Netflix shareholders voted on Thursday to reject multi-million dollar pay packages for the company's top executives including for co-CEOs Ted Sarandos and Greg Peters.
The vote, which is non-binding, comes amid a strong bounceback for a company that lost more than half its value in 2022 as people started to venture out after years of pandemic isolation. Last year, consumers turned their back on price increases for streaming services like Netflix, and investors began to criticize the company for paying through the nose for content while customers were leaving. But Netflix's stock has rebounded 36% so far this year as shareholders believe the streaming sell-off may have been overdone.
Still, the vote took place just days after the Writers Guild of America encouraged investors to vote the packages down, saying in a letter that a vote would be inappropriate as Hollywood writers enter their fifth week of striking for better working conditions and larger contracts.
"While investors have long taken issue with Netflix's executive pay, the compensation structure is more egregious against the backdrop of the strike," wrote WGA West president Meredith Stiehm in the letter to the company's shareholders.
If Netflix can afford to spend an estimated $166 million on executive compensation, she wrote, it should also be able to pay the estimated $68 million that writers are seeking in their contract negotiations.
The Writers Guild of America has targeted high executive compensation as a key issue in its ongoing bargaining tactics. The union sent a similar letter about pay proposals to NBCUniversal parent Comcast, which will hold its annual shareholder meeting next week.
Netflix's proposed executive pay packages for 2023 included up to $40 million for Sarandos, including base salary, a performance bonus and stock options. Peters could receive up to $34.6 million.
Reed Hastings, who stepped down as Netflix CEO in January and now serves as the company's executive chairman, would bring home about $3 million for the year.
Other Netflix executives are expecting big payouts in 2023. According to the proposal, Netflix CFO Spencer Neumann would receive $14 million, chief legal officer David Hyman would get $11 million and chief communications officer Rachel Whetstone is on track to receive $6.5 million.
The median Netflix employee made $218,400 in 2022, according to a Securities and Exchange Commission filing. That would make the ratio of CEO pay to median employee pay 234 to 1.
Netflix's board, meanwhile, is able to disregard the results of this "say on pay" vote and approve executive compensation plans in spite of shareholder wishes. The board has already unanimously recommended voting for the pay packages.
Last year, just 27% of Netflix shareholders approved of 2022 executive compensation packages. The final tally from this year's meeting has yet to be released.