Writers Guild Targets Executive Pay in Letters to Netflix, Comcast Shareholders

Alex Weprin
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The Writers Guild of America is taking its attack on over-the-top corporate executive pay from the picket lines to the board rooms.

On Tuesday, WGA West president Meredith Stiehm sent letters to major shareholders of Netflix and NBCUniversal owner Comcast, urging them to vote against each company’s “Say on Pay” proposal, which asks shareholders to sign off on those company’s prior-year pay packages at their respective annual meetings.

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As The Hollywood Reporter noted in its annual tally of Hollywood CEO pay, while compensation was generally down in 2022 from 2021 (with some exceptions), top entertainment execs still earned substantial pay packages, and the optics are bad given the strike and the continued cost-cutting across the industry.

Comcast CEO Brian Roberts received a pay package valued at more than $32 million last year. Former NBCUniversal CEO Jeff Shell, meanwhile, had to forfeit some $43 million in compensation after being let go for cause by the company for “inappropriate conduct with a female employee, including allegations of sexual harassment.”

At Netflix, co-CEO Ted Sarandos and former co-CEO Reed Hastings saw their pay packages top $50 million in 2022, up from 2021.

Comcast’s annual meeting is set for June 7, while Netflix will hold its meeting June 1.

In the letters (which the guild said were sent to “shareholders representing a majority” of shares in each company), Stiehm noted the disparity in what top executives were paid versus what a deal would mean for the writers who create their programming.

“Approval of this compensation package is inappropriate in light of the ongoing WGA writers’ strike and the associated risks that Comcast executives are creating for investors,” Stiehm wrote to Comcast shareholders. “Shareholders should send a message to Comcast that if the company could afford to spend $130 million on executive compensation last year, it can afford to pay the estimated $34 million per year that writers are asking for in contract improvements and put an end to this disruptive strike.”

She struck a similar note with Netflix (albeit with different numbers: The WGA estimates Netflix would pay writers $68 million per year, twice what Comcast would).

She also noted the disruptions to production, and what it could mean for the bottom line of the companies.

“Netflix’s content pipeline has been blocked, with dozens of projects that were in development or ordered to series as of May 1st unable to move forward until WGA negotiations conclude,” Stiehm wrote to Netflix shareholders. “A delay in the writing, production, and release of new content may impact Netflix’s ability to attract and retain subscribers and viewers just as the company asks customers to watch advertising and pay more for its content.”

“The strike’s impact on Comcast’s broadcast lineup has a knock-on effect for its streaming business which relies on a steady flow of new broadcast episodes to populate its platform the day after episodes air on TV,” she added in her letter to Comcast shareholders. “In fact, Peacock gets roughly twice as many new scripted, WGA-covered episodes from in-season NBC content as it does from Peacock’s originals slate.”

As the strike drags on into the summer, the guild is trying to use every lever it can ratchet up pressure on the studios, moving beyond picket lines and press availabilities to efforts to shut down active productions that have completed scripts, and now corporate shareholder activism.

Of course, many of the companies that are impacted by the writers strike have already held their annual meetings, including Paramount, Disney, Warner Bros. Discovery (where CEO David Zaslav’s 2021 compensation has been a particularly popular subject for WGA picket signs), Apple and Amazon.

And it is worth noting that Say on Pay proposals rarely succeed in passing and are nonbinding even if they do.

That being said, they do sometimes have an impact.

In 2018, Disney shareholders rejected a compensation plan for CEO Bob Iger, and the company responded by changing its compensation structure to more closely align his pay to the company’s performance.

And Netflix shareholders in 2019 rejected the company’s Say on Pay proposal, and the company since then has made changes to its corporate governance to be more responsive to shareholder concerns.

“While investors have long taken issue with Netflix’s executive pay, the compensation structure is even more egregious against the backdrop of the strike,” Stiehm wrote in her letter.

While the letters come quite late in the proxy process (it’s possible many of the institutional shareholders the guild is reaching out to have already voted), it is also a sign that the union will seek to leverage whatever tool is available in its pressure campaign. While a successful campaign may not get negotiators back to the table, it would still send a message, however much of a long-shot it may be.

Read the letters below.

Netflix:

Re: Vote Against “Say-on-Pay” at Netflix Inc. Annual Shareholder Meeting Dear Netflix Shareholder:

As you prepare for Netflix’s annual shareholders meeting on June 1st, on behalf of writers represented by the Writers Guild of America, West (WGAW), I urge you to vote against Proposal 3, the company’s proposal for advisory approval of Named Executive Officer compensation. Approval of this compensation package is inappropriate in light of the ongoing WGA writers’ strike and the associated risks that Netflix executives are creating for investors. Shareholders should send a message to Netflix that if the company could afford to spend $166 million on executive compensation last year, it can afford to pay the estimated $68 million per year that writers are asking for in contract improvements and put an end to the disruptive strike.

On May 2nd, over 11,500 film and television writers represented by the WGA went on strike after Netflix and other media companies represented in negotiations by the Alliance of Motion Picture and Television Producers (AMPTP) refused to negotiate an agreement that fairly compensates the writers who create their films and TV series. In the face of an unprecedented decline in compensation and the erosion of working conditions that have resulted from the business practices of streaming companies, writers are demanding to be paid fairly for the tremendous value they create for profitable media companies like Netflix.

Since May 2nd, the writers’ strike and support from other Hollywood unions have disrupted writing and/or production on numerous Netflix series including Stranger Things and Cobra Kai. Netflix’s content pipeline has been blocked, with dozens of projects that were in development or ordered to series as of May 1st unable to move forward until WGA negotiations conclude.

This disruption of content creation is of particular concern given Netflix’s recent rollout of advertising supported subscription tiers and its crackdown on password sharing in the U.S. and other major markets. A delay in the writing, production, and release of new content may impact Netflix’s ability to attract and retain subscribers and viewers just as the company asks customers to watch advertising and pay more for its content.

While investors have long taken issue with Netflix’s executive pay, the compensation structure is even more egregious against the backdrop of the strike. In the midst of a disruptive labor dispute, Netflix is asking shareholders to give retroactive advisory approval of the company’s 2022 reported executive compensation totaling over $166 million. By contrast, the proposed improvements the WGA currently has on the table would cost Netflix an estimated $68 million

per year. I urge you to vote against Proposal 3 and encourage Netflix to put an end to the disruptive strike.

Sincerely,

Meredith Stiehm

Comcast:

Re: Vote Against “Say-on-Pay” at Comcast Corporation Annual Shareholder Meeting Dear Comcast Shareholder,

As you prepare for Comcast’s annual shareholders meeting on June 7th, on behalf of writers represented by the Writers Guild of America, West (WGAW), I urge you to vote against Proposal 5, the company’s proposal for advisory approval of executive compensation. Approval of this compensation package is inappropriate in light of the ongoing WGA writers’ strike and the associated risks that Comcast executives are creating for investors. Shareholders should send a message to Comcast that if the company could afford to spend $130 million on executive compensation last year, it can afford to pay the estimated $34 million per year that writers are asking for in contract improvements and put an end to this disruptive strike.

On May 2nd, over 11,500 film and television writers represented by the WGA went on strike after Comcast and other media companies represented in negotiations by the Alliance of Motion Picture and Television Producers (AMPTP) refused to negotiate an agreement that fairly compensates the writers who create their films and TV series. In the face of an unprecedented decline in compensation and the erosion of working conditions that have resulted from the business practices of streaming companies, writers are demanding to be paid fairly for the tremendous value they create for profitable media companies like Comcast.

Since May 2nd, the writers’ strike and support from other Hollywood unions have disrupted writing and/or production on numerous NBCUniversal series, including Dick Wolf’s Chicago franchise, Law & Order, and Law & Order: SVU. The strike’s impact on Comcast’s broadcast lineup has a knock-on effect for its streaming business which relies on a steady flow of new broadcast episodes to populate its platform the day after episodes air on TV. In fact, Peacock gets roughly twice as many new scripted, WGA-covered episodes from in-season NBC content as it does from Peacock’s originals slate.

This disruption of content creation is of particular concern given Comcast’s plans to start charging Xfinity users for Peacock next month.1 A delay in the writing, production, and release of new original content may impact Comcast’s ability to maintain existing Peacock viewers, some of whom, for the first time, will have to decide whether the service’s content is worth paying for.

In the midst of the strikes’ disruption, Comcast is asking shareholders to give retroactive advisory approval of the company’s 2022 reported executive compensation totaling over $130 million. By contrast, the proposed improvements the WGA currently has on the table would cost Comcast an estimated $34 million per year. I urge you to vote against Proposal 5 and encourage Comcast to put an end to the disruptive strike.

Sincerely,

Meredith Stiehm

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