In a non-binding protest against exorbitant pay for top media executives, Netflix Inc. (Nasdaq: NFLX) shareholders decided to reject pay packages for the company’s leadership, including Co-Chief Executive Officers Ted Sarandos and Greg Peters.
Sarandos is expected to earn up to $40 million in salary, bonus, and stock options, while Peters, who was designated co-CEO in January, is expected to earn $34.6 million. Reed Hastings, co-founder and executive chairman of the business, will receive $3 million.
According to a person acquainted with the situation, shareholders voted against the planned remuneration during an annual meeting. Netflix’s board of directors can ignore the results, as they have in the past, despite the fact that the vote is relevant given the present conflict between major Hollywood studios and screenwriters.
The “say-on-pay” vote will not prevent executives from collecting as expected, but it is a rare public censure of media executive salary at a time of increased scrutiny.
The compensation committee of the board of directors “believes these changes to our compensation structure align with stockholder interests and incentivize [Peters and Sarandos] to execute on strategies aimed at achieving long-term success, while also maintaining aspects of our compensation program that we believe have helped attract and retain top talent to support our growth.”
In an SEC filing in April, Netflix stated that Sarandos and Hastings’ salary will increase in 2022, with each receiving roughly $50 million, despite the subscriber attrition and stock drop that made headlines in the first half of the year.
Striking Hollywood writers have blasted media firms for overpaying their bosses, citing the salaries of Walt Disney Co. CEO Bob Iger and Warner Bros. Discovery Inc. boss David Zaslav. According to the writers, they are asking for a pay raise that is less than what a few of billionaires make in a year.
The Guild went on strike in early May, with its members demanding more remuneration in the face of significant changes in how consumers watch their shows and films.
The majority of the votes were cast before the Writers Guild of America, which represents over 11,500 screenwriters, advised shareholders in a public letter last week to vote against the packages, according to the individual, who declined to be identified.
The development comes as the streaming giant starts its crackdown on password sharing in order to beef up its income stream. Starting in its US market, users subscribed to the Netflix Standard plan, priced at $15.49 per month, will now have the option to add one extra member at an additional cost of $7.99 per month. Subscribers with the Premium package, which includes 4K streaming, can add up to two extra members, with each member incurring an extra fee of $7.99.
Along with voting “no” on executive remuneration, shareholders also voted “no” on four other proposals and “yes” on two others, diverging from the company’s suggestion on only one of them. All nominees for the company’s board of directors were chosen, and the vote totals will be disclosed in the proposal outcomes filing.
Netflix last traded at $403.13 on the Nasdaq.
Information for this story was found via Bloomberg, Deadline, and the sources mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.