Netflix, Inc. (NASDAQ:NFLX) will not see a separation of the CEO and Chairman roles as investors have not supported the idea during the company’s annual general meeting, unlike last year when the proposal forwarded by New York City Comptroller Scott M. Stringer received huge support. Netflix management quite reluctant to raise the issue this time.
Shareholders support Hastings
As per the tally around 53% of the total votes were against the proposal, which is almost twice compared to the last year’s 27%. Netflix, Inc. (NASDAQ:NFLX)’s Reed Hastings gets to hold both the positions and was re-elected as a director with almost 74% of the votes. Apart from Stringer and Calpers, other two directors up for re-election were against the re-election of Hastings.
In a statement, Mr. Stringer said “Netflix is the latest company to twist the independent share vote into a referendum on the C.E.O. That’s unfortunate for Netflix and its shareowners.” He added that Hastings might be an awesome CEO, but should not continue as the chairman of the board to which he answers, reports Dealbook.NYTimes.
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There was a tremendous support last year for separating the two roles with backers such as shareholder advisory firms, Institutional Shareholder Services and Glass, Lewis & Company advising the investors to deny their vote to Mr. Hastings and other two directors.
Netflix doing well under Hastings
Both Stringer and Calpers hold a combined 350,000 shares, out of an estimated 60 million shares outstanding. Stringer must be disappointed after the results, as splitting up the roles would have improved corporate governance practices at Netflix, Inc. (NASDAQ:NFLX). If the chairman’s role is separated from the chief executive, it enhances the freedom of the board, assuring that management will not have too much influence on the board.
The online content streaming company believes a “one size fits all” approach is not right, but has helped the shares to soar an impressive 92% over the past 12 months. Netflix, Inc. (NASDAQ:NFLX) has an independent lead director; elected by the full board and not by the company’s other independent board members.
There was no comment from Netflix, Inc. (NASDAQ:NFLX) on the issue.