Comptroller Stringer: Virtual Only Meetings Deprive Shareowners of Important Rights, Stifle Criticism

(New York, NY) — Today, New York City Comptroller Scott M. Stringer announced he was calling on more than a dozen major corporations to host in-person annual general meetings, rather than continuing to use “virtual-only” meetings. Alarmed by the rapid increase in such meetings, Comptroller Stringer said he will recommend that the New York City Pension Funds adopt a policy to vote against directors at companies that continue to hold “virtual-only” meetings.

Over the past six years, the number of corporations hosting virtual-only meetings — either online or over the phone — has grown more than 700%, rising from just 19 in 2010 to 155 last year. Virtual-only meetings deprive shareowners the fundamental right that, regardless of the number of shares they own, they can engage directly with management and directors — face-to-face — at least one-time per year.

Some companies — like Duke Energy and ConocoPhillips — are likely using online-only meetings to insulate themselves from uncomfortable interactions with concerned shareowners, while others may have moved to virtual-only meetings without realizing they are violating an important investor right.

“It’s one of the great markers of American enterprise — whether you own one share or a one million, you can speak at a company’s annual meeting. Except now, in this interconnected world, companies are using technological tools to whittle away at investors’ rights and hide from accountability. Often, they want to avoid looking shareowners in the eye — they’re treating face-to-face interaction as a nuisance instead of a duty. If boards shirk this responsibility, shareowners should join us in holding them accountable,” Comptroller Stringer said.

“Some companies are indeed using technology to boost shareowner participation, which we support. But it’s disingenuous to say virtual-only meetings broaden access — they often create barriers, rather than tear them down. It’s a sleight-of-hand – and it’s wrong, because in some cases, companies are clearly using virtual-only meetings to avoid criticism,” Comptroller Scott M. Stringer said.

The Comptroller’s Office has begun sending letters to the S&P 500 companies that hosted virtual-only meetings last year, along with companies that have announced they will host virtual-only meetings this year. The letters outline concerns with the practice, including the ability to silence investors, cherry-pick questions, and avoid protestors. The letters urged the directors to abandon the practice and embrace either traditional in-person meetings or hybrid ones, which expand access by combining in-person meetings with aspects of virtual meetings.

Companies that will receive letters from the Comptroller’s Office include:

• Alaska Air Group
• Biogen Inc.
• CA, Inc.
• Comcast Corporation
• ConocoPhillips
• Coty, Inc.
• CSRA
• Duke Energy
• Ford Motor Company
• HP, Inc.
• Illumina
• Indexx Labs
• Intel Corp.
• Intercontinental Exchange
• Newfield Exploration Company
• PayPal Holdings
• Synchrony Financial

The Comptroller also highlighted changes he has proposed to the New York City Pension Funds’ proxy voting guidelines to encourage in-person or hybrid meetings. Under the proposed guidelines, the $170 billion New York City Pension Funds would vote against directors on companies’ governance committees if they host virtual-only meetings. The pension funds’ trustees will vote on these changes in April.

To view an example of the letters sent by the Comptroller’s Office, click here.

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