In a largely symbolic rebuke to the streaming giant’s leaders, Netflix Inc (NFLX.O) shareholders on Thursday withheld their support for the company’s executive pay package in a non-binding vote that followed a call by striking Hollywood writers to reject the proposed 2023 compensation. The vote, which was one of several put to a non-binding “say on pay” advisory measure during the 15-minute annual shareholder meeting that was streamed online, pertained to senior-level executives, including Co-CEOs Greg Peters and Ted Sarandos and co-founder and board chair Reed Hastings. The exact tally of votes will be released in a subsequent SEC filing.
The rebuke was the latest sign of heightened scrutiny over executive pay at media companies, particularly as the 2023 writers’ strike entered its fifth week. The strike has centered on issues such as fair compensation, minimum staffing numbers for writer rooms, writing job security, and viewer-based residuals for Netflix series. But the writers also have criticized the top executives of legacy studios and streaming giants for seeking outsized salaries while many workers face stagnant wages.
Netflix’s compensation structure was especially egregious for the writers, who urged investors to give it the thumbs down in a letter sent Tuesday, citing the “unfairness” of the arrangement at a time when the guild is at an impasse with the streaming and traditional studios. The WGA has also sent a similar request to Comcast Corp’s (CMCSA.O) shareholders, who are scheduled to weigh in on executive pay at next week’s Comcast shareholder meeting.
Even though the vote was nonbinding and the company’s board could overrule it, the result could set a new standard for how shareholders view and regulate compensation. It is a significant development in the ongoing debate about executive pay, and it could encourage other investors to push back against excessive executive packages at their own companies.
In a statement, the WGA called the outcome of the vote a “silver lining” that showed some investors were willing to speak out against the “unfair and unsustainable” compensation at Netflix and other media companies. The WGA said it would continue to call on investors to speak out against the excessive compensation at other media and tech companies in the coming months and that they should support the ballot proposals presented at upcoming meetings. Those include the annual shareholder meetings of both Netflix and Comcast, slated for June 1 and 7. Last year, only 27% of Netflix shareholders supported the company’s 2022 executive compensation plan. The company made changes as a result of that vote. The WGA plans to send a similar request to Comcast’s shareholders, who are slated to vote on executive compensation at their meeting on June 7. WGA President Meredith Stiehm will also be speaking out at the Comcast meeting. She will highlight the need to vote against any executive pay proposals deemed inappropriate in light of the ongoing writers’ strike and the need for more protections for the writers negotiating their rights.
