It appears as though Netflix investors have renewed faith in Reed Hastings.
After watching Netflix blow past subscriber goals, accumulate critical and commercial accolades for its original programming, and grow its share price by more than 300% last year — making it the biggest gainer in the S&P 500 and Nasdaq 100 – investors rewarded Hastings on Monday by voting to allow him to continue holding both the chairman and chief executives titles at the company.
According to preliminary results, 53% of Netflix investors voting against the proposal to separate the chairman and CEO roles, almost double the amount that voted against it last year.
The move to separate Hastings from one of his titles was led by New York City Comptroller Scott M. Stringer and California public pension fund Calpers. It was supported by both proxy advisory firms Institutional Shareholder Services and Glass, Lewis. The proposal was the latest attempt by investors to preclude one executive from holding both the chairman and CEO role, which could led to undue influence over a company's operations and strategic direction. However, though the issue has gained momentum in corporate governance circles, it hasn't resulted in many wins when it comes time to vote. News Corp's Rupert Murdoch and JPMorgan's Jaimie Dimon, among others, have beaten back similar attempts by investors to separate the chairman and CEO roles at their respective companies.
For Stringer and Calpers, the window for success at Netflix basically closed after the company's flawless 2013. Two years ago, or even last year, after Netflix's poorly received plan to separate its DVD-by-mail and streaming business into two companies — one called Qwikster — and raise subscription prices sent its share price tumbling and prompted takeover rumors a case against Hastings holding both titles was more viable. Indeed, last year 73% of Netflix investors supported the separation proposal, which the company ultimately ignored. This year, however, that figure fell to just 47%.
Netflix shares closed trading Monday down $7.04 to $423.09.