NETFLIX, INC. | Political Disclosures

Status
80.66% votes in favour
AGM date
Proposal number
4
Resolution details
Company ticker
NFLX
Lead filer
Individual
Resolution ask
Report on or disclose
ESG theme
  • Governance
ESG sub-theme
  • Lobbying / political engagement
Type of vote
Shareholder proposal
Filer type
Shareholder
Company sector
Consumer Discretionary
Company HQ country
United States
Resolved clause
Shareholders of Netflix Inc (“Company”) hereby request that our Company provide a report, updated semiannually, disclosing the Company’s:



1.
Policies and procedures for making, with corporate funds or assets, contributions and expenditures (direct or indirect) to (a) participate or intervene in any campaign on behalf of (or in opposition to) any candidate for public office, or (b) influence the general public, or any segment thereof, with respect to an election or referendum.



2.
Monetary and non-monetary contributions and expenditures (direct and indirect) used in the manner described in section 1 above, including:



a.
The identity of the recipient as well as the amount paid to each; and



b.
The title(s) of the person(s) in the Company responsible for decision-making.

The report shall be presented to the board of directors or relevant board committee and posted on the Company’s website within 12 months from the date of the annual meeting. This proposal does not encompass lobbying spending.
Supporting statement
As long-term shareholders, we support transparency and accountability in corporate electoral spending. This includes any activity considered intervention in a political campaign under the Internal Revenue Code, such as direct and indirect contributions to political candidates, parties, or organizations, and independent expenditures or electioneering communications on behalf of federal, state, or local candidates.

Disclosure is in the best interest of the company and its shareholders. The Supreme Court recognized this in its 2010 Citizens United decision, which said, “[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.”

Relying on available data does not provide a complete picture of the Company’s electoral spending. For example, payments to trade associations that may be used for election-related activities are undisclosed and unknown. This proposal asks Netflix to disclose all of its electoral spending, including payments to trade associations and other tax-exempt organizations, which may be used for electoral purposes. This would bring our Company in line with a growing number of leading companies in the 2020 CPA-Zicklin Index.1

Proposals on this topic at Alliant Energy, Macy’s, and Cognizant Technology Solutions passed last in 2019, despite board opposition. In 2020, shareholders of Activation Blizzard, Centene Corporation, J.B. Hunt Transport Services, and Western Union have also passed similar proposals. The Company’s Board and shareholders need comprehensive disclosure to fully evaluate the use of corporate assets in elections. We urge your support for this critical governance reform.

Consider also that our Company maintains a classified board, plurality vote standard for uncontested directors, supermajority requirements to change bylaws, and does not allow shareholders to act by written consent. This, despite the fact that a majority of shares voted to change each of these provisions, sometimes more than once.

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