Netflix to Hold Shareholder Meeting June 321 Apr, 2011 By: Erik Gruenwedel
CEO Reed Hastings up for board re-election
Netflix scheduled its annual shareholder meeting for June 3 at the online disc rental pioneer’s headquarters in Los Gatos, Calif.
Agenda items include the election of three board members, approval of a shareholder rights plan and non-binding advisory voting on executive compensation, among others. The latter has become a trend among some publicly held companies seeking to offer transparency regarding the often contentious issue of executive salaries and stock options.
The Securities and Exchange Commission in January ruled that companies must allow shareholder voting on executive compensation at least once every three years. Companies, however, do not have to abide by how shareholders vote, thus making the entire process largely a PR gimmick.
Along with CEO Reed Hastings, other board nominees include incumbents Jay Hoag and George (Skip) Battle, both investors. All are expected to be reaffirmed.
Noteworthy among compensation items is the 2011 stock plan that awards executives, consultants and select employees shares of restricted stock and other options as incentives. As of April 5, about 893 Netflix employees were eligible to participate in the plan.
With Netflix a runaway success since its launch in 1999, and shares hovering near record highs ($246 per share), the stock-based awards and options can be very lucrative.
For example, co-founder Hastings is eligible to receive 96,934 shares at an exercise (purchase) price of $98.86 per share. Hastings currently owns more than 2.8 million shares (5.21%) of Netflix stock. He is only the second-largest shareholder following investment group FMR LLC, which holds more than 4.2 million shares, or 8% of the company.
Neil Hunt, chief product officer, is eligible for 22,428 shares at $95.97 per share; Leslie Kilgore, chief marketing officer, 40,386 shares (at $95.69 per share); and Ted Sarandos, chief content officer, 27,522 shares at ($101.43 per share).
Hunt owns more than 111,000 Netflix shares, while Kilgore holds 88,600 shares and Sarandos owns more than 61,400 shares.
New CFO David Wells (who replaced Barry McCarthy last year) is eligible for 2,942 shares at $100.20 per share. All other eligible employees as a group can purchase 490,762 shares at $100.27 per share.
Netflix will release first-quarter results after the market close April 25.