Tonight in schadenfreude: Netflix bosses get their pay requests rejected, for once
Netflix shareholders made a rare move to reject multi-million compensation packages for its founder and CEOs,
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Tonight in “unexpected comeuppance” news: The guys running Netflix got their knuckles rapped pretty hard this evening, as THR reports that shareholders for the company have taken a rare step and rejected a proposed compensation package for the streamer’s top dogs. Although the shareholder vote, which happened earlier tonight, isn’t binding, it is a pretty potent “Hold the fuck up” to Ted Sarandos, Reed Hastings, and recently installed co-CEO Greg Peters, presumably over the trio’s handling of the WGA’s ongoing writers strike.
It’s not new to note that the men running Netflix make frankly ludicrous sums of money, especially as compared to the people who actually make the films and shows that power the streamer’s success: Co-founder Hastings made roughly $50 million last year in salary and stocks, while Sarandos was expected to make some $40 million in 2023. (Peters, who spearheaded the company’s recent ad-supported tier, and who took Hasting’s old spot at the top last year, was set to make roughly $34 million.) All of which makes for pretty terrible optics as the company wrestles with heavy criticisms of its treatment of creators. The rise of streaming, and the subsequent fall of residuals for writers a) has been a major economic shift in the world of TV writing over the last decade, and b) started, at least in part, at Netflix—and so addressing it is just one of the reasons the WGA is currently on strike.
And making waves: The shareholder vote comes after the WGA issued a request to do exactly this to the company’s shareholders earlier this week, with union president Meredith Stiehm noting that “while investors have long taken issue with Netflix’s executive pay, the compensation structure is even more egregious against the backdrop of the strike.” The voters seem to have agreed.
And, like we said: Hastings, Sarandos, and Peters could just ignore this vote and go on paying themselves their big fat paychecks, but they probably won’t; company leadership previously responded pretty attentively to a similar “no” vote back in 2019. Meanwhile, the WGA has issued a similar request to Comcast’s shareholders ahead of a vote next week; it remains to be seen how screwing with executive-level money will affect the attitudes of the various studio heads as the strike continues—but we can’t imagine it’ll hurt.
18 Comments
Down with corporate greed! 👍
I wonder how influential the WGA’s request was, given that it came so close to the vote (The linked Hollywood Reporter story notes that many shareholders would have already voted by the time the request was made). If anything, I would say maybe some shareholders used the strike as cover to vote against the compensation, but there are plenty of other reasons for the shareholders to balk at the pay packages. Shareholders generally aren’t activists and they don’t vote that way. They’re capitalists. They vote for what will make them more money, or they vote against things they think will cost them money. I don’t think they give two shits about the writer’s strike. I think they care about the company’s numbers. Netflix isn’t in a period of particularly good optics right now. They lost about 200,000 North American subscriptions in Q1 2023 compared to a year ago. The crackdown on passwords has been really bad PR, and it remains to be seen if it will goose revenue like the C-suite says it will. I suspect the effect of the password crackdown will be negligible when it comes to revenue.My guess: The vote is kind of like the streaming wars’ version of the Shock Doctrine. Never let a good crisis go to waste. If the shareholders can use the crisis of the strike to claw back some of the compensation that they deem excessive, they’re damn sure going to do it.
Nah. They gained about 100k in Q1 2023 from the US-Canada region thanks to their ad-supported plan. What is concerning is the downturn in Latin America where they lost over 400k in one quarter. A region that has been pretty stable for a while until now. Maybe a consequence of the password crackdown? Seeing as some markets got the change earlier than others.All of this is compensated and then some thanks their growth in the Asian markets.Don’t know how the new password sharing policy change will affect their bottom line, so we’ll have to wait for the Q2 earnings.
I don’t know when they last voted on this, but the stock has doubled in the last 12 months and $400 is right around where it peaked a few times in the years before it shot up to $600, which probably wasn’t rational.Like you said, losing this sort of vote is pretty uncommon. Most people probably don’t even bother sending in their proxy
… Haha!
Ha! Nice.
Fucking hire me, Netflix. I can make similar terrible decisions at a way lower salary. In all seriousness, it feels weird to offer kudos to the shareholders for sending a message about something that seems like an obvious, bare minimum move but I offer them nonetheless.
“Fucking hire me, Netflix. I can make similar terrible decisions at a way lower salary.”
Yep, that’s netflix: allllllll terrible decisions.
Considering most CEO’s in America make something like 300-400 times what the employees make, and that disparity has only been increasing over time, small steps like this shareholder vote are good, even if they’re largely symbolic.I.e. I seriously doubt Mr. Hastings et al have any concerns about making rent this year. Or ever. Perhaps unlike some of the employees they laid off last year.Symbolism aside, I seriously doubt any CEO today is realistically worth literally 100’s of their employees. And furthermore, since some of them are lately flushing their company down the proverbial crapper, it’s appalling that large (particularly institutional) shareholders (and predatory “activist investors”) stand for this kind of gross salary imbalance.But I suppose the most wealthy of the wealthiest look after their own.
Yes, I know.
Maybe they should get second jobs to make ends meet. Are they only at those jobs for the money? That’s a red flag. We’re a family here, everyone needs to make sacrifices. Kids these days don’t understand hard work.
Good.
“Dammit. Now I can only buy 3 yachts this year!”
I know corporations have always been greedy, but the last 10 and 20 years it feels like it’s getting really out of hand. Or is that because I’m getting much older?
Funny enough, their original DVD mailing business model would have been perfect to get people through a writers’ strike. They would be bankrupt in these days, but it’s still funny to think about.
So someone convince me that Netflix would not be run as well or better by someone making $3-5 million and that is would be a mess unless the top people make 30-50 million.
They’re definitely being paid too much, but I don’t think you could find someone to do it for such a lower amount.There are very few Kevin Feiges or Brandon Tartikoffs, who have a real vision for this kind of thing. Most CEOs are just money guys who got into something that was profitable.You might be able to find a guy who’s passionate about what he’s doing who will start lower because he just wants the job, but it’s unlikely unless you’re taking a chance on an unknown. You’ll more likely get a money guy trying to get his foot in the door who will ask for a raise or jump ship to another service that will pay him more.Once you become a big time CEO, you start to meet a lot of other big time CEOs. And if you’re making a whole lot less than them, you start to wonder why, especially if you’re doing a really good job. So even if you are passionate about what you’re doing, you start to resent the fact that you’re being undervalued.I bet you could find a guy who’s good at the job and doesn’t care about the money, but sooner or later he’s gonna bet on something that may be artistically satisfying, but doesn’t make a lot of money, or even loses money. At that point, you might as well find another cheap guy who isn’t helping the board make more money.
This is a bit of generalization, but many executives get their compensation primarily determined by a board of owners. It’s fairly common for current/ex/future executives to move in & out of those board positions. Therefore, it is in the best interest of said ownership group to pay the executives as much as possible in order to keep growing the floor for if/when they get in that spot. It would require either legal action or some magical growth in altruism in order for any of these companies to start cutting compensation by 90%, even though it almost certainly wouldn’t hurt macro output.