Netflix shareholders withhold support for executive pay package

FILE PHOTO: Smartphone with Netflix logo is placed on a keyboard in this illustration taken April 19, 2022. REUTERS/Dado Ruvic

(Reuters) - Netflix Inc shareholders on Thursday withheld their support for the company's executive pay package, in a non-binding vote that followed a call by striking Hollywood writers to reject the proposed 2023 compensation.

The Writers Guild of America West had urged investors to vote against the compensation offered to Netflix's top executives, arguing such a vote would be "inappropriate" during the strike, which has entered its fifth week.

"While investors have long taken issue with Netflix's executive pay, the compensation structure is more egregious against the backdrop of the strike," wrote Writers Guild West President Meredith Stiehm.

The union sent a similar letter to NBCUniversal parent Comcast Corp, which holds its annual shareholder meeting on June 7.

Stiehm wrote that if Netflix had the resources to spend more than $166 million on executive compensation last year for its top executives, it can afford to pay $68 million a year to writers seeking in better compensation.

Netflix shareholders withheld support for the executive compensation structure for 2023, in a non-binding "say on pay" vote. The company said the vote tally would be reported in a regulatory filing. Last year, the company's executive pay package won support from just 27% of the shareholder votes cast.

After last year's vote, Netflix said it made changes including instituting a salary cap for its co-chief executives and a performance-based bonus plan.

This year, Executive Chairman Reed Hastings is set to receive a $500,000 salary and $2.5 million in stock. Co-CEOs Ted Sarandos and Greg Peters will each collect an annual salary of $3 million. Sarandos stands to receive an additional $20 million in stock, and is eligible for a bonus of up to $17 million. Peters will collect $17.3 million in stock and a bonus of up to $14.3 million.

The union has made executive compensation for Hollywood executives an issue in negotiation. Endeavor CEO Ari Emanuel and Warner Bros Discovery CEO David Zaslav ranked in the top 10 of Equilar's 2022 study of the largest pay packages awarded to chief executives of publicly traded companies.

The union has been applying pressure on media companies to coax them back to the bargaining table. Contract talks ended on May 1, after they reached an impasse over improved pay and residuals and changes in working conditions. The use of artificial intelligence is another stumbling block.

The Alliance of Motion Picture and Television Producers, which is representing streamers like Netflix and the studios in negotiations, is currently in talks with the Directors Guild, whose current contract expires on June 30. Talks begin on June 7 with SAG-AFTRA, which represents actors.

(Reporting by Dawn Chmielewski in Los Angeles; Editing by David Gregorio and Christopher Cushing)

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