Good day. Welcome to Netflix's 2020 annual meeting of stockholders. I will now turn the call over to Netflix's CEO, Reed Hastings, to begin the meeting. Please go ahead, sir.
Good afternoon. My name is Reed Hastings, and I'm the Chief Executive Officer of Netflix, Inc. It's my pleasure to welcome you to the company's 2020 annual meeting of shareholders. We have the following officers and directors in attendance: Spencer Neumann, CFO, David Hyman, Chief Legal Officer, Rachel Whetstone, Chief Communications Officer. Of directors, Leslie Kilgore, Tim Haley, Ambassador Susan Rice, Rich Barton, Anne Sweeney. Also present are Alex Bender from Ernst & Young LLP, our independent registered public accounting firm, and Spencer Wang, Netflix's Vice President of Investor Relations. The annual meeting is now called to order. This meeting is being held to consider the proposals listed in the proxy statement previously delivered to you, and to conduct such other business as may properly come before the meeting.
The Inspector of Elections, Lou Larsen, a representative of Broadridge, has confirmed a quorum is present, and so the meeting is duly constituted, and the polls are now open. We have four management proposals on the ballot that will be voted on at this meeting. The election of directors, to ratify the appointment of Ernst & Young as our independent auditors, advisory approval of our executive officer compensation, and the approval of Netflix's 2020 stock plan. We also have three stockholder proposals on the ballot. The sponsor of these proposals wishes to make a brief presentation, so we will call on you now. Operator, please open the line for Mr. McRitchie for Proposal 5.
Your line is now open.
Hi, Myra Young and James McRitchie of corpgov.net. It requests Netflix to report policies, procedures, and expenditures of its political spending. In its much despised 2010 Citizens United decision, which removed limits on corporate political spending, Judge Kennedy was not worried about the corrupting influence of corporate money because he thought such expenditures were reported. Here's two of the sentences from that decision. "With the advent of the Internet, prompt disclosure of expenditures can provide shareholders and citizens with the information needed to hold corporations and elected officials accountable. Shareholders can determine whether their corporation's political spending advances the corporation's interest in making profits, and citizens can see whether elected officials are in the pocket of so-called moneyed interests." Unfortunately, much of the data Judge Kennedy assumed to be public is not public.
This proposal simply seeks to fill that gap by asking Netflix to disclose all of its electoral spending, including payments to trade associations and other tax-exempt organizations like super PACs. This would bring Netflix in line with a growing number of leading companies too long to list here in this short presentation. This election year, the stakes have never been higher. Dark money is everywhere, trying to influence us through social media and other avenues. Don't you want to know what payments Netflix is making to trade associations and other tax-exempt organizations that can be used for political purposes? Now, let's trust our board, but let's also verify. We can do that by shining a light on dark money. Our advice is, don't drink the bleach. Disclosure is the best disinfectant against the dark money virus. Please vote for Proposal Number 5 , and thank you.
Thank you. Operator, please open the line for Mr. Chevedden for Proposal 6, please.
Your line is now open.
Hello, this is John Chevedden. Can you hear me okay?
Yes, we can.
Yes, we can.
Proposal 6, simple majority vote. Shares request our board take each step necessary so that each voting requirement in our charter and bylaws that calls for a greater than simple majority vote be eliminated and replaced by a requirement for a majority of the votes cast for and against the applicable proposals or a simple majority in compliance with applicable laws. Currently, a 1% minority can frustrate the will of our 66% shareholder majority in election with 67% of shares casting ballots. In other words, a 1% minority could have the power to prevent shareholders from improving the governance of our company. This can be particularly important during periods of management underperformance or an economic downturn. Currently, the role of shareholders is downsized because management can simply shun an overwhelming 66% vote of shareholders. This proposal won more than 80% support four times at Netflix since 2011.
It won 80%, 81%, 82%, and 88%. However, our corporate governance committee has thrown cold water in the face of Netflix shareholders and has not yet put this proposal topic on the ballot as a management proposal. Shareholders were not happy with this shunning of shareholder votes by directors and gave governance committee chairman, Mr. Jay Hoag, a negative vote of 48%. Mr. Hoag is on the ballot today, and shareholders have the option to vote against Mr. Hoag again if they have not already done so. Shareholders with diversified portfolios might want to look closer at Mr. Hoag's performance as a director at Electronic Arts, TripAdvisor, and Zillow Group. The Zillow meeting is on June 9th. The two other members of the governance committee are Ambassador Susan Rice, who was previously rejected by 63% of Netflix shareholders, and Brad Smith, who was previously rejected by 44% of Netflix shareholders.
Ambassador Rice's 63% rejection may be the all-time record rejection vote regarding a director who held the title of ambassador. With these high rejection rates for the governance committee directors, these directors may have limited prospects of being a director at any other public company except for their current directorships. This shunning of shareholder votes on this proposal topic is all the more outrageous since Mr. Hastings was reported to have received $222 million in total realized pay in 2019, and shareholders rejected executive pay at last year's annual meeting, a stunning outcome. Please vote yes. Proposal 6, simple majority vote.
Great. Operator, please open the line for Mr. Danhof for Proposal 7, please.
Your line is now open.
Thank you. I'm Justin Danhof of the National Center for Public Policy Research. I move Proposal Number 7, which seeks to increase diversity within the Netflix community. Netflix appears to be a company solely of, for, and run by liberals. Its outward-facing actions speak to that. For example, even as buildings are looted, vehicles are torched, historic landmarks are defaced, and places of worship are desecrated, Netflix has expressed support for Black Lives Matter. All sane people, including us at the National Center, condemn the killing of George Floyd and support Black communities. That's not at all what Black Lives Matter movement stands for. According to the Capital Research Center, Black Lives Matter was founded by avowed communists, with the result being that many of their actions inflame, not heal, racial divisions. It's no coincidence that Antifa anarchists are among the rioters burning down our cities today.
Netflix's supposed support of Black lives certainly doesn't extend to Black babies. In 2019, in response to pro-life legislation in Georgia, Netflix suggested it would reconsider its investments in the state. As everyone knows, Black babies are killed by abortion at far higher rates than any other ethnic group in America. Netflix posturing against pro-life measures caused backlash from Americans that support life. Does anyone at Netflix support life? Are they allowed to do so by management? The company's virtue signaling to support anti-life causes is laughable. At the same time Netflix was opposing a pro-life bill here in America, you all were investing $8 billion in Egypt. You do know abortion is 100% illegal in Egypt, right? Mr. Hastings, where are your calls to boycott Egypt?
Speaking of Mr. Hastings, if he can defend the hypocrisy of threatening Georgia with a boycott while staying silent on Egypt regarding life issues, why did he duck my question on that topic during last year's shareholder meeting? Defend yourself. He is certainly not shy about his extreme liberalism and desire for other corporate leaders to toe that party line. While serving on the board of Facebook, he even verbally attacked fellow board member Peter Thiel over his support for President Trump. Given all of this, how could any conservative possibly feel welcome at Netflix? If you had adopted our proposal, that would have been a start. We believe that diverse workforces can think more critically and deliver greater results. That's a win for investors and a win for true diversity. Please join me in voting yes on Proposal Number 7. Thank you for your time.
Thank you. Reed, that concludes the presentation of proposals.
Thank you. We will vote by ballot on the agenda items described in the proxy statement previously sent to you. Any shareholder who hasn't yet voted or wishes to change their vote may do so now by clicking on the Vote Here button on the shareholder meeting link and following the instructions there. Stockholders who have sent in proxies or voted via telephone or internet and do not want to change their vote do not need to take any further action. While we allow time for shareholders who haven't already voted to complete their voting, I'd like to remind you that some of the statements made at this meeting may be considered forward-looking and are subject to certain risks and uncertainties that are described in our filings with the SEC, including the annual report on Form 10-K as amended for the fiscal year ending December 31st, 2019.
We'll now pause a moment more for voting.
The polls for each matter to be voted on at this meeting are now closed. No additional ballots, proxies, or votes, and no changes or revocations will be accepted. Mr. Larsen, will you report on the vote of the matters brought before the meeting?
Yes. Thank you. Based on preliminary results, the director nominees were duly elected. The stockholders voted in favor of the appointment of Ernst & Young LLP, the named executive officer compensation, and the 2020 stock plan. Stockholder Proposals 5 and 7 were not approved. Stockholder Proposal 6 was approved.
Thank you. We will be reporting the final vote results in a Form 8-K within four business days of today's meeting. This concludes our annual meeting. There being no further business, I declare that the annual meeting of stockholders is hereby concluded.
Thank you, Reed. We will now answer a few questions that were submitted by shareholders. Before we start, I want to note that directors Jay Hoag and Brad Smith are also present. Please note that every quarter in our financial results, we answer shareholder questions by designating one analyst as interviewer and sharing their email address for all shareholders to submit questions to ask management. Our first question is, "Has any proxy advisor recommended a yes vote for management Proposal 3 regarding executive pay?" I can answer that question, Reed, and take that. The answer is no. Question number two is, "Please name the directors that did not attend or attend today's online meeting." We covered that in our prepared remarks. We will move on to the next question.
The next question is for Reed, which is, "When was the last in-person board meeting, and how is the board meeting given the current pandemic?
The last in-person board meeting was in March. Since then, we've been meeting on video conferencing.
Thank you, Reed. The next question is, "HBO Max launched recently, which comes on the heels of Disney+, Apple TV+, and Amazon Prime Video. What is Netflix's strategy to defend its business from new competitors?
As in the past, our fundamental strategy is to do the best job we can at pleasing our members. When our members are very happy, they tell their friends about Netflix, and we continue to grow.
Great. For our last question, Reed, "Do you plan any share buybacks in 2020, and if so, how much?
No share buybacks that I know of are planned.
Great. That now concludes the Q&A session in our 2020 annual meeting, and we thank you all for participating.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.