Omicron Pushes Some Companies Back to Virtual Shareholder Meetings
Hormel, Tyson and Becton Dickinson are among the companies opting
for a remote events
New Jersey-based Becton Dickinson held its annual shareholders
meeting virtually on Tuesday.
PHOTO: SMITH COLLECTION/GADO/GETTY IMAGES
Jan. 27, 2022 5:30 am ET
Some companies are
switching to virtual shareholder meetings again as the Omicron variant
continues to spread through the U.S. and businesses take precautions
to limit infections.
Many companies shifted to meeting
with their investors remotely as Covid-19 cases first surged in the U.S. in the
spring of 2020—a trend that continued in 2021, when 65%, or 3,316, of
shareholder meetings by publicly traded U.S. businesses were conducted remotely,
according to Wall Street Horizon, a data provider.
So far, about 400 listed U.S.
companies have announced a date for their 2022 shareholder meeting, and of
those, 68% are planning to host an in-person event, Wall Street Horizon said.
But, in recent weeks, large corporations including meat producer Tyson Foods
Inc. and medical technology company Becton
Dickinson & Co. have altered their plans and moved to an online-only event,
which some corporate advisers say is the prudent thing to do.
“If your meeting is in April, you
are actively planning it now,” said Sherry Moreland, president and chief
operating officer of Mediant, a company that provides proxy and other
shareholder services. “People are choosing the safe option,” Ms. Moreland said,
referring to companies that are preparing to host a virtual meeting instead of
an in-person one. The bulk of annual investor meetings are usually held between
mid-April and June.
meetings have proven helpful during the pandemic, as they allow executives and
investors to dial in from their home offices and in many cases are cheaper to
conduct than in-person meetings, which require spending on travel and
Becton Dickinson, based in Franklin
Lakes, N.J., decided to stick to the original date for its meeting—Jan. 25—but
changed the format to virtual. “We felt it was important to keep the original
date of the meeting to allow shareholders to vote as originally planned,” a
spokesman said, adding that virtual events have become widely accepted during
Hormel Foods Corp. ,
the owner of brands including Spam canned meat and Skippy peanut butter, in
December also announced a remote-only meeting for this week. “Hormel Foods’
annual meeting of stockholders is very unique,” said Brian Johnson, the
company’s vice president and corporate secretary. The meeting is usually held in
a high school auditorium in Austin, Minn., and attended by about 2,000 people,
he said. The company plans to return to an in-person meeting once it is safe to
do so, Mr. Johnson said.
Avita Medical Inc., a
Valencia, Calif.-based regenerative medical company, in December held a remote
event for its shareholders. “If the Omicron variant had not become pervasive, we
might have had an in-person meeting,” Chief Financial Officer Michael Holder
said. Going forward, Avita Medical will likely opt for a hybrid model, Mr.
Holder said. “Some shareholders still want to be in person. For others, remote
is more feasible,” he said.
Among the companies planning to host
an in-person meeting this year is Warren
Buffett’s Berkshire Hathaway Inc. The
conglomerate said Tuesday that its annual shareholder meeting, which before the
pandemic would regularly bring tens of thousands of people together in Omaha,
be held in person for the first time since 2019. The event, scheduled for
April 30, will also be webcast, the company said.
A recent study by the Hebrew
University in Jerusalem found that remote shareholder meetings held by U.S.
companies are usually shorter than their in-person counterparts. For 125
companies in the S&P 500 evaluated by the Hebrew University in Jerusalem, 32.7
minutes was the average in 2020, when many had gone remote, down 17% from 2019.
The study found that companies allocated less time for questions and answers.
“Most of the meetings are audio-only
and shareholders are not heard,” said Miriam Schwartz-Ziv, a senior lecturer at
the Hebrew University and author of several studies about virtual shareholder
meetings. Prerecording parts of the meeting further shifts the focus and turns
the event into an occasion where shareholders passively listen to an audio
recording, Ms. Schwartz-Ziv said.
Companies that provide technology
for these remote meetings point to recent
improvements—for example, by including live video recordings or live Q&A
sessions with shareholders asking questions via phone. “In 2020, over 90% of
meetings were audio only,” said Mediant’s Ms. Moreland. “Last year, we saw more
companies get a little more sophisticated and show a video or presentation.”
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