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ANALYSIS: Will Coronavirus Impel Virtual Annual Meetings?

March 12, 2020, 10:49 AM

As businesses around the country test their remote working capabilities to combat the spread of the new coronavirus, many public companies are also faced with the decision of whether to hold their annual shareholder meetings in person. As we head into proxy season, the question of how Covid-19, as the disease caused by the virus is known, will affect annual meeting attendance remains largely unanswered. But we are beginning to learn about what some companies are doing to accommodate shareholders’ desire or need not to travel.

Virtual Meetings

Starbucks Corp. recently announced that “[i]n light of public health concerns regarding the coronavirus outbreak, the Annual Meeting will be held in a virtual meeting format only.” The meeting is scheduled to take place on March 18. Starbucks has taken other proactive measures, like adjusting paid leave policies, in response to the spread of the new coronavirus.

A search of public company proxy and information statements shows that a handful of companies are taking decisive steps to address the potential complications caused by travel limitations and a general uneasiness about gathering in large groups. DLH Holdings Corp., a healthcare services company, is holding its annual meeting virtually March 12. The company announced that it will hold a conference call and webcast to accommodate travel limitations.

Another Seattle-based company, F5 Networks Inc., announced the availability of a virtual meeting format where shareholders can vote electronically. However, the in-person meeting will still occur for those who wish to attend in person. The F5 annual meeting is also being held March 12.

Location, Location, Location

Bioanalytical Systems Inc. has taken a different approach. The company changed the location of its annual meeting “to minimize interactions amongst those attending the meeting and [its] employee population at company headquarters.” The company also urged shareholders to vote in advance of the meeting rather than attending in person to vote. Bioanalytical Systems is scheduled to hold its annual meeting on March 19.

Wait and See

Most companies are still using the wait-and-see method. Citigroup Inc., Moody’s Corp., and others have stated that they will monitor the situation and, if it is not advisable to hold the annual meeting in person, will announce alternative arrangements for the meeting ahead of the meeting date.

Of course, many companies already have a virtual meeting option. It is yet to be seen whether more companies will follow Starbucks’ lead and make that option mandatory.

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