, have adopted this important proposal topic since 2012. Annual election of each director could make directors more accountable and thereby contribute to improved performance and increase company value at virtually no cost to shareholders.
... Thus, it was not a surprise that this proposal topic won more than 96% support at both Centene Corporation and Teleflex in 2021. Annual election of each director gives shareholders more leverage if the board of directors performs poorly. For instance, if the board of directors approves excessive pay, that is, shareholders can soon vote against the chair of the board's executive pay committee instead of waiting three years under the current rules. Please vote yes to elect each director annually, Proposal Five.
The board of directors has waived any requirement that the proposal be formally made and seconded, but that it is deemed made at this meeting. The board of directors has recommended a vote against the stockholder proposal to elect each director annually for reasons set forth in the proxy statement.
There are no other matters, Mr. Chairman. If any stockholder logged in via control number would like to ask a question about the proposals, please do so now via the web portal. We got another stockholder.
The polls are about to close. Any stockholder logged in via control number to our Virtual Meeting Web Portal who has not yet voted or would like to change his or her vote, should do so now by clicking on the voting button on the web portal and following the instructions there. Stockholders who have timely submitted proxies by mail, telephone, or internet, or given their brokers voting instructions and do not wish to change their votes, do not need to take any further action. Now that all eligible stockholders have had a final opportunity to vote, I declare that the polls for the 2024 annual meeting of stockholders are now closed. Mr. Filton, do we have preliminary voting results?
As a person appointed in the proxy, I have voted in accordance with the proxies received from all the Class A and Class C common stockholders who returned the official form of proxy with respect to Proposal One, the election of directors. 7,238,788 votes were cast in favor of the election of Marc D. Miller, and no votes were withheld. 7,238,788 votes were cast in favor of the election of Ms. Eileen C. McDonnell, and no votes were withheld. 7,238,788 votes were cast in favor of the election of Dr. Elliot J. Sussman, and no votes were withheld.
As a person appointed in the proxy, I have voted in accordance with the proxies received from all the Class B and D common stockholders who returned the official form of proxy. With respect to Proposal Two, the approval of an amendment of the company's amended and restated 2020 Omnibus Stock and Incentive Plan, 60,356,836 votes were cast in favor of the approval of the amendment of the company's amended and restated 2020 Omnibus Stock and Incentive Plan. 3,253,520 votes were cast against, and 3,640 votes abstained.
With respect to Proposal Three, the approval of an amendment of the company's employee stock purchase plan, 63,323,458 votes were cast in favor of the approval of an amendment of the company's employee stock purchase plan. 277,615 votes were cast against, and 2,923 votes abstained. With respect to Proposal Four, the ratification of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2024, 63,800,002 votes were cast in favor of ratification of PricewaterhouseCoopers LLP as the company's independent registered public accounting firm for the fiscal year ending December 31, 2024. 64,720 votes were cast against, and 1,957 votes abstained.
With respect to Proposal Five, a stockholder proposal to elect each director annually, 4,460,895 votes were cast in favor of the stockholder proposal to elect each director annually, 59,143,166 votes were cast against, and 4,171 votes abstained.
Based on that report, I declare the following: Mr. Marc D. Miller, Ms. Eileen C. McDonnell, and Dr. Elliot J. Sussman have been elected to serve as directors of the company for a three-year term. The amendment to the company's Amended and Restated 2020 Omnibus Stock and Incentive Plan has been approved. The amendment to the company's Employee Stock Purchase Plan has been approved. The ratification of PricewaterhouseCoopers as the company's independent registered public accounting firm for the fiscal year ending December 31, 2024, has been approved. The stockholder proposal to elect each director annually has not been approved. This completes our agenda. Thank you for listening through the legal formalities of the meeting. The chair entertains a motion for adjournment of the meeting.
I move that the meeting be adjourned.
I second that motion.
All those in favor of the motion, please say aye.
Aye.
Aye.
All opposed? The motion is carried, and the meeting is adjourned. The business affairs of the company will be fully discussed in our shareholders' letter and the balance of the annual report. I will be glad to answer any questions which the stockholders may have concerning the business and affairs of the company. Thank you for your attention and attendance.
This concludes the meeting. You may now disconnect.