Sunrun Inc. (RUN) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. I am Jeanna Steele, General Counsel and Corporate Secretary of Sunrun. And it is a pleasure to welcome you to Sunrun's Annual Meeting of Stockholders. I will act as chairperson of this meeting. I have asked Sundance Banks, our Deputy General Counsel, to record the minutes of this meeting. As you know, we are hosting today's meeting through our virtual online platform, hosted by Broadridge. We have designed this meeting to provide stockholders the same rights and opportunities to participate as they would at an in-person meeting. This meeting is being recorded and the recording will be available via webcast on our website for the next 30 days. Before proceeding further, let me introduce Lynn Jurich, our Chief Executive Officer; Ed Fenster, our Chairman; and Tom VonReichbauer, our Chief Financial Officer, who are all with us virtually today. We also have our directors: Alan Ferber, Mary Powell, Gerald Risk, Leslie Dach, Katherine August-deWilde, David Bywater, Ellen Smith; and our Director Nominee, Sunita Lontoh as well as representatives from Ernst & Young, Heather Wisniewski. In order to ensure that the business of the meeting proceeds in an orderly fashion, we ask that you please observe the rules of the meeting, which are posted below the agenda. The annual meeting is being held in accordance with the company's bylaws and Delaware law. During the meeting, we will address the matters described in the company's proxy statement dated April '21, 2021. Balloting will be completed, and announcement will be made regarding the results and then the meeting will be adjourned. [Operator Instructions]. During the meeting, questions should be restricted to the procedures for the meeting and the proposals under consideration. Thank you for your understanding. I have proof by affidavit that notice of this meeting has been duly given and that the notice of Annual Meeting of Stockholders, proxy statement and proxy were mailed on or about April 21, 2021, to all stockholders of record at the close of business on April 8, 2021, the record date for the meeting. The affidavit, together with copies of the notice, proxy statement and proxy will be filed with the minutes of the meeting. We have appointed Michael Barbera, a representative of Broadridge, as Inspector of election for this Annual Meeting. The inspector of election has signed an oath of office, which will be filed on this meeting. We have present virtually or by proxy a sufficient number of shares to constitute a quorum, and the meeting is duly constituted and we may proceed with business. Let me briefly describe the voting procedures. We will vote by proxy and by ballot. Each holder of common stock is entitled to 1 vote for each share of common stock held of record at the close of business on the record date. If you have previously turning your proxy or if you're attending this meeting and you do not intend to change your vote, it is not necessary that you complete another proxy or ballot. Your vote will be counted. If you would like to vote now or change your vote, please click on the proxy voting link located on the left-hand side of your screen and then enter your 16-digit voter control number located on your notice or proxy card. It is now 08:34 a.m. on June 3, 2021, and the polls for each matter to be voted on at this meeting are now open. Turning now to the items to be voted on at this meeting, as indicated in the notice of meeting and accompanying documents that were made available to stockholders. The first item of business is the election of Class III directors. The company's Board of Directors presently has 9 members and is divided into 3 classes, each with a 3-year term. There are currently 3 Class I directors, 3 Class II directors and 3 Class III directors. 3 Class II directors will be elected at today's meeting. And the 3 nominees receiving the highest number of votes of the shares present virtually or represented by proxy at this meeting and entitled to vote will be elected as directors. Directors elected at today's meeting will hold office until the 2024 annual meeting of stockholders or until their successors are duly elected and qualified. Stockholders do not have the right to accumulate their votes in the election of directors. As indicated in the company's proxy statement, the following individuals are nominated by the Board of Directors for election as Class III Directors. Katherine August-deWilde, Sunita Lontoh and Gerald Risk. Ms. deWilde and Mr. Risk are currently serving as directors of the company. Pursuant to the notice of this annual meeting and the proxy statement dated April 21, 2021, the proxies solicited by the Board of Directors will be voted in favor of these 3 nominees. The next item of business is to ratify the appointment of Ernst & Young as independent registered public accounting firm for the company for the year ending December 31, 2021. the proxy statement for this meeting contains the text of the resolution that stockholders are asked to approve. The Board of Directors recommends that stockholders vote in favor of this proposal and the proxy solicited by the Board will be voted in favor of this proposal. The next item of business is to vote on an advisory basis to approve the compensation of our named Executive Officers. The proxy statement for this meeting contain the text of the resolution that stockholders are asked to approve. The Board of Directors recommends that stockholders vote to approve our named Executive Officer compensation. The next item of business is the shareholder proposal related to the preparation of a public report on the impact of the use of mandatory arbitration. The proposal was made by MEA impact capital, a shareholder of the company's stock. MEA impact capital's arguments in favor of the proposal and the Board's statement against the proposal are set forth in the proxy statement. MEA Capital has designated Dr. Kristen Hull to present their proposal, which will now be played via audio recording.

Hello. My name is Dr. Kristen Hull, and I am the founder and CEO at MEA Impact Capital. I formally move agenda item 4. This resolution requests that Sunrun's Board of Directors oversee the preparation of a report on the impact of the use of mandatory arbitration on Sunrun's employees and on its workplace culture. The report shall evaluate the association of Sunrun's current use of arbitration with the prevalence of both harassment and discrimination in its workplace and on its employees' ability to seek redress should harassment or discrimination occur. We raise this issue because investors want to see Sunrun benefit from the building of a positive and inclusive workplace culture. When it comes to building strong diversity, equity and inclusion programs, arbitration can underline those efforts. Provisions requiring arbitration and employment agreements limit employees' remedies when wrongdoing occurs, often keeping underlying facts, misconduct or case outcome secret and prevents employees from learning about shared concerns. Stated simply, arbitration allows bad corporate behavior like bias, harassment and discrimination to continue hidden from other employees and from investors. Because Sunrun forces employees to sign arbitration clauses, investors are not able to know whether a problem exists. Arbitration clauses may mask even from Sunrun problems within a workplace culture. Employees distrusting arbitration to be fair and equitable creates a risk of a sudden surge of claims should the law change or a work around be found. When hidden discrimination or harassment problems surface, multiple employees may step forward at once, creating a sudden and significant brand liability. Allegations of harassment or discrimination once released, may significantly disrupt business operations, introduce overwhelming expense and undermine long-term business strategies. Even if arbitration remains an effective [ way ] for employee complaints, poor diversity and inclusion practices undermine long-term business success. Sunrun has limited public reporting on the effectiveness of its workplace equity programs. Companies with effective human capital management program should not need arbitration as protection from employee lawsuits or class actions. It is essential that the Board assess the implications of its use of arbitration and that Sunrun take seriously the need to both ensure a fair, equitable, positive and inclusive workplace. And be transparent with investors and employees about workplace conditions. Sunrun is clearly leading when it comes to residential rooftop installations. We'd like to see Sunrun lead when it comes to best practices for employees as well. Thank you.

Thank you, Dr. Hull, for presenting your proposal. That was the final proposal for today's meeting. We will now review if there are any questions submitted about the proposals before we close the polls. As a reminder, we will only review and answer questions that pertain to the proposals. There are no questions. We will now wait 20 seconds to allow anyone wishing to vote to do so through the proxy loading link on the left-hand side of the screen. [Voting]

Yes. It is now 8:41 a.m. on June 3, 2021, and the polls for each matter to be voted on at this meeting are now closed. No additional ballots, proxies or votes and no changes or revocations will be accepted. The proxies and ballots will be tabulated by the Inspector of election. At this time, the Inspector of election will provide us with a report on the voting results.

Thank you. With regard to proposal One, regarding pertaining to the election of directors, Katherine August-deWilde, Sunita Lontoh and Gerald Risk all receive sufficient affirmative votes to be elected to serve as Class III Directors. Proposal 2, the appointment of Ernst & Young as independent registered public accounting firm for the company for the year ending December 31, 2022, has been ratified. Proposal 3, the resolution to approve on an advisory basis, the compensation paid to the company's named Executive Officers has been approved. Proposal 4, the stockholder proposal related to the preparation of a public report on the impact of the use of mandatory arbitration has been approved.

Thank you. These are the preliminary results of voting. The final count may vary following final examination of the proxies and ballots. The final results of voting, including any ballots and proxies recorded during this meeting, will be set forth in the report of the inspector of election and will be included in the minutes of the meeting. The final results will also be reported in our Form 8-K that will be filed with the SEC within 4 business days after this meeting. This Annual Meeting of Stockholders is now adjourned. Thank you for your attendance.