Netflix Chief Executive Reed Hastings received about $5.5 million in
total compensation last year, a 40% drop from 2011, when his package was valued
at $9.3 million.
Hastings also realized a gain of about $8.4 million last year from the exercise
of prior years' option grants, according to regulatory filings.
Chief Content Officer Ted Sarandos, the architect of Netflix's original content
strategy and recently named to Time's list of 100 most influential people, was
the most highly compensated executive last year.
Sarandos received salary and stock options worth about $6.5 million in 2012. His
annual wage is set to double to $2.2 million this year, with a stock option
allowance rise to $2 million.
The digital media powerhouse doesn't come close to its old-media counterparts,
when it comes to executive compensation. CBS Chief Executive Les Moonves had a
2012 pay package valued at $62.2 million.
Nonetheless, Netflix will ask shareholders to adopt a proposal that would give
them a nonbinding say in executive pay. Stockholders also submitted five
proposals for investors to consider.
One shareholder resolution, submitted by the Florida State Board of
Administration, would require all Netflix directors to stand for election
annually. It argued that such a move would make the Netflix board more
accountable to investors. The Netflix board recommends against the proposal,
saying that the staggered terms provide greater stability.
The California State Teachers' Retirement System proposed that director nominees
be elected by a majority vote --instead of a plurality -- in uncontested
elections. It argues that the current standard "disenfranchises" shareholders.
Netflix directors advised maintaining the status quo to avoid "failed" elections
that would result in unfilled board vacancies.
Another shareholder resolution, put forth by the New York City Pension Funds,
would require an independent board chairman who is not a current or former
Netflix employee, arguing it would enhance the board's oversight of management.
The chairman's position is currently held by Hastings, the company's president
and chief executive. The Netflix board advised rejecting the proposal, saying
that the chief executive is best suited to serve as board chairman because he's
most familiar with the company's business and best able to identify strategic
priorities.
One proxy measure seeks to change the corporate governance rules to allow
shareholders to make board nominations. The Netflix board opposed the measure,
saying its nominating committee is in the best position to propose candidates.
The company's annual meeting will be held June 7 at the company's headquarters
in Los Gatos.
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