Shareholders of streaming service Netflix have rejected a proposal that set the amount of money the company’s top executives would have earned this year.
The vote came at the urging of the Writers Guild of America (WGA), which is currently on strike and described the proposal as inappropriate while its creative force is not working.
The proposal would have seen Netflix co-CEO Ted Sarandos earn up to $40 million this year, while his executive partner, Greg Peters, would have earned up to $34.6 million. Reed Hastings, Netflix’s founder and former CEO, will earn $3 million.
In a statement, a spokesperson for the western branch of the WGA noted investors were typically weary of approving pay packages for Netflix executives, but the proposed packages put forth this year were “even more egregious against the backdrop of the strike.”
“Netflix’s content pipeline has been blocked, with dozens of projects that were in development or ordered to series as of May 1st unable to move forward until WGA negotiations conclude,” the spokesperson, WGA Western President Meredith Stiehm, said. “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.”
Some shareholders likely voted on the executive pay packages before Stiehm’s statement. Certain votes might not have been linked to the WGA strike, and many have been a signal of disapproval over how executives at Netflix have steered the company over the last few years.
Netflix has lost some of its most-watched content — including re-runs of “Friends” and “The Office” — as media giants like Comcast’s NBC Universal, Warner Bros Discovery and Paramount Global spin up their own streaming services. Netflix has tried to rebound by injecting tens of billions of dollars in new production studios, back lots and the development of original series, but has not had much to show for those efforts.
Last year, Netflix grabbed headlines when the company reported a dip in global paying subscribers for the first time ever, a trend that continued for at least two consecutive quarters. The trend was reversed later in the year, in large part because the company made advances in grabbing more subscribers in overseas markets. Its domestic operation continues to lose customers.
Recently, Netflix said it will broaden its crackdown on freeloading streamers who borrow a password from a paying customer to watch its content, a practice that the company once embraced. The crackdown comes amid a similar strategy in Latin America — one that cost Netflix subscribers during its full financial quarter of the strategy.
Executives say Netflix is likely to see subscriber losses in the United States, Canada, Australia and other parts of the world where it is now clamping down on freeloaders, but says the short-term pain will eventually yield long-term benefits for its business.