Netflix Shareholders Overwhelmingly
Support Corporate Governance Reforms
By David Lieberman
June 7, 2013
Investors rarely reject management’s views on such matters, especially at a time when a company’s stock is soaring.
Yet despite the 250% increase in Netflix‘s price during the past 12 months, shareholders today resoundingly supported several changes to democratize the way the company is run. A motion to repeal the classified board — where the seven directors serve multiyear terms, and only a few are up for re-election each year — won with 88.4% support. [EXPAND Read more]
More than 80% said that uncontested board candidates should only be elected if they win a majority of the vote. A similar number want shareholder motions to pass with a majority vote — ending requirements for a supermajority. And 73% want Netflix’s chairman to be an independent director, which would mean that Reed Hastings couldn’t be both CEO and chairman.The votes are all advisory, and there’s no guarantee that the shareholders will get what they want. “The board believes its corporate posture is an appropriate one and will assess today’s votes within that context,” spokesman Jonathan Friedland says.
In addition to the votes to change Netflix’s governance practices, shareholders gave just tepid support to the three Netflix board members up for election this year. One, former Chief Marketing Officer Leslie Kilgore, was elected without a majority of the votes cast: She was supported by holders of 19.85M shares while 19.95M withheld their vote.
The other two barely won with a majority. Former Pixar CFO Ann Mather was supported by 20.58M with 19.22M withholding. And Redpoint Ventures Managing Director Timothy Haley came in with 20.60M favoring and 19.21M withholding. The outcome of the election wasn’t in doubt: There were only three nominees for the three seats. [/EXPAND]