Netflix has promised to make “substantial changes” to its executive pay model after significant shareholder pushback regarding the sizable pay packages.
“We recognize we don’t have wide support for our executive compensation model of the last 20 years. We are listening to our shareholders and plan on substantial changes for 2024 to a more conventional model,” Netflix said in its third quarter earnings statement. “Our executive compensation plan will continue to be built on pay for performance.”
The commitment to switch up the compensation model comes months after the company’s shareholders rejected the streamer’s $166 million executive pay package in June. Only 25.7% of shareholders approved the package, which included salaries for co-CEO Ted Sarandos, former co-CEO Reed Hastings and Greg Peters, who was elevated from COO to co-CEO. While the vote is nonbinding and serves a purely advisory function, it marked a rare dissent among similar “Say on Pay” proposals.
In 2022, Hastings’ total compensation stacked up to $51.1 million while Sarandos brought in $50.3 million and Peters received $28.1 million.
Prior to the June vote, shareholders received pressure to reject the pay package after WGA West president Meredith Stiehm sent an open letter to Netflix and Comcast shareholders urging them to reject the packages in the impending vote as the writers guild entered into its second month of striking.
“Netflix’s content pipeline has been blocked, with dozens of projects that were in development or ordered to series as of May 1 unable to move forward until WGA negotiations conclude,” Stiehm wrote in the letter to Netflix shareholders. “A delay in the writing, production, and release of new content may impact Netflix’s ability to attract and retain subscribers and viewers just as the company asks customers to watch advertising and pay more for its content.”
After news broke that shareholders did, in fact, reject the pay package, the guild noted on social media that the “excessive sum” could be used for “Netflix’s annual share of all of WGA’s proposed improvements for writers — twice over.”
“Instead, this money paid the top Netflix execs who are creating risk for the company and shareholders by not offering writers a fair deal,” the WGA wrote in statement posted to Twitter. “Netflix’s board needs to spend less time thinking up ways to pay its executive team more money and instead address the writers’ strike that is delaying major shows like ‘Stranger Things.’”
