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GOVERNANCE

Netflix shareholders approve proposals on proxy access, annual director elections

Shareholder proposals calling for proxy access and annual director elections were supported by a majority of shareholders at Netflix Inc.'s annual meeting.

Some 54% and 63% of shareholders voted in favor of the non-binding proxy access and annual election proposals, respectively, on June 6, Netflix disclosed in an SEC filing June 9.

On the flip side, proposals calling for a sustainability report and a greenhouse gas emissions report were defeated with only 29% and 16% of shareholders voting in support, respectively.

The $170.6 billion New York City Retirement Systems filed the proxy-access proposal, which would enable a shareholder or a group of shareholders that hold a combined 3% of the company's shares for three years to nominate up to two directors or 25% of the board.

The sustainability disclosure proposal was filed by Thomas P. DiNapoli, New York state comptroller and sole trustee of the $192 billion New York State Common Retirement Fund, Albany, and called for Netflix to issue an annual report on the company's short- and long-term responses to environmental, social and governance issues.

The $323.9 billion California Public Employees' Retirement System, Sacramento; $189.4 billion Florida State Board of Administration, Tallahassee; C$316.7 billion ($235.1 billion) Canada Pension Plan Investment Board, Toronto; and $133.2 billion Texas Teacher Retirement System, Austin, supported the proxy access, annual election, sustainability and greenhouse gas reporting proposals, according to their proxy-voting disclosures,

The $206.5 billion California State Teachers' Retirement System, West Sacramento, supported the proposals for proxy access, a sustainability report and annual director elections. It did not support the greenhouse gas proposal.

Additionally, all five entities withheld their votes on the re-election of Netflix's three named directors. The Florida State Board of Administration noted in its proxy-voting disclosures that it voted against the re-election of CEO Reed Hastings and Jay C. Hoag for being unresponsive to previous shareholder proposals that received majority support like proxy access and annual director election proposals. The state board said that it voted against the remaining director up for re-election, A. George Battle, because he serves on more than three boards.

Despite the pension funds' opposition, each of the named directors were re-elected on June 6. The percentage of votes in favor ranged from 51.4% to 70.4%.