Netflix shareholders vote to reject executives' pay packages
Netflix shareholders voted against compensation packages for the streaming company's top executives, including co-CEOs Ted Sarandos and Greg Peters.
Shareholders voted on the non-binding "say-on-pay" advisory measure at Netflix's annual meeting on Thursday, with the result coming just days after the the Writers Guild of America, a union representing striking entertainment industry writers, urged shareholders to say no.
But because the vote is non-binding, the company's board may ignore its outcome and approve the compensation packages at its next board of directors meeting.
Sarandos could earn as much as $40 million this year from the combination of his base pay, performance bonus and stock options, compared to the roughly $50.3 million he made in 2022, Netflix's proxy statement shows. Meanwhile, Peters, his new co-CEO, could earn just over $34 million this year through a combination of base pay and stock options, a company SEC filing shows.
The WGA had urged investors to oppose the lucrative pay packages in a show of support for Hollywood writers' efforts to secure better pay and job security.
"While investors have long taken issue with Netflix's executive pay, the compensation structure is more egregious against the backdrop of the strike," WGA West president Meredith Stiehm wrote in a letter to Netflix shareholders.
Stiehm added, "If the company could afford to spend $166 million on executive compensation last year, it can afford to pay the estimated $68 million per year that writers are asking for in contract improvements and put an end to the disruptive strike."
By the time WGA sent the letter, the majority of shareholders had already voted "no" to the packages, a source familiar with the matter told Variety.
It remains unclear when the streaming company will hold its next board of directors meeting. Netflix did not immediately reply to CBS MoneyWatch's request for comment.
Netflix faces investors and writers' fury
Shareholders' rejection of the compensation packages comes as the streaming giant is under pressure after more than 11,000 television and film writers went on strike last month following the breakdown of negotiations between the Writers Guild of America and Hollywood studios.
Sarandos declined to accept an award at the PEN American Spring Literary Gala last month, citing the potential for a disruption due to the strike. Picketers have disrupted events such as Boston University's graduation ceremony, where Warner Bros. Discovery CEO David Zaslav gave the commencement address.
"Given the threat to disrupt this wonderful evening, I thought it was best to pull out so as not to distract from the important work that PEN America does for writers and journalists," Sarandos told Variety last month.
Shareholders have voted against Netflix's pay packages before. Last year, only about 27% of Netflix's investors voted for the proposed pay packages. Still, the pay packages for the company's then-CEOs, Sarandos and Reed Hastings, rose by about 31% and 25%, respectively, from 2021 to 2022, according to regulatory filings.
Netflix's stock has jumped 36% to $401.45 this year. In the first quarter of 2023, the company's revenue increased to $8.16 billion from $7.87 billion in the year-prior quarter, the company's SEC filing shows.