Netflix (NFLX) shareholders rejected a multi-million dollar executive compensation package on Thursday that includes the pay of co-CEOs Ted Sarandos and Greg Peters. The company spent an estimated $166 million on its executive pay package last year.
The non-binding vote comes against the backdrop of the Hollywood writers' strike as members of the Writers Guild of America (WGA) encouraged shareholders to vote against the package earlier this week.
"While investors have long taken issue with Netflix’s executive pay, the compensation structure is more egregious against the backdrop of the strike," WGA West president Meredith Stiehm wrote in a letter to Netflix shareholders. A similar letter was sent to Comcast (CMCSA), the parent company of NBCUniversal, ahead of its annual shareholder meeting next week.
According to the proposal, Sarandos' 2023 pay package would include up to $40 million in base salary, coupled with performance bonuses and stock options. Peters, who was named co-CEO earlier this year after Reed Hastings stepped down from the position, would receive up to $34.6 million.
Hastings, who now serves as Netflix's executive chairman, would earn about $3 million for the year.
In a lengthy Twitter thread posted on Thursday, the union wrote the package, "could pay for Netflix’s annual share of all of WGA’s proposed improvements for writers—twice over."
"It is rare that these shareholder proposals fail—less than 4% executive compensation shareholder proposals failed in 2022. It’s clear that investors don't believe this management team is worth $160+ million a year," the WGA continued, adding: "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.'"
Hollywood writers began a strike on May 2 in protest of higher wages and other demands amid the streaming boom. That set off a production shutdown across the entire industry.
The WGA had been negotiating with the Alliance of Motion Picture and Television Producers (AMPTP), which bargains on behalf of studios including Netflix, Amazon, Apple, Disney, Warner Bros. Discovery NBCUniversal, Paramount, and Sony.
Moody's has warned that some media companies could see credit ratings suffer as a result of the strike.
Netflix will meet with its board to discuss the pay package following the failed vote; however, the board could still approve the plans despite the disapproval from shareholders.
Shares of the streaming platform have been booming recently. Netflix was able to eke out a nearly 20% gain as it rolled out its password-sharing crackdown, a key revenue driver, in the US and beyond, in addition to positive data surrounding its ad-supported tier.
The stock is up more than 35% year-to-date compared to the S&P 500's roughly 10% gain.