Netflix shareholders aren’t okay with the amount of money the company is spending on its senior executives: A slim majority of shareholders voted down the company’s executive officer compensation plan at its most recent shareholder meeting last week, Netflix revealed in a regulatory filing Wednesday.
“The Board will consider the results and act in what it believes to be the best interest of shareholders,” a Netflix spokesperson told Variety Wednesday.
Altogether, 158,660,749 votes were cast against the company’s proposal, while 158,469,887 votes supported Netflix’s compensation plans — a difference of just 190,862 votes. The vote is non-binding, so Netflix execs will likely still get the paycheck they were promised for 2019.
Late last year, Netflix revealed plans to pay its CEO Reed Hastings and its chief content officer Ted Sarandos around $31.5 million in combined salary and stock option grants. This represents an increase of 7% for Hastings, while Sarandos saw his compensation go up by 20%.
The compensation of chief product officer Greg Peters grew from a combined $12.6 million in 2018 to $16.8 million in cash and stock options in 2019, while the company’s new chief financial officer Spencer Neumann is going to receive roughly twice as much in cash and stock in 2019 as its predecessor David Wells did in 2018.
Netflix justified its executive compensation by telling shareholders that it was “designed to attract and retain outstanding performers,” and tailored to each position and executives’ performance, as opposed to the overall performance of the company.
It is not uncommon for shareholders to vote against company proposals or recommendations, and companies frequently structure their corporate governance in ways that make these votes all but inconsequential. To change this, Netflix shareholders have for years voted to allow for simple majority votes on corporate matters. Last week, the same proposal won once again by a wide margin. And just like in previous years, Netflix is likely going to ignore the result of that non-binding vote.
Netflix shareholders have frequently protested such moves by withholding votes from board members. Last week, they withheld the majority of votes from each of the four board candidates up for election. Since all four were running unopposed, they still all got their board seat. Netflix did change its bylaws in April to make it easier for shareholders to nominate their own candidates.
The disapproval of the company’s executive compensation plans is still notable, because shareholders were happy to approve the checks written to executives in years past. In 2018, shareholders approved of the company’s compensation plans with 61% of their votes. In previous years, those approval ratings were even higher.