The Dow Chemical Company - Shareholder/Analyst Call
Dow Chemical Co. (DOW)
May 10, 2012 10:00 am ET
Executives
Andrew N. Liveris - Executive Chairman, Chief Executive Officer, President and Member of Environment, Health, Safety & Technology Committee
Charles J. Kalil - Executive Vice President of Law & Government Affairs, General Counsel, Corporate Secretary and Member of Management Committee
Amy E. Wilson - Assistant Secretary
Unknown Attendee
Ladies and gentlemen, please be seated. The 115th Annual Stockholders Meeting of The Dow Chemical Company will commence shortly. As the lights are lower, we remind our audience that the use of cameras and other recording devices is prohibited.
[Presentation]
Andrew N. Liveris
Thank you, and a really special salute to our 3 employees: Aletha Jones, Michael Kehr and Mike Priebe. Please, can you stand?
Great. Thank you for sharing your story with us. You're an inspiration and a fine example of what hard work and determination can accomplish. Thank you.
Good morning. Good morning to the stockholders of The Dow Chemical Company. I'm really very pleased to welcome you to the 115th Annual Meeting of your company. This meeting is being webcast, and we welcome those stockholders as well. I'm Andrew Liveris and I have the honor of serving as the Chief Executive Officer and your Chairman. On stage with me today are Charles J. Kalil, Executive Vice President and General Counsel and Corporate Secretary; as well as Amy Wilson, Assistant Corporate Secretary. Welcome, Chuck and Amy.
I'll start by introducing our current directors who are here with us today. And I'll ask that they stand and as they're introduced so that we can acknowledge them. Please hold your applause. And directors, please keep standing until we finish introducing all of our directors: Arnold Allemang, Jacqueline Barton, James Bell, Jeff Fettig, John Hess, Dennis Reilley, James Ringler, Ruth Shaw and Paul Stern. Please welcome your Board of Directors.
Before we move on, I would like to take a special moment to recognize 2 directors and thank them, Barbara Franklin and Paul Stern, for their contributions to the board and to the company. Unfortunately, Barbara couldn't be with us here today. She has a family emergency she had to attend to, but she's in our thoughts and we wish her the best. Barbara and Paul are both retiring from our board and at the conclusion of this meeting, and we thank them for their 30 years and 20 years of service, respectively. Thank you very much, Paul.
Since it's our tradition to also recognize good friends who are still with us here in our audience today, I would like to recognize -- start by recognizing our former directors, Willie Davis and Mike Dow, ask them to stand -- and extend our appreciation for their past dedicated service to our great company. Welcome. It's really wonderful to see you both here in great health. And thank you for your many, many contributions.
Now as it is in our tradition, I would like to recognize the group of people whose tremendous contributions to Dow are clearly very much appreciated. In 2011, Dow people once again made us very proud to be Dow shareholders and to be associated with this great company.
We will try something a little different this year: As I call out each group, please remain standing until I get to the end. I'm going to start first by asking any Dow retirees who are here with us today to please stand, and please remain standing. So thank you. See if we can orchestrate, so stay standing. Please stand if you're a current Dow employee with 20 or more years of service. Now you can see where this is going. 10 or more years, please stand. And now those with 5 or more years, please stand. And finally, those employees who have joined us in the last 5 years, please stand. Thank you. Please be seated.
What a remarkable visual demonstration of what we really are experiencing right now, right here at our great company: the benefits of our great legacy combined with our unlimited potential for our future as future generations join us and grow this great company. Thanks, everyone, for your great contributions.
Now early this year, we had the pleasure of implementing a particularly new recognition program to distinguish employees who have truly put our transformation into action. And this morning, we have the privilege of welcoming 7 Dow employees who were nominated for the best of the best transformation and action awards by their peers. Will those employees please stand? Welcome, welcome. Thank you. Those -- these employees exemplify what it takes to lead courageously, deliver innovative solutions, generate customer value and collaborate with superior results. And as I said, they were nominated by their peers. It's great to have you here. So thank you, everyone.
Now let's get to the official business before us today. It's my intent to chair this meeting, conducted in a matter stated on the agenda that you have received from your ushers. The procedure rules of the meeting are explained on the back of the agenda card. And really, as we move through the agenda, please limit any questions to the specific business items listed. You're going to have an opportunity to ask questions on any topic during the question-and-answer session after the conclusion of the meeting.
Mr. Kalil, Dow's Corporate Secretary, will now cover several business items. Chuck?
Charles J. Kalil
Thank you, Mr. Chairman. Good morning.
The minutes of the 114th Annual Meeting held on May 12, 2011, were reviewed and approved by the Committee of the Board composed of directors Barton, Ringler and Stern. As in the past, we will dispense with the reading of the minutes of that meeting. However, if you wish to review them, a copy is available from the Office of Corporate Secretary.
The company's bylaws require that any stockholder wishing to raise an issue of business in this year's meeting must provide a written notification to the secretary of the company. No such notifications were received. Notice of the Annual Meeting was distributed to all of our stockholders. A copy of both the notice and the affidavit of mailing will be incorporated in the minutes of this meeting.
The Board of Directors has appointed Broadridge Financial Solutions to act as the independent inspector of elections for the meeting. We are informed by our inspector of elections that there are represented in person or by proxy approximately 1 billion shares of common stock or approximately 88% of the issued and outstanding shares of the company. These proxies authorized Directors Barton, Reilley and Ringler to vote those shares at this meeting. Based on this information, the Chairman has declared a quorum present to transact the business before us today.
All shareholders of record at the close of business on March 19, 2012, are entitled to vote at this meeting. After we conclude discussion on the matters to be voted on today, those of you who have not voted your shares or wish to change your vote may cast your vote after the Chairman declares the polls open. Ballots will be available at that time. While the votes are being tallied, Andrew Liveris, Dow's CEO and Chairman, will give his report to stockholders. Following the conclusion of the meeting, we will open the floor for any general questions from our stockholders.
I declare this meeting is now duly convened for the purpose of transacting business properly before it. Mr. Chairman, this concludes my comments. Thank you.
Andrew N. Liveris
Thank you very much, Chuck.
So the first item to be voted on is for the election of our directors. No nominations were received in accordance with the procedures set out in the company's bylaws other than the names that appear in the proxy statement. No nominations will be accepted from the floor. Therefore, I declare that the nominations are closed and that the 10 directors named in the proxy statement are the nominees before the meeting. Your Board of Directors recommends that the stockholders vote for those 10 nominees.
Second agenda item is the ratification of the appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm for 2012. Your Board of Directors recommends a vote for this item.
Agenda item #3 is an advisory resolution to approve executive compensation. Information on this agenda item can be found on Page 49 of your proxy statement. Your Board of Directors recommends a vote for the approval of the advisory solution on executive compensation.
Agenda item #4 is a management proposal for the approval of the 2012 stock incentive plans. Information on this agenda item can be found on Page 50 of the proxy statement. Your Board of Directors recommends a vote for approval of the 2012 executive stock incentive plan.
Agenda item #5 is a management proposal for approval of the 2012 employee stock purchase plans. Information on this agenda item can be found on Page 56 of your proxy statement. Your Board of Directors recommends a vote for approval of the 2012 employee stock purchase plan.
Next on the agenda are the stockholder proposals. Agenda item #6 is a stockholder proposal on action by written consent. I understand that Natalie Walsh [ph] is here year to speak for the proponent. The need for a second has been waived by the company.
Unknown Shareholder
Agenda item 6, stockholder proposal on shareholder action by written consent, sponsored by William Steiner of Piermont, New York. Resolved, shareholder action by written consent.
Shareholders hereby request that our Board of Directors undertake such steps as may be necessary to permit written consent by shareholders entitled to cast the minimum number of votes that would be necessary to authorize the action at a meeting at which all shareholders entitled to vote thereon were present and voting to the fullest extent permitted by law. This includes written consent regarding issues that our board is not in favor of. This proposal topic won majority shareholder support at 13 major companies in 2010. This included 67% support at both Allstate and Sprint.
Hundreds of major companies enable shareholder action by written consent. Taking action by written consent in place of a meeting is a means shareholders can use to raise important matters outside the normal annual meeting cycle. Please encourage our board to respond positively to this proposal to support improved corporate governance.
Shareholder action by written consent, proposal 6.
Andrew N. Liveris
Thank you, Ms. Walsh. For reasons set forth on Pages 58 and 59 in your proxy statement, your board unanimously recommends a vote against this proposal.
Agenda item #7 is a stockholder proposal on independent board chairman. I also understand that Natalia Walsh is here to speak for the proponent. The need for a second has been waived by the company.
Unknown Shareholder
Agenda item 7, stockholder proposal on independent board chairman, sponsored by Kenneth Steiner of Great Neck, New York. Resolved, independent board chairman.
Shareholders request that our board of directors adopt a policy that, whenever possible, the Chairman of our Board of Directors shall be an Independent Director by the standard of the New York Stock Exchange who has not previously served as an executive officer of our company. This policy should be implemented consistent with contractual obligations in effect. The policy should also specify how to select a new Independent Chairman if a current Chairman ceases to be independent between Annual Shareholder Meetings. To foster flexibility, this proposal gives the option of being phased in and implemented when our next CEO is chosen.
Many companies already have an Independent Chairman. An Independent Chairman is a prevailing practice in the United Kingdom and many international markets. This proposal topic won 50%-plus support at 4 major U.S. companies in 2011. An Independent Chairman policy can improve investor confidence in our company and strengthen the integrity of our board. Please encourage our board to respond positively to this proposal for an independent board chairman, proposal 7.
Andrew N. Liveris
Thank you, Ms. Walsh. For reasons set forth on Pages 60 and 61 in your proxy statement, your board unanimously recommends a vote against this proposal.
That concludes the list of agenda items before the meeting today. If there are no other comments on the agenda items, we can actually move on to the voting.
I declare that the polls are now open for each matter to be voted on today. As we get people ready, the inspector and their assistants will now distribute and collect ballots for any stockholder who would like to vote at the meeting. And we're going to close the poll shortly after everyone has had an opportunity to vote. And if you'd like a ballot, please raise your hand so an usher can get you one. So any stockholder who was voted previously either by proxy, by mail or by telephone or through the Internet does not need to complete a written ballot at the meeting because your vote has actually already been tabulated. However, if you wish to change your vote, you can actually ask for a ballot now. And as you fill out your ballots, return them to the ushers. Thank you.
Great. I declare that the polls are now closed. And will the inspectors to -- please collect and tabulate all of the proxies and the ballots? And while the votes are being counted, I'm going to proceed with the program and the CEO report.
The year since we last met has truly been an exciting one for Dow. Many of the changes we've made over these past few years against the backdrop of a lot of market volatility and a lot of global uncertainty have been institutionalized. We have an integrated portfolio that is delivering in the near term and is really built to deliver or serve the medium and long terms. Dow is a company that is constantly executing against our strategy of transformation, a company that is consistently delivering shareholder value. We are a company that has strengthened its balance sheet, increased its cash flow and put more value into your hands, including a second quarter dividend increase that is 28% higher than the last quarters. This is also a company that is positioned for the future, an integrated company at the intersection of all sciences, of assets and feedstocks, of technologies and markets. We are truly advancing the frontiers of science and innovating solutions to some of the world's greatest challenges. Dow is a company with a commanding presence in global markets, a company with a powerful feedstock advantage, an earnings growth company with the cash flow and the commitment to keep momentum [ph] running with shareholders while investing in future growth. All of this is made possible by the men and women of Dow who deliver each and every day. Thanks to the incredible work of our 52,000 employees, your company is stronger, more agile and ready to seize opportunities all around the world.
As an example, just last week, I inaugurated Dow's first office in Nairobi, Kenya. And over the last 3 weeks, I have traveled to the opening of an R&D facility in Seoul, Korea; our large new propylene oxide facility in Thailand; our new office in Singapore; and to Texas, some say that might be another country, where we've announced the construction of some amazing new facility. Our company is on the move and our achievements are especially impressive when you look at the health of the global company.
Dow has manufacturing facilities in 36 countries and we sell in over 160. Our sheer scale gives us deep, intuitive knowledge of global, national and regional markets but always at the local level. We are the ultimate community company, the ultimate "on the ground with our customers and our neighbors" company. We know where opportunities will arise and where pitfalls will appear. And we have the strategy to succeed and the cash resources to adapt in realtime, so global volatility and uncertainty did not unnerve us or deter us. This company is engineered not just to be resilient not just to survive but to thrive in this dynamic world.
Let me give you a sense of just how strong our performance has been. 2011 was a successful and a strategically important year for Dow, and here are some of the headlines.
Earnings per share grew 29% year-over-year and revenue grew 18%. We rewarded our shareholders and increased our dividend by 67%. Sales in fast-growing emerging regions surpassed $19 billion for the first time in Dow's history, and just sales in the Asia Pacific region alone were a record $10.5 billion. Equity earnings reached $1.2 billion and EBITDA rose 12% from 2010.
We have accomplished all of this, posting record revenues and cash flow at a time when it's already mentioned many economies, including the United States, are still under a tremendous strain. And all this reflects a company with the flexibility and the resources to deliver shareholder value in the near term and earnings and sales growth over the long term. Many companies turn into the one or the other. Only the best companies can deliver both. And Dow is delivering both in a big way.
As I mentioned, we made good on our commitment to remunerate our shareholders in the second quarter, increasing our dividend payout by 28%. That is, of course, on top of the previous year's increase. And this, by the way, marks the 403rd quarterly dividend Dow has paid in a row, more than 100 years. This signals our confidence in our ability to keep generating cash. Today, we're on target to generate $8 billion in cash flow from 2011 to 2012 and $35 billion in cash from operations from 2010 to 2015.
Our financial flexibility allows us to aggressively pursue future growth. Today, Dow is an $8.4 billion company in terms of EBITDA, but we are moving closer and closer to our near-term target of $10 billion. And over the longer term, we expect to achieve $15 billion in EBITDA. From $8.4 billion to $10 billion to $15 billion, that's our trajectory. And speeding us along this pathway are 4 key value drivers: integration, operational efficiency, feedstock advantage and innovation. So let me briefly cover each in turn.
And I want to begin with integration because this historic strength of our company really remains at the core of the new Dow. Integration is the key component of Dow's competitive advantage. It sets us apart and drives our success. Dow is not like most of our competitors, a single-line, single-value-chain type of company. We're a complex organism, one that integrates multiple lines of science and technology, multiple feedstocks from multiple sources, multiple assets, and turns them into multiple products and solutions and deploying them in multiple markets. Simply put, it all just fits together. And this enables us to harvest more: more innovation, more profit, more shareholder value from everything we do. We have assets and feedstock integration upstream, technology and market differentiation downstream and, therefore, an unrivaled ability to capture efficiencies and growth synergies across many different value chains. This level of integration is contributing as much as $2 billion in EBITDA per year.
And Dow's geographic diversification also serves our strategy. As I mentioned, Dow's global reach gives us the ability to cease -- quickly cease many market opportunities whenever and wherever they arise. This mitigates our risk and maximizes our profits. Over the past year, we have continued expanding to dynamic emerging geographies. For example, we've invested $400 million in South Korea where we're entering high-growth industries, like producing the materials for LED lighting and advanced computer chips for new electronic devices. In Thailand, we launched our new hydrogen peroxide and propylene oxide plant, a facility that will fuel our downstream businesses growth across Asia Pacific. And in Saudi Arabia, steel is on the ground for what will be the largest integrated chemical complex ever built in a single phase. Sadara, a joint venture with Saudi Aramco, will allow us to serve fast-growing regions from the Middle East to Europe, from India to Africa.
All told, we achieved record sales in emerging economies in 2011. About 1/3 of our sales have come from these fast-growing regions, and we're on track to reach 35% of our sales by the end of this year.
Dow's second value driver is our operating and capital efficiency, which leads the industry. This is another historical strength of our company and one that continues to underpin the new Dow. It's how we harvest the most value from every aspect of our operations.
We have strategically strengthened our balance sheet, removing $2 billion of structural cost since 2009 and divesting $8 billion in nonstrategic assets. We continue to improve our fixed cost productivity as well and expect to see an additional 30% improvement by 2015. And at the same time, we're successfully executing our deleveraging plan, which remains one of our top priorities. In addition to paying down $4 billion in debt in 2011, which has reduced our interest expense by about $250 million annually, we have reduced our net debt-to-capital ratio from 51% in the second quarter of 2009 to 41% today, very close to our year-end target of less than 40%.
Last year, we also launched our Efficiency for Growth initiative to reduce input costs and improve operational reliability. We project that these efforts will deliver an incremental $2 billion to $3 billion of cumulative cash flow by 2015. These efforts reflect the determination of this company to growing our company and delivering the most profitable returns for our investments.
As we've said, we'll take swift, proactive steps to fulfill that commitment. And that sometimes requires difficult decisions, such as the ones we had to make recently in response to the continued global volatility particularly in Western Europe. But we know that growth, as a rule, just doesn't come easily. It tests our resolve. And believe me, your company has that resolve.
A big reason why we're so confident is due to our third value driver, Dow's formidable feedstock advantage. Feedstocks, as you know, are our major building blocks. We turn them into higher-value products and high profits. For that reason, we always need affordable resources mostly of the hydrocarbons kind, and we have them. One of the reasons our value proposition is increasing is that 70% of our ethylene production is in cost-advantage regions. And that starts right here, right here in America.
Shale gas discoveries in the United States, the "shale gale," has been a true game-changer for the manufacturing sector and certainly for your company. Access to these feedstocks has allowed us to do what we never thought was possible just a few short years ago: expand operations right here in the United States on a truly massive scale. Just last month, we reached another milestone in our plan to invest $4 billion in our Gulf Coast operations, the construction of a world-class ethylene cracker in Freeport, Texas. Our plan will increase our ethylene production capabilities by as much as 20% in the United States over these next 3 years. And just as critically, our internal propylene supply will increase with the construction of 2 on-purpose propylene facilities in the region.
So I described our integration. Here is an action. Further connecting Dow's U.S. operation with ethane and propane feedstocks will benefit our downstream businesses, creating thousands of jobs at Dow and supporting tens of thousands more across America. These shale gas dynamics, along with our Gulf Coast investments, will deliver further value for our shareholders. And that is an additional $2 billion of EBITDA by 2017.
Beyond the U.S., we've also expanded to cost-advantage regions all over the world: from Brazil where we are creating ethylene and polyethylene from sugarcane to, of course, Saudi Arabia, with Sadara, where it will allow us to draw on that kingdom's vast natural gas liquids resources to add value and sell our products across Asia, the Middle East and Africa. These efforts have established your company for the long haul as the largest, most flexible ethylene and on-purpose propylene producer in the world.
And as I said, these are building blocks. So what do we build from them? This brings me to our fourth value driver, the one that I am personally the most proud of: innovation. When we began our journey to transform Dow's portfolio, the truth be known, our technology cupboard was almost bare. We no longer look like or felt like the innovative company our founders started and that generations of Dow employees had sustained. Simply put, when it came to innovation in technology -- and technology, we had lost our way. I'm very proud to say this is no longer the case. Today, Dow is in the business of breakthroughs. We are in the business of solutions. Our large innovation pipeline is speeding up our growth and expanding our margins. As
I stated earlier, Dow is no longer a traditional chemical company. Our expertise now lies where chemistry, biology and material science all intersect. In that space, that vast solution space, the market opportunity is $3.5 trillion. And to capture these markets, we've invested $1.65 billion in our R&D pipeline in 2011 alone, the largest investment of any global company in this space. That's why, in every Dow plant and every Dow laboratory, we're hearing the steady drumbeat of innovation.
Dow owns well over 18,000 active U.S. and overseas patents and filed over 300 new ones just last year alone. And recently, I toured our R&D labs in Texas where 12 Dow scientists showed me the cutting-edge products they're creating. They're in Texas, and in every Dow R&D facility, our integration is allowing us to leverage technology across the value chain, speeding up commercialization. Indeed, more than 100 new projects will be commercialized within these next 36 months, 100. And those projects, the ones in the implementation stage of R&D, have a net present value of over $8 billion. All told, as we've reported before, the 500-plus projects we have in our innovation pipeline have a net present value of $33 billion. But the extraordinary new products and technologies developed in Dow's labs do more than just lift our bottom line: They also lift everyday the health and prosperity of people all over the world.
Our work is a force for human progress. Of course, you're all quite aware of our blockbuster innovations like POWERHOUSE Solar Shingles, but there are many, many others you might not yet have heard of. For example, to fight obesity, Dow has developed the world's first saturated fat-free cooking oil. In less than one year, it has reduced the amount of trans and saturated fats Americans consume by more than 1 billion pounds. More of slimmer-looking people out there in our future. And to make cars and trucks, including hybrid and electric ones, to go farther in less fuel, Dow has just partnered with Ford to develop ways to use advanced carbon fiber composites to cut the weight of vehicles by about 750 pounds. And in the past year, we've also developed EVOQUE, an innovative polymer that replaces an expensive pigment used in paint, allowing it to be reproduced more profitably and affordably and to cover services better.
A new kind corn seed that is insect-resistant and allows farmers to plant more in their fields. An advanced insulation material for power cables that lasts longer and reduces the chances of fires and short-outs. And at that very lab in Texas I just mentioned, we've developed an advanced subsea flow assurance insulation system called NEPTUNE that makes offshore oil drilling more reliable and dramatically reduces environmental risks.
In tangible ways, Dow products like these are changing the way people live all over the world. This company is doing good and profiting greatly in the process. And that's why we are confident that by the end of this year, innovation will have driven an additional $500 million in EBITDA since 2009. And by 2015, that cumulative number should reach $2 billion. Indeed, if you look at our pipeline, you can see more cutting-edge products coming along our way. You see faster growth, higher margins and greater shareholder value as well.
And Dow doesn't simply operate all over the world. It's respected all over the world. Just last week, Dow was named by the Hay Group as 1 of the 20 best companies in the world for leadership. And over the last year, Thomson Reuters named us one of the world's most innovative companies. Our Shanghai Dow Center was named the best R&D institute in China by global enterprise magazine. Dow Brazil was ranked among the top 5 most innovative companies there. Dow AgroSciences received an international award for biotechnology. And our POWERHOUSE Solar Shingle was just named Best New Product at the 2012 Edison Awards.
And we're also winning recognition in other areas, for example, in ensuring the health and welfare of our employees. The National Safety Council has just awarded Dow its prestigious Green Cross award, putting us amongst an elite group of companies. Our role as a leader and innovator is one that we're very proud of and one we are very excited to share with the world this summer when we sponsor the London Olympics. Our Olympic partnership is a significant business opportunity for our company. The games will be a showcase of Dow solutions. Our goal is to generate $1 billion in new revenue over the 10 years of our partnership. And we're already seeing a bottom line return through infrastructure, equipment and incentive marketing. We're even seeing the DOW Diamond in supermarkets in South America where the packaging of the produce for a major Brazilian food manufacturer is co-branded with our logo and the Olympic rings, further boosting our sales revenues.
Dow is also a leader in public policy in many of the countries where we do business. Today, more than ever, the global dialogue is based on the golden triangle of government, business and civil society in a truly collaborative approach. If we're a part of that conversation and play offense as well as defense, we can drive growth for Dow and for the entire manufacturing sector, especially our customers. Dow's voice is being heard, our influence felt, and policies as a result are changing. And taken together, these value drivers are moving us swiftly and purposely along the pathway from $8.4 billion in EBITDA to $10 billion to $15 billion. And we're doing this in the way growth companies do: not by accident, not by short-term thinking but by the steady execution of smart, strategic choices.
That's why we've not only invested $20 billion in R&D and capital over these last few years, we have changed the way we innovated. We've invested in an additional $20 million in acquisitions, investments that are paying off. But the even greater returns, we know will be in our future growth. And going forward, you can expect us to grow. You can expect us to keep creating world-changing solutions and, as we do these things, to increasingly reward, consistently reward our shareholders. You can expect to prove -- us to prove again what we've shown already: that we're a company that sets ambitious targets and meets or exceeds them, that we're a company that delivered on its commitments and promises and will keep on doing so. That's our goal. That and nothing less. And that, you can count on.
Thank you very much. Thank you. Thank you very much. I believe the report from the inspector of elections should be ready, so I'm going to ask Amy Wilson, Dow's Assistant Corporate Secretary, to provide these preliminary results. Amy?
Amy E. Wilson
Thank you, Mr. Chairman. Subject to the final tabulation of votes, which should not materially change the results, I'm pleased to report the following preliminary results.
With respect to agenda item 1 and the 10 nominees named in the proxy statement for election as directors, I can report that each nominee received an overwhelming majority of the votes cast in support of their elections.
With respect to agenda item 2, the ratification of the appointment of Deloitte & Touche LLP, we received 98.5% of the votes cast in favor of their continuing as Dow's independent auditors.
Agenda item 3, the advisory resolution to approve executive compensation, received 83% of the votes cast in favor of approving compensation of the company's named executive officers.
Agenda item 4, the approval of the 2012 stock incentive plan, received 84% of the votes cast for approval of the plan.
Agenda item 5, approval of the 2012 employee stock purchase plan, received 98% of the votes cast for approval of the plan.
Agenda item 6, the stockholder proposal on shareholder action by written consent, received 39% of the votes cast for the proposal.
And finally, agenda item 7, the stockholder proposal on independent board chairman, received 36% of the votes cast for the proposal.
This concludes the preliminary voting reports. Thank you.
Andrew N. Liveris
Thank you, Amy. So based on these preliminary voting reports, I hereby by confirm that all 10 nominees have been duly elected directors of The Dow Chemical Company to serve for a one-year term and until their successors are duly elected and qualified.
I also confirm the ratification of the appointment of Deloitte & Touche LLP as the company's independent registered public accounting firm for 2012.
With respect to the advisory vote on executive compensation and approval of the 2 stock plans, I confirm that these resolutions are passed. And you heard the preliminary results of the voting on the other agenda items.
And consistent with past practice, the final voting results will become part of the record of the meeting and the results will be posted in the company's website as soon as they are available. These results are also being included in the Form 8-K to be filed in connection with the ballots voted upon at the meeting.
So before going to the question-and-answer period, is there any further business to come before the meeting? Hearing none, I declare this meeting adjourned.
Okay, [indiscernible] gabble here somewhere, which I'm going to do that with.
Question-and-Answer Session
Unknown Attendee
Speed up on one [indiscernible].
Andrew N. Liveris
I've always wanted to do that [indiscernible]. Now we'll move on to the general question-and-answer period. There are 2 mics alone about midway on each side of the auditorium. If you'd like to ask a question, please go to one of the microphones so that everyone can hear you. You're going to be asked to complete a card that will enable us to identify you, for the record, if you're a stockholder or a proxy. If you are a proxy for a Dow stockholder, you must name the stockholder you represent. We always permit as many as questions as possible within the time frame allotted and then ask that you please be brief. And as to the rules of meeting, each speaker is limited for one question for a total of 2 minutes, and that's really sporadical [ph] to that [indiscernible] time. And I'm going to pause to say most. I'm going to limit my response [indiscernible].
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