April 23, 2018
Life is good for Ted Sarandos, chief content officer at Netflix. The long-time executive saw his 2018 annual salary balloon to $12 million from $1 million in 2017, excluding stock options, according to a regulatory filing.
Chief Product Officer Greg Peters’ salary increased to $6 million from $1 million, while CFO David Wells received a $300,000 pay raise to $2.8 million.
The pay raises (which count as corporate taxable income) reflect changes to executive compensation following passage of President Trump’s tax overhaul.
Netflix’s board scrapped executive bonuses at the end of 2017 and now pays straight salary to executives as bonuses are no longer deductible under the new corporate tax structure.
Notably, general counsel David Hyman and co-founder/CEO Reed Hastings received “pay cuts” to $2.5 million and $700,000, respectively. Hyman and Hastings were paid $3.3 million and $850,000, respectively in 2017, excluding stock options and bonuses.
Shed no tears for Hastings. The billionaire is slated to receive $28.7 million in stock options in 2018, up from $21 million in 2017.
Separately, Netflix’s board is facing a number of shareholder proposals critical of how the board operates.
Specifically, the board suggests shareholders reject proposals that would enable shareholders (with minimum 15% equity stake) to call for special shareholder meetings; adopt a “proxy access” bylaw that would allow shareholders to directly nominate board members; and enact a “claw-back policy” affording shareholders the legal clout to recoup executive incentive pay.
The board is also against a shareholder proposal allowing written consent against board nominees. The proposal argues shareholders should have the right to directly vote against any board nominee getting a high percentage (48%) of negative votes.
Netflix is also against allowing shareholders to vote on proposals by simple majority and amend the company’s bylaws to majority vote from “a plurality of shares voted.” The proposal argues that existing bylaws have enabled Netflix’s board to remain unchanged.
“Half of Netflix’s independent directors have tenures of at least 12 years and the board lacks racial diversity,” read the proposal.
Netflix in late March named Susan E. Rice, a former U.S. National Security Advisor and Ambassador to the United Nations under President Obama, to its board of directors.