The ritual of public companies hosting their annual shareholders meeting will start again in the coming weeks.
Given the COVID-19 pandemic and stay-at-home orders in many states, the meetings will be decidedly different this year. The pandemic has led many companies to either postpone their annual shareholder meetings or to proceed with plans to hold them virtually.
“Overwhelmingly, public companies are going virtual,” said Emily Cantor, a partner in the corporate practice group at Warner Norcross + Judd LLP in Grand Rapids.
For example, Benton Harbor-based Whirlpool Corp. switched to a virtual annual meeting “in response to continued public health concerns about in-person gatherings given the COVID-19 outbreak,” according to a federal regulatory filing. The corporation had been planning to hold the annual shareholder meeting in Chicago.
State laws govern annual shareholders meetings and in Michigan, the law has long allowed both private and publicly traded companies to hold them virtually, as long as shareholders still have a way to participate and vote, Cantor said.
Federal regulators require certain disclosures to shareholders prior to a company’s annual meeting.
The U.S. Securities and Exchange Commission issued guidance April 7 that it expects “all market participants to cooperate with one another to facilitate issuers’ obligations to hold annual meetings and disseminate timely, accurate, and clear proxy disclosures under the federal securities laws as well as to allow shareholders to exercise their voting rights under state law.”
The SEC guidance said corporations that already mailed materials to shareholders and filed their annual proxy statement could transition to a virtual annual shareholder meeting without sending additional materials or amending their filing if they:
- Issue a press release announcing the change;
- File the announcement as definitive additional soliciting material on EDGAR; and
- Take “all reasonable steps necessary to inform other intermediaries in the proxy process (such as any proxy service provider) and other relevant market participants (such as the appropriate national securities exchanges) of such change.”
Some companies have held virtual annual meetings for years, or did both in-person meetings and offered a virtual option through a webcast of the event. For others, it’s an entirely new format.
A virtual annual meeting does require hiring a third-party provider that can do the webcast or teleconference and provide a platform for shareholder votes and participation. That’s not an inexpensive proposition, Cantor said, although doing a shareholder meeting virtually does for some companies negate the cost of travel and renting a venue to host the event.
Whether more companies transition to virtual annual meetings permanently hinges on how well it works for shareholders, and the end cost versus hosting an in-person event, Cantor said.
“It’ll be interesting to see the cost-benefit analyses that happen, and which decisions are made on that,” she said.
Here are the dates and times of West Michigan-based corporations that are planning to webcast their annual shareholder meetings through links on the investor relations sections of the websites. Some companies also are planning to offer teleconferencing for shareholders.
- ChoiceOne Financial Services Inc. (NasdaqCM: COFS): 11 a.m., Friday, May 29
- Independent Bank Corp. (Nasdaq: IBCP): 3 p.m., Tuesday, April 21
- Kellogg Co. (NYSE: K): 1 p.m., Friday, April 24
- Macatawa Bank Corp. (Nasdaq: MCBC): 9 a.m., Tuesday, May 5
- Mercantile Bank Corp. (Nasdaq: MBWM): 9 a.m., Thursday, May 28
- Meritage Hospitality Group Inc. (OTCQX: MHGU): 8:30 a.m., Friday, June 5
- Stryker Corp. (NYSE: SYK): 2 p.m., Tuesday, May 5
- Wolverine World Wide Inc. (NYSE: WWW): 10 a.m., Thursday, April 30
- Whirlpool Corp. (NYSE: WHR): 8 a.m. (Central time), Tuesday, April 21
Zeeland-based Gentex Corp. (Nasdaq: GNTX) as of Friday afternoon had not yet indicated a move to a virtual annual meeting, which was scheduled for May 21 at the Pinnacle Center in Hudsonville.
In an April 7 proxy filing to the SEC, Gentex said it was “actively monitoring the coronavirus (COVID-19) outbreak, and we are sensitive to the public health and travel concerns our shareholders may have and the protocols that federal, state, and local governments may impose.
“In the event it is not possible or advisable to hold our Annual Meeting in person, we will announce alternative arrangements for the meeting as promptly as practicable, which may include holding the meeting solely by means of remote communication,” according to the filing.
Grand Rapids-based Universal Forest Products Inc. (Nasdaq: UFPI) is moving ahead with plans to hold an in-person shareholder meeting at 8:30 a.m., Wednesday, April 22, although “properly socially distanced,” Dick Gauthier, vice president of business outreach, said in an email to MiBiz.
The company did plan a teleconference call of the meeting, according to its website.