Five of six shareholder proposals voted on at Netflix’s 2018 Annual Meeting, held on June 6th, which the board recommended voting AGAINST, received majority support. Due to the pre-existing supermajority bylaw, only four of the non-binding measures passed. With institutions owning 95% of outstanding shares, the most sizable shareholder proposal victory (according to the June 8th 8-K filing) was the 85% support to institute a simple majority vote standard for director nominations.
Three other prevailing shareholder resolutions, if enacted, would adopt proxy access (3% holders for three years to elect either two directors or up to a quarter of the board) and grant shareholder the right to act by written consent. Also, with 72% of the vote, investor groups with a 15% ownership stake may call special meetings (a provision not currently enacted). Currently, the average ownership threshold for this provision among S&P 500 companies is 25%.
Notably, the Say on Pay support declined from 96% in 2017, to 62% this year. This vote is in the wake of Netflix’s conversion of its performance-based incentives into cash salary. Average NEO total compensation jumped 8% on average from 2016 to 2017.