Adjustments are coming to Netflix‘s government compensation packages.
In its Q3 earnings letter, Netflix says that it’s planning “substantial adjustments for 2024” to its CEO and government pay packages. The promise to buyers comes after shareholders rejected the corporate’s 2022 pay packages in a “Say on Pay” vote over the summer time.
In keeping with an SEC submitting, Netflix shareholders rejected the pay packages by a 3-1 margin, with 241.7 million voting no and solely 97.8 million voting sure. The vote was non-binding, however when shareholders reject the pay packages, corporations often reply by adjusting government compensation plans. Actually, Netflix handled this actual problem in 2019, one other yr when shareholders rejected its CEO pay.
“We acknowledge we don’t have vast assist for our government compensation mannequin of the final 20 years,” Netflix wrote Wednesday. Now, Netflix says it’ll shift its pay plans “to a extra typical mannequin.”
Co-CEO Ted Sarandos and former co-CEO Reed Hastings every took dwelling greater than $50 million in 2022, with Hastings taking nearly all of that in inventory, and Sarandos electing to have a $20 million base wage, with the remainder in inventory. After Greg Peters was elevated to co-CEO and Hastings stepped apart, the corporate set a wage cap of $3 million on its executives, shifting extra threat to inventory.
Netflix as an organization permits its workers to decide on how a lot of their pay they obtain in money, and the way a lot they obtain in inventory choices. For CEOs, nonetheless, many institutional buyers desire a comparatively low wage, with executives required to have “pores and skin within the sport” by way of performance-based inventory choices and bonuses.
The corporate says that its new government compensation plan, regardless of the particulars are, “will proceed to be constructed on pay for efficiency.”