DEF 14A: Emerald Holding Seeks Stockholder Approval for Officer Liability Amendment at 2024 Annual Meeting

Emerald Holding, Inc. is holding its 2024 Annual Meeting of Stockholders virtually on May 21, 2024, to vote on director elections, auditor ratification, and an amendment to limit officer liability.

Summary

• Emerald Holding, Inc. will hold its 2024 Annual Meeting of Stockholders virtually on May 21, 2024.
• Stockholders will vote on the re-election of Class I and Preferred Stock directors, the ratification of PricewaterhouseCoopers LLP as the independent auditor, and an amendment to the company's charter to limit the liability of certain officers.
• Holders of common stock and Series A Preferred Stock as of April 1, 2024, are entitled to vote.
• Onex Corporation owns a significant portion of Emerald's stock, representing approximately 90.5% of the common stock on an as-converted basis.
• The Board recommends voting FOR the re-election of directors, FOR the ratification of the auditor, and FOR the approval of the charter amendment.
• The company's revenues for 2023 were $382.8 million, an increase of 17.5% over 2022.
• Adjusted EBITDA for 2023 was $97.8 million, compared to $239.6 million for 2022.
• The company staged 141 in-person trade shows, conferences, and other events in 2023.

Sentiment

Score: 6

Explanation: The document is factual and informative, but the decrease in Adjusted EBITDA tempers the positive revenue growth. The document is neutral overall.

Positives

• The company's revenues increased by 17.5% in 2023 compared to 2022, reaching $382.8 million.
• Emerald successfully staged 141 in-person events in 2023.
• The company is taking steps to attract and retain talented executive officers by proposing an amendment to limit officer liability.

Negatives

• Adjusted EBITDA decreased from $239.6 million in 2022 to $97.8 million in 2023.
• Onex Corporation's significant ownership (approximately 90.5% on an as-converted basis) means Emerald is a controlled company, which reduces certain corporate governance requirements.

Risks

• The issuance of common stock upon conversion of the Series A Preferred Stock will result in immediate dilution to existing holders of common stock.
• The company's financial performance and executive compensation programs were impacted by the COVID-19 pandemic.
• The company's financial performance and executive compensation programs were impacted by the issuance of Series A Convertible Participating Preferred Stock.

Future Outlook

Management will report on the progress of the business and respond to comments and questions of general interest to stockholders at the Annual Meeting.

Management Comments

• Herv Sedky, President and Chief Executive Officer, stated that stockholders are cordially invited to attend the 2024 Annual Meeting of Stockholders.
• Herv Sedky thanked stockholders for their continued support and interest in Emerald Holding, Inc.

Industry Context

Emerald is a leading operator of business-to-business trade shows in the United States, leveraging its shows as key market-driven platforms.

Comparison to Industry Standards

• The document references a peer group of companies for Total Shareholder Return (TSR) comparison, including Ascential PLC, Hyve Group Plc, Informa PLC, Relx PLC, Viad Corp, Aramark, Barrett Business Services, Inc., KForce Inc., TrueBlue, Cinemark Holdings, Inc., National CineMedia, Inc., Gartner, Inc., IHS Markit Ltd., John Wiley & Sons, Inc. and Nielsen Holdings plc.
• The peer group's cumulative TSR is weighted according to the respective companies' stock market capitalization at the beginning of each period.

Management Changes

Corporate Governance

Related Party Transactions

• Various Onex entities and certain members of our management and our Board who had invested in our common stock entered into a stockholders agreement, dated July 19, 2013, with respect to such investment.
• We, Onex and certain of our executive officers also entered into a registration rights agreement dated July 19, 2013, as amended, in connection with the Onex Acquisition.
• On June 10, 2020, we entered into an investment agreement with Onex Partners V LP (Onex Partners V), pursuant to which we agreed to (i) issue to an affiliate of Onex Partners V, in a private placement transaction (the Initial Private Placement), 47,058,332 shares of Series A Preferred Stock for a purchase price of $5.60 per share and (ii) effect a rights offering to holders of our outstanding common stock of one non-transferable subscription right for each share of the our common stock held, with each right entitling the holder to purchase one share of Series A Preferred Stock at the Series A Price per share.
• In January 2018, Onex acquired a majority interest in SMG Holdings, Inc. (SMG), a global manager of convention centers, stadiums, arenas, theaters, performing arts centers and other venues.
• In 2019, Onex affiliates invested approximately $750 million in Convex Group Limited (Convex), a specialty property and casualty insurance company.

Stakeholder Impact

• Approval of the officer liability amendment could impact stakeholders by potentially reducing litigation costs and attracting talented executives.
• The conversion of Series A Preferred Stock will dilute existing common stockholders.
• Executive compensation decisions are designed to align the interests of executives with those of stockholders.

Next Steps

• Stockholders are urged to vote on the proposals outlined in the Proxy Statement.
• The company will file the Certificate of Amendment with the Delaware Secretary of State if Proposal 3 is approved.
• The company will publish voting results in a current report on Form 8-K within four business days of the Annual Meeting.

Key Dates

Keywords

Annual Meeting, Proxy Statement, Board of Directors, Stockholders, Emerald Holding, Officer Liability, Onex Corporation, Adjusted EBITDA, Director Election, Auditor Ratification