A move to split the CEO and chairman positions at Netflix (NASDAQ: NFLX) was defeated Monday as just over half of the SVOD provider's shareholders voted against a proposal to keep Reed Hastings as CEO but replace him on the board with a member who is not a current or former employee of the company.
According to The Wall Street Journal, 53 percent of shareholders voted against the nonbinding resolution.
The defeat is a telling sign that Netflix's investors are pleased with the company's recovery from a near-disastrous 2011 attempt to split up its streaming and DVD-rental services, and its continuing dominance of the online-video market.
Confidence in Hastings hasn't always been so high. Last year, 73 percent of shareholders voted in favor of splitting up the chairman and CEO roles in a similar nonbinding resolution. However, the board took no action.
Over the past 12 months, Netflix shares have soared 91 percent, opening Tuesday at $425.52.
The latest proposal to split the positions was led by two investors: Scott M. Stringer, New York City's comptroller and pension-fund manager, and Calpers, which is California's public pension fund. Glass, Lewis and Company and Institutional Shareholder Services backed the proposal.
Stringer, Calpers and their supporters are following along a trend path tread by other investors and advisory firms that are pressuring U.S. companies to separate the CEO from board leadership. The belief is that combining the two could create conflicts of interest.
"Netflix is the latest company to twist the independent chair vote into a referendum on the CEO," Stringer told WSJ. "Reed Hastings may be a terrific CEO, but he shouldn't also chair the board to which he answers."
For more:
- The Wall Street Journal has this story
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