Netflix shareholders vote to reject executive pay packages
The news
Netflix shareholders on Thursday voted against the lucrative compensation packages of the company’s leaders, including co-chief executives Ted Sarandos and Greg Peters. The vote is non-binding and can be revoked the next time the Company’s Board of Directors meets.
But the result was remarkable just days after the Writers Guild of America, which represents writers participating in a strike, issued a public letter urging shareholders of the streaming giant to reject the compensation plans.
Mr. Sarandos’ proposed compensation package for 2023 would be worth up to $40 million through a combination of base salary, a performance bonus and stock options. Mr. Peters, who was named co-chief executive in January after Reed Hastings stepped down, is expected to receive up to $34.6 million. And Mr. Hastings, who became executive chairman, is on track to earn $3 million this year.
Why it matters: Notable writers were especially critical of Netflix.
Shareholders voted at their annual meeting, as the guild’s strike entered its fifth week. They made no public comments during the short meeting. Earlier this week, Meredith Stiehm, the president of the western arm of the Writers Guild of America, wrote in the letter to shareholders: “While investors have long objected to Netflix executive pay, the pay structure is even more blatantly against the background of the battle.”
She argued that if Netflix was willing to pay its executives such large sums, it should also be willing to pay its writers what she said they were worth, an amount she estimated at $68 million a year. (Ms. Stiehm sent a similar letter to Comcast shareholders, who meet next week.)
Netflix largely ushered in the streaming era, which turned the entertainment industry upside down, including its compensation structures. The result has been a sharp increase in the number of TV shows and movies in production, but writers say their wages have stagnated and their working conditions have deteriorated.
Background: Shareholders have previously voted against executive compensation packages.
Last year, according to Netflix’s proxy statement, shareholders also rejected a “Say on Pay” proposal, prompting the company to invite 26 shareholders, representing 57 percent of the outstanding shares, to participate in additional talks to discuss the to discuss executive compensation. At that time, the company had already made changes to the 2023 compensation program for the three top executives, capping each of their salaries in part at $3 million, requiring a minimum of 50 percent of compensation to be tied to stock options and establishing a performance plan. implemented. -based cash bonus.
What’s Next: A board meeting is waiting.
Netflix declined to comment on when the board would meet to discuss the pay packages. Meanwhile, the writers’ strike continues.