Today Netflix, Inc. (NASDAQ:NFLX) shareholders will take an important decision at the company’s annual meeting that is whether to separate the role of Chairman and Chief Executive Officer into two positions, which are at present being held by Reed Hastings, the company’s co-founder, Bloomberg reports.
According to The New York Times, the proposal of separating the roles is hurled by two Pension funds, which are Calpers, a California public pension fund and the other from New York City’s comptroller and the overseer of the city’s pension funds, Scott M. Stringer. In addition to this, the proposal also finds its support of the two key shareholder advisory firms, namely Institutional Shareholder Services and Glass, Lewis & Company. The idea behind separating the roles is to prevent the board to be heavily influenced by the management decisions.
The concept is not new as it was already tabled during the last year’s shareholder meeting and had received 73% of votes in its favor, but was hardly baked into the company’s policy. The company’s resistance to such policies has led Mr. Stringer and Calpers to vote against the election of three directors this time, one of which includes Mr. Hastings as well. It is to be noted that both Caplers and Mr. Stringer holds just above 350,000 of shares out of the approximate 60 million shares of Netflix, Inc. (NASDAQ:NFLX).
While proposal of an independent chairman is the top priority, other proposals on the agenda include re-election of the board members every year instead of the current policy of three years. Of late, demarcation in the roles of CEO and the Chairman has picked up a trend among the Wall street firms. Among other, JPMorgan Chase & Co. (NYSE:JPM) and Abercrombie & Fitch Co. (NYSE:ANF) are the prominent ones to see intense pressure for separating the two key management positions.
On the other hand, the board of the Netflix, Inc. (NASDAQ:NFLX) has responded stating that the current model has served well in the past, implying the underlying risks of transitioning from the existing model.
Among the shareholders of Netflix, Inc. (NASDAQ:NFLX) is Carl Icahn‘s Icahn Capital Lp, which holds 2.24 million shares worth $790.17 million. It is followed by Coatue Management, led by Philippe Laffont, which has 9.61% of its equity portfolio invested in Netflix, Inc. (NASDAQ:NFLX), amassing 1.54 million shares as of March 2014.