Netflix shareholders voted this week to reject lucrative pay deals for the company’s executives, including co-CEOs Ted Sarandos and Greg Peters. This vote is not binding and may be canceled by the Company’s Board of Directors at its next meeting. Explanations.
The result is notable, just days after the Writers Guild of America (WGA), which represents screenwriters currently on strike, sent out a public letter urging the streaming giant’s shareholders to reject the compensation plans.
The compensation offered to Mr. Sarandos for 2023 could reach US$40 million, in the form of base salary, performance bonus and stock options. Mr Peters, who was named co-CEO in January after the departure of Reed Hastings, is expected to receive up to US$34.6 million. As for Mr. Hastings, who has become executive chairman, he is on track to earn $3 million for the year.
Shareholders voted at their annual general meeting as the guild’s strike entered its fifth week. They made no public comment during this brief meeting.
According to her, if Netflix is ready to pay such large sums to its executives, it should also be ready to pay its writers what they are worth, a sum which she estimates at 68 million US dollars per year. Stiehm sent a similar letter to Comcast shareholders, who will be meeting next week.
Netflix ushered in the age of streaming, which shook up the entertainment industry, including its compensation structures. The result has been a sharp increase in the number of TV series and movies in production, but screenwriters say their salaries have stagnated and their working conditions have deteriorated.
Shareholders have voted against executive compensation in the past. Last year, according to Netflix’s circular, shareholders rejected a proposal that prompted the company to invite 26 shareholders, representing 57% of outstanding shares, to participate in additional calls to discuss executive compensation. At the time, Netflix had already made changes to its 2023 compensation package for its three top executives, which included capping each at $3 million, requiring a minimum of 50% of compensation to be tied to stock options and introduced a performance-based cash bonus.
Netflix declined to say when its board would meet to discuss compensation plans. In the meantime, the writers’ strike continues.
