Good morning, and welcome to the Square 2016 Annual Meeting of Stockholders. Please note that this event is being webcast. I'd like to turn the conference over to Jack Dorsey, CEO, President and Chairman of the Board. Mr. Dorsey, please go ahead.
Thank you, operator. I want to welcome you to the Square 2016 and our first Annual Meeting of Shareholders and a special thank you to our seller shareholders who have joined the meeting as well. We're always looking for accessible ways to use technology to bring people together and we're happy to be able to conduct this meeting online. After the formal business of the meeting has adjourned, we will provide time for your questions. I would now like to turn the call over to Dana Wagner, our General Counsel, who will lead the meeting and also act as Secretary of the meeting.
Thank you, Jack. Chris Vico has been appointed to act as the Inspector of Election and she will examine and tabulate proxies and ballots at this meeting. I would now like to introduce the other members of Board of Directors who are present or otherwise participating on our call today. They are David Venier, Jim McKelvey, Roelof Botha, Ruth Simmons and Paul Dighton. We're also joined here today by our Chief Financial Officer, Sarah Friar and Connor Moore of KPMG, our independent registered public accounting firm.
Mr. Moore will be available to respond to appropriate questions. And with introductions concluded, we'll move on to our other procedural matters. First of all, the voting is currently open. Any stockholder who hasn't yet voted or who wishes to change his or her vote may do so by clicking on the voting button on our web portal and following the instructions.
Any stockholder who has already sent in a proxy or voted via telephone or Internet and does not want to change his or her vote need not take any further action. I have 2 affidavits of distribution from Broadridge Financial Solutions. The first indicates that commencing on April 29, 2016, the proxy statement and related proxy materials were mailed to stockholders of record determined as of the close of business on the record date. The second indicates that commencing on May 25, 2016, the amendment to our proxy statement was mailed to stockholders of record determined as of the close of business on the record date. Ms.
Vico reports that the holders of a majority of the voting power of shares of our common stock as of the record date are present at the meeting in person or by proxy, constituting a quorum. Therefore, today's meeting is duly convened and open for business. So I will now proceed with the formal business of this meeting. There are 4 items of business to be considered and voted on by stockholders. I'll summarize them and each proposal is more fully described in our proxy statement.
The first item of business is the election of 3 Class 1 Directors, Jack Dorsey, David Veneer and Paul Dighton to serve until the 2019 Annual Meeting of Stockholders and until their successes are duly elected and qualified. The Board of Directors has recommended to vote for all of the director nominees. Previously, Irvin Magic Johnson, Jr. Was up for election. However, Mr.
Johnson resigned from his position on May 9 and was replaced by Mr. Dighton on May 12. Again, if you've already voted, no action is required from you unless you wish to change your vote or provide a vote on Mr. Dighton's election. Votes received prior to May 20 will not be counted for or against the election of Mr.
Dighton to the Board. Any shares voted for Mr. Johnson will not be counted for or against the election of Mr. Johnson or Mr. Guyton to the Board.
The second item of business is to approve on an advisory basis and compensation of our named executive officers. The Board of Directors has recommended a vote for the following advisory resolution. It reads, resolved that the stockholders approved on an advisory basis the compensation paid to our named executive officers as disclosed in the proxy statement for the annual meeting pursuant to the compensation to close disclosure rules of the SEC, including the compensation discussion and analysis, compensation tables and narrative discussions and other related disclosure. The third of the 4 items of business is to approve also on an advisory basis, the frequency of future stockholder advisory votes on the compensation of our named executive officers. The Board of Directors recommends the vote to hold future stockholder advisory votes, the compensation of our named executive officers every 1 year.
And the 4th and final item of business is the proposal to ratify the appointment of KPMG to serve Square's independent registered public accounting firm for the year ending December 31, 2016. The Board of Directors recommends a vote for the ratification of the appointment of KCMG. It is now 11:0:4 am and the polls are still open and we will vote on the proposals. Voting today is by proxy and electronic ballot. As previously noted, if you've already submitted a proxy or voted via Internet and do not wish to change your vote, you need not do anything else on the time line.
Any stockholder who wishes to get voted or wishes to change his or her vote may do so now by clicking on the Vote Here button on the webcast portal and following the instructions. If you have not yet submitted a proxy or electronic ballot, you must submit your electronic ballot now for your vote to be counted by the Inspector Collection. We will now leave the calls open for a few moments to allow anyone who chooses to vote electronically to cast their ballot. And if there are any questions on any of the proposals, please submit those now. Now that everyone has had the opportunity to vote, it is 11:0:6 a.
M. And I now declare the polls to be closed. Ms. Zico, the Inspector of Elections will now report on the preliminary voting results. Ms.
Zico, please?
Thank you. The preliminary report of the Inspector of Elections shows that regarding proposal number 1, election of directors Jack Dorsey, David Vigner and Paul Dighton each received more than 99% of the votes in favor of his election. Regarding proposal number 2, the advisory resolution on the compensation of the company's named executive officers received more than 99% of the votes in favor of its approval. Regarding proposal number 3, the frequency of the vote on executive compensation every year received more than 99% in favor. Regarding proposal number 4, the ratification of the appointment of KPMG received more than 99% in favor.
Thank you, Ms. Vico. Based on the results, Evoque shows that the stockholders have selected the 3 Class 1 directors to serve until the 2019 Annual Meeting of Stockholders, approved on an advisory basis the compensation of our named executive officers, approved also on an advisory basis the 1 year frequency of future stockholder advisory votes on named executive officers and ratified the appointment of KPMG as Square's independent registered public accounting firm for fiscal 2016. Ladies and gentlemen, that concludes our planned agenda. There is no other formal business before us today, and I therefore now declare the meeting to be adjourned.
We will now take the opportunity to answer stockholder questions entered today on the web portal. Please note that we will attempt to answer as many questions as time allows. I will turn the call over to Stacy Finerman from our Investor Relations team to handle this Q and A session.
Thank you, Dana. Before we begin, I would like to note that our responses to your questions today may include forward looking statements. Our actual results may differ materially from those projected in these statements. Please take a look at our filings with the Securities Exchange and Exchange Commission for a discussion of the factors that could cause our results to differ. Also note that any forward looking statements are based on information available to us as of today's date, and we disclaim any obligation to update any forward looking statements except as required by law.
I will now read the first question. Can you please explain why the market sees customer lending as a negative activity? EasyPay seems to be using similar technology. Is there an agreement with them?
Sarah? Great. Thank you so much, Stacy, and thank you very much for the question. I think I will take it from the positive of why we see Square Capital, which is lending to small businesses as a very positive thing to do. First and foremost, we believe it speaks to our core competencies as a company.
So we have in fact aggregated a large number in the millions of small businesses who actively run their business on Square. They trust our brand with a Net Promoter Score of over 70 and they know that they can come to us as they see issues arise in their business. One of those is lack of access to capital. So a second competitive advantage we felt we had was an ability to underwrite them in a good way and in a way that would minimize losses, but get that capital to the place that's needed most, which is small businesses. So utilizing the data that Square has with our payments, we're able to show that we can land 2 small businesses in sizes that are in the $6,000 to $7,000 and fee default rates that are in the 4% type range.
So we think it's an excellent outcome of getting capital to where it's most needed to help those businesses start, run and negative reaction to what has been called the alternative lending space. And I believe Square has gotten rolled into that to some degree. However, what I think we've been able to show as investors come and dug deeper is just the points of differentiated differentiation that I just elaborated on and why in effect we believe we have a product that has core competitive advantages, it's not a marketplace and why we continue to see what we view as almost a flight to quality as investors come to Square to be able to put their dollars to work behind Square Capital.
Thank you. The next question, Why did our stock ticker SQ go up and down so much?
Thank you,
sorry, go ahead, Jack.
Go ahead, Sarah.
So, thank you for the question. I think I will comment on what I talked to Square's about, which is ultimately, we cannot help move our stock one way or the other. What our stock does is not in our hands that it belongs with the market. However, stocks will trade to fundamentals. And so we will control what we can control, which is our business.
And so we will continue to put up strong quarters as we did in Q4 and we did in Q1. We'll continue to focus on how we build our base of small businesses and continue to grow that technology platform that's paid for via our payments business model and then continue to add new products into our ecosystem like Square Capital or like our CRM products. And so as long as we continue to execute and show the high growth that we're showing today, we believe our stock will ultimately show the strength of our business. The volatility in it, we're a very young company. We're new to the public markets.
We've just gone through a lockup, right as we came out of our Q1 earnings release. I think all of that has certainly added to volatility. But over time, our expectation is it will trade back to the fundamentals of the business, which are strong.
Thank you. That was our last question. The question and answer period is concluded. Thank you for joining us today. I will now turn it back over to the operator.