Walgreen Co. (WAG)
January 11, 2012 3:00 pm ET
Alan G. McNally - Chairman
Gregory D. Wasson - Chief Executive Officer, President and Director
Joseph Greenberg -
Thomas J. Sabatino - Executive Vice President, General Counsel and Corporate Secretary
Mark A. Wagner - President of Community Management
Kermit R. Crawford - President of Pharmacy, Health, Wellness Services & Solutions
Wade D. Miquelon - Chief Financial Officer and Executive Vice President
Previous Statements by WAG
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Alan G. McNally
Good afternoon, ladies and gentlemen, and I hope everyone will experience well at Walgreens this afternoon. On behalf of your Board of Directors, a warm welcome in balmy Chicago to each of you to Walgreens Annual Meeting of Shareholders, as we celebrate the new year and your company's 111th year of operation. Thank you, thank you.
I'm Al McNally, Chairman of the Board, and it's a pleasure and a privilege for me to serve as chair of this meeting. Thank you for spending your afternoon with us, and we'll work very hard to make it informative and productive for you.
Three years ago, we introduced our "plan to win" to get more from the core for you, our shareholders, to be America's most trusted and convenient provider of consumer goods and services and Pharmacy, Health and Wellness Services, and to return Walgreens to strong double-digit growth in earnings per share and top-tier shareholder return just as early as we possibly could.
In the past 3 years, your company has made enormous progress on a broad-based agenda of innovation, disciplined execution and profitable growth. Thanks to the outstanding leadership of our President and Chief Executive Officer, Greg Wasson, and the world-class leadership team he's assembled, and the dedication, the talent and the hard work of 247,000 members of the Walgreens team.
Today, we'll provide you with an update on the company's performance and progress in 2011, and look ahead to becoming My Walgreens, the first choice for health and daily living across America, a central part of people's lives and the communities where they live and work.
After we conclude the specific matters of business presented in your proxy statement, Greg will review the highlights of the past year and our strategies for growth and value creation going forward. Strategies that position Walgreens well for the opportunities and the challenges that lie ahead, challenges including the Express Scripts situation and substantial reduction in our share price these past 6 months, and turning challenges into opportunities as we advance the role of community pharmacy across America,
Our Chief Financial Officer, Wade Miquelon, will then review Walgreens' financial performance and condition, including a record-setting year in fiscal 2011, our largest increase in net income in a decade and our largest growth in earnings per share in more than 15 years. Following which we look forward to your questions and your comments.
Let me now open the business meeting by recognizing and introducing our new Corporate Secretary, Tom Sabatino. Tom joined Walgreens in September as Executive Vice President, General Counsel and Corporate Secretary having previously served in this capacity with several major U.S. corporations. Tom succeeds Dana Green, who retired from Walgreens after 37 years of incredible service and commitment to our company, the Board of Directors and our shareholders. So welcome, Tom, and your comments?
Thomas J. Sabatino
Thank you, Mr. Chairman. The Board of Directors set the close of business on November 14, 2011, as the record date of shareholders entitled to receive notice of and vote at this meeting. The company's 2011 annual report, notice of this meeting, proxy statement and proxy form were provided beginning on November 18 to all those shareholders of record as of November 14. We have copies of these documents available for inspection today along with affidavits as to their distribution and a list of Walgreen shareholders on the record date. This list has also been available for inspection at our corporate office for at least the 10 days preceding the meeting. Hedburg and Associates have been appointed as inspectors of election. They've examined the proxies received up to the time of the meeting and determine the number of shares represented by proxy and their vote on the proxy matters. Proxies must be delivered to the inspectors of election before they may be voted. If you have not turned in your proxy, please raise your hand so that it may be picked up now. Thank you.
There were 877,861,721 common shares outstanding and entitled to vote on the record date. The company's bylaws state that a quorum consist of a majority of the common shares outstanding, which are at least 438,930,861 shares. The inspectors of election have informed me that they have received proxies representing shares in excess of the majority.
Alan G. McNally
Thank you, Tom, and since our quorum is present, I declare the meeting open for business. The first matter before us is the election of Directors, for which there are 11 nominees. Dr. David J. Brailer, Chairman of Health Evolution Partners; Steven A. Davis, Chairman and CEO of Bob Evans Farms; William C. Foote, retired Chairman and CEO of USG Corporation; Mark P. Frissora, Chairman and CEO of the Hertz Corporation; Ginger L. Graham, President and CEO of Two Trees Consulting; Nancy M. Schlichting, CEO of Henry Ford Health System; David Y. Schwartz, Independent Business Advisor and Consultant and a former partner at Arthur Andersen; Alejandro Silva, Chairman and CEO of Evans Food Group; James A. Skinner, Vice Chairman and CEO of McDonald's Corporation; Gregory D. Wasson, President and CEO of Walgreen Co.; and me. Nominations are now closed.
Our second matter of business is to ratify the Audit Committee's appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm for fiscal 2012. The Board of Directors unanimously recommends this appointment.
The third matter of business is to approve the Walgreen Co. 2011 cash-based incentive plan. The Board of Directors unanimously recommends a vote for this proposal for the reasons explained in the proxy statement.
The fourth matter of business is to approve on an advisory basis the compensation of our named executive officers, otherwise known as a say on pay vote. The Board of Directors unanimously recommends a vote for this proposal for the reasons explained in the proxy statement.
The fifth matter of business is to conduct an advisory vote on the frequency of future say on pay votes. The Board of Directors unanimously recommends a vote every year as explained in the proxy statement.
The sixth and final matter is a proposal by shareholder Mr. John Chevedden regarding an executive equity retention policy. Mr. Martin Glotzer will speak regarding this proposal on behalf of Mr. Chevedden, and we've asked Mr. Glotzer to kindly limit his comments to 2 minutes, please, Mr. Glotzer.
Thank you,, Mr. Chairman. Martin Glotzer, Chicago. Once again, I am well pleased to be at an annual meeting of Walgreens. And like I've said, look out the window, it doesn't look like a Walgreens meeting because there's no snow on the ground, thankfully.
As to Mr. Chevedden's proposal, it's found on Page 65 of the proxy statement. And let the record indicate that I've read the proposal as printed in the proxy statement and the reasons. And in addition, during the course of attending so many annual shareholder meetings from time to time, a shareholder sends me a letter criticizing company policies unsigned. And all I request that a copy of this letter be put in the records of the meeting. And if any shareholder into the future we have provision in the proxy statement if any shareholder would like to communicate with the Board of Directors, there's a program on how to do it. And I'll leave it up to the management's rebuttals.
Alan G. McNally
Thank you very much, Mr. Glotzer for bringing that letter to our attention. Appreciate it. The Board of Directors unanimously recommends a vote against this proposal, again, as explained in the proxy statement. We'll now conclude the voting. If you've already voted by phone, Internet or mail, you need not vote on any of these matters by ballot. Your votes will be cast in accordance with your proxy. If anyone wishes to vote in person by ballot, please raise your hand and a ballot will be distributed to you and collected momentarily. So let me pause for a moment so that ballots can be distributed.