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Governance

Netflix investors, once again, seek change in proxy access, voting rules

Netflix Inc. investors, for another year, passed shareholder proposals calling for proxy access and the elimination of supermajority voting provisions at the company's annual meeting.

Fifty-eight percent and 85% of shareholder votes, respectively, were cast in favor of the non-binding proxy access and voting provisions at the company's annual meeting June 6, up from 54% and 63% last year, Netflix said in an 8-K filed June 8.

The $194 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 $224.8 billion California State Teachers' Retirement System, West Sacramento, filed the voting provisions proposal, which called for the company to eliminate each voting requirement in its charter and bylaws that calls for a greater than simple majority vote such as shareholders' ability to amend portions of bylaws related to director elections, qualifications and removal. In 2013, 2015 and 2016, this proposal was supported by more than 80% of investor votes, CalSTRS said in Netflix's 2018 proxy statement.

Along with CalSTRS and the New York City Retirement Systems, the $352.8 billion California Public Employees' Retirement System, Sacramento; C$356.1 billion ($274.4 billion) Canada Pension Plan Investment Board, Toronto; $204.9 billion Florida State Board of Administration, Tallahassee; and $146 billion Texas Teacher Retirement System, Austin, supported both proposals.

Additionally, all six pension funds voted in favor of another pension-fund led shareholder proposal that called for the adoption of an executive compensation clawback policy and against Netflix's executive compensation program.

Ultimately, a majority of investors rejected the clawback proposal — which was filed by the $4.8 billion Philadelphia Public Employees Retirement System — and approved the company's executive compensation program; 61% of shareholder votes supported the compensation program.

All six pension funds also withheld their votes on the re-election of three of the four directors up for election — Richard N. Barton, Bradford L. Smith and Anne M. Sweeney. The three directors were re-elected by a majority of investors with support levels ranging from 54% to 62% with Mr. Barton receiving the lowest level of support.

A Netflix spokesman could not immediately be reached for comment.