New York CNN –
Netflix shareholders on Thursday voted to reject multimillion-dollar pay packages for the company’s top executives, including co-CEOs Ted Sarandos and Greg Peters.
The non-binding vote comes amid a strong upswing for a company that lost more than half of its value in 2022 as people began to leave the country after years of pandemic isolation. Last year, consumers rejected price hikes for streaming services like Netflix, and investors began to criticize the company for outrageously paying for content while customers were churn. But Netflix stock is up 36% so far this year as shareholders believe the streaming sell-off may have been overblown.
Still, the vote came just days after the Writers Guild of America asked investors to reject the packages. In a letter, she said a vote was inappropriate as Hollywood writers entered the fifth week of their strike for better working conditions and bigger contracts.
“While investors have long had dissatisfaction with Netflix executive compensation, in the context of the strike, the compensation structure is more egregious,” WGA West President Meredith Stiehm wrote in the letter to the company’s shareholders.
If Netflix can afford to spend an estimated $166 million on executive compensation, it should also be able to pay the estimated $68 million the authors are asking for in their contract negotiations, she wrote.
The Writers Guild of America has targeted high executive compensation as a key issue in its ongoing negotiation tactics. The union sent a similar letter about salary proposals to NBCUniversal’s parent company, Comcast (CMCSA), which will hold its annual general meeting next week.
Frederic J Brown/AFP/Getty Images
Striking writers march with signs at the picket line on the fourth day of the Writers Guild of America strike in front of Netflix in Hollywood, California May 5, 2023. More than 11,000 Hollywood television and film writers have been on the first strike since 2007, after talks had not reached an agreement with studios and streamers about pay and working conditions.
Netflix’s proposed executive salary packages for 2023 included up to $40 million for Sarandos, including base salary, performance bonus and stock options. Peters could get up to $34.6 million.
Reed Hastings, who stepped down as CEO of Netflix (NFLX) in January and now serves as the company’s chief executive officer, would take home about $3 million this year.
Other Netflix executives anticipate big payouts in 2023. According to the proposal, Netflix CFO Spencer Neumann would receive $14 million, Chief Legal Officer David Hyman $11 million, and Chief Communications Officer Rachel Whetstone is on track to Get $6.5 million.
According to a Securities and Exchange Commission filing, the average Netflix employee made $218,400 in 2022. This would put the ratio of CEO salary to average employee salary at 234 to 1.
The Netflix board, meanwhile, is able to ignore the results of this “pay say” vote and approve executive compensation plans despite shareholder wishes. The board has already unanimously recommended voting in favor of the pay packages.
Last year, just 27% of Netflix shareholders approved executive compensation packages for 2022. The final balance of this year’s meeting has yet to be published.