Netflix Shareholders Vote to Reject Executive Pay Packages
The news
Netflix shareholders voted Thursday to reject lucrative pay packages for the company’s executives, including co-CEOs Ted Sarandos and Greg Peters. The vote is non-binding and can be rejected by the company’s board the next time it meets.
But the remarkable result came just days after the Writers Guild of America, which represents writers participating in a strike, sent a public letter urging the streaming giant’s shareholders to reject the compensation plans.
Mr. Sarando̵[ads1]7;s proposed 2023 pay package 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 from the role, is set to receive up to $34.6 million. And Mr. Hastings, who became executive chairman, is on track to earn $3 million for the year.
Why It Matters: Striking writers have been particularly critical of Netflix.
The shareholders voted during their annual meeting, as the guild’s strike entered its fifth week. They made no public comments at the brief meeting. Earlier this week, Meredith Stiehm, the president of the western branch of the Writers Guild of America, wrote in the letter to shareholders: “While investors have long taken issue with Netflix’s executive pay, the compensation structure is even more serious in light of the strike.”
She argued that if Netflix was willing to pay its executives such large sums, they should also be willing to pay writers what she said they were worth, a sum she estimated at $68 million annually. (Stiehm sent a similar letter to Comcast shareholders, who are meeting next week.)
Netflix largely ushered in the streaming era, which upgraded the entertainment industry, including its compensation structures. The result has been a sharp increase in the number of TV series and films in production, but writers say their wages have stagnated and working conditions have worsened.
Background: Shareholders have voted against executive pay packages in the past.
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 outstanding shares, to participate in additional talks to discuss executive compensation. At the time, the company had already made changes to the 2023 compensation program for the top three executives, which in part capped each individual’s salary at $3 million, required that a minimum of 50 percent of compensation be tied to stock options and introduced a benefit. -based cash bonus.
What happens next: A board meeting awaits.
Netflix declined to comment on when the board will meet to discuss the payment packages. Meanwhile, the writers’ strike continues.
