HP’s 2020 virtual AGM was not its first rodeo – the company has been holding its annual shareholder meetings online since 2015. But there was a wrinkle: HP was the subject of a proxy contest and hostile tender offer brought by Xerox Corporation.
HP was planning to hold an in-person AGM in late spring because of the technical and procedural limitations associated with a proxy contest, which typically do not allow the issue to be resolved via a virtual meeting. HP had already gone far down the road to being ready for an in-person meeting while the Covid-19 pandemic loomed ever-larger but lockdowns were not yet in place.
Patrick Scott, HP's deputy general counsel for corporate securities and M&A, explains that the aim was to balance complying with lockdown rules while not knowing what they would be with responding to the proxy contest and ensuring the best outcomes and governance for HP and its investors.
Scott expresses gratitude to HP’s vendors and outside advisers for their patience while the company brainstormed a number of ways to conduct the meeting. For example, it looked into plans such as putting up tents in parking lots with separate sections within the tents and their own TVs so that fewer than 10 people would be gathered in any one space. It then became apparent that this was not possible as the company was required to have a single line of communication.
Just as plans were coming together, Xerox withdrew its slate of directors and stockholder proposal and terminated its tender offer. That required HP to refile in a short period of time a definitive proxy statement that would now more closely resemble the usual document rather than including detailed discussion of the proxy contest.
Without a contest, there was no more need for an in-person AGM. The worsening pandemic made holding a virtual meeting the sensible option for health and safety reasons. But HP now had to drop all its planning and put together a new AGM in very short order.
In less than two weeks the company launched a new AGM website that featured the revised proxy content, moved to a virtual meeting platform, redistributed hard copies of the proxy statement to roughly 200,000 households globally and responded to shareholder questions about the meeting. ‘It was all about getting organized,’ Scott says. The challenges of preparing included conducting remote training sessions and getting people the right updated technology.
The key to a successful virtual AGM from a governance perspective is ensuring investors have the same access and engagement as they would at an in-person event. HP’s shareholders filed a record number of questions before and after the 2020 annual meeting and tuned in in greater numbers than ever before. The company commits to answering every question received, and the legal and investor relations teams joined forces to craft responses to shareholders' questions, in addition to working with finance and communications.
Despite not being able to have them all in one physical space, HP’s CEO, chief legal officer, inspector of elections, representatives of EY and board chair, as well as all other members of the board, took part from separate locations via telephone. The company was able to provide shareholders with slides, allow for Q&A during the meeting and present business highlights. It also defeated a shareholder proposal that had previously been approved by a small margin.
‘We believe HP’s 2020 annual meeting shows that this team is consistently able to create the best possible stockholder experience, even when presented with a series of uniquely challenging scenarios,’ the company says.
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Ben Maiden
Ben Maiden is the editor-at-large of Governance Intelligence, an IR Media publication, having joined the company in December 2016. He is based in New York. Ben was previously managing editor of Compliance Reporter, covering regulatory and compliance...
