Against the backdrop of the ongoing writers strike, Netflix shareholders in a non-binding vote declined to support compensation packages for the streaming service’s top leadership.
As reported by Deadline, the vote took place during Netflix’s annual shareholder meeting Thursday, which was webcast, and the vote tally will be reported in documents filed with the SEC (which were not yet filed as of the time of publication). The so-called “say on pay” vote includes pay packages for Netflix co-CEOs Ted Sarandos and Greg Peters, as well as co-founder and executive chairman Reed Hastings.
The vote doesn’t mean that Netflix’s top execs won’t ultimately get their expected pay packages, but as the report pointed out, it represents an uncommon public rebuke. On Twitter WGA West noted that less than 4% of executive compensation shareholder proposals failed in 2022. Ahead of the vote, the Writers Guild of America West union urged shareholders to reject the lucrative compensation proposals for Netflix leadership, saying it would be “inappropriate” with the ongoing strike and noting that “the compensation structure is even more egregious against the backdrop of the strike.”
“Shareholders should send a message to Netflix that 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,” Writers Guild of America West President Meredith Stiehm wrote in a letter to Netflix shareholders.
Responding to the vote on Twitter Thursday, the WGA West said shareholders “voiced their disapproval of Netflix’s outlandish exec pay totaling over $166 million for 2022.” It went on to say that the “excessive sum” paid to a handful of executives “could pay for Netflix’s annual share of all of WGA’s proposed improvements for writers- twice over.”
According to an April regulatory filling, under proposed 2023 pay packages, Hastings is set to receive $3 million (including $500,000 annual salary and $2.5 million in stock); Greg Peters’ compensation could total around $34.6 million (including a $3 million annual salary, $17.3 million in stock and is eligible for a bonus of up to $14.3 million); while Ted Sarandos’ annual pay could reach up to $40 million (including $3 million salary, $20 million in stock, and a bonus of up to $17 million).
Executive pay has come more under scrutiny and Netflix executive pay packages last year garnered support from just 27% of shareholder votes, Reuters noted.
The strike of over 11,500 Hollywood film and TV writers represented by WGA started May 2, after weeks of contract negotiations with studios, represented by the Alliance of Motion Picture and Television Producers, reached an impasse. At the time AMPTP cited some of the main sticking points as mandatory staffing proposals and duration of employment requirements. WGA has cited an unprecedented decline in writers’ compensation and erosion of working conditions alongside the shift to streaming.
Speaking at an investor conference Thursday, AMC Networks CFO Patrick O’Connell acknowledged that writers are “the beating heart of our business,” but also suggested the strike happened at an inopportune time for writers in terms of leverage. Asked by analysts at the TD Cowen Annual TMT conference if the fact that the media industry “is in the crucible right now, from a P&L preceptive” if it’s made contract talks more fraught and difficult, AMC’s O’Connell responded with “a qualified yes.”
Still, he indicated that media companies and studios aren’t strongly incentivized to see it resolved immediately as they have a lot of content, and many are in the process of pulling back or reassessing content spending while looking for better economic returns.
“It’s just kind of unfortunate that you know there are contracts that come up at a period of time where the media companies are, frankly stocked with content. Our shelves are pretty full, for the most part others are as well,” O’Connell said.
“From a purely sort of outside and tactical perspective, it’s not a great time for them [writers] to be at the table, and there’s not an overwhelming need for us as a collective studio group to get a deal done tomorrow,” he said, adding there are puts and takes and that AMC had planned for a likely work stoppage as it scheduled its production slates going into the year.
“So it’s not a surprise, we have a full slate of content for the balance of this year in 2023 and into 2024,” O’Connell said, even if there are additional strikes among other guilds.
The AMPTP, representing streamers such as Netflix as well as Amazon, Apple, Disney, Warner Bros. Discovery, NBCUniversal, Paramount and Sony, is now negotiating with the Directors Guild, with that contract set to expire June 30.