Latest On WGA Strike: Netflix Shareholders Vote To Reject Executive Pay Packages

Since it went on strike more than a month ago, the Writers Guild of America has not had much to celebrate. But on Thursday, Netflix shareholders gave the screenwriters an unexpected victory by backing the WGA’s fight against the streaming giant’s pay packages.

While the vote against the company’s proposed 2023 compensation plan for Netflix’s leaders is not binding, it does suggest that the WGA is not alone in objecting to the outsized earnings Hollywood executives typically collect. The final vote on the compensation proposal at Netflix’s annual meeting will not be revealed until a future securities filling.

Netflix did not have an immediate comment on the results but previously had urged shareholders to reject it.

WGA reaction

WGA President Meredith Stiehm recently wrote an open letter to shareholders of Netflix and Comcast, the parent of NBC Universal, asking them to vote against approving compensation for its leaders at their upcoming shareholder meetings. The top executives at Comcast made $130 million last year, while the top Netflix executives pocketed $166 million, the WGA says.

“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,” Stiehm wrote in the Netflix letter.

About that pay

• Netflix’s co-CEO Reed Hastings (now executive chairman) was paid $51.1 million, while co-CEO Ted Sarandos was paid $50.3 million.
  
• Sarandos’ proposed 2023 compensation would include an annual salary of $3 million, along with an additional $20 million in stock, and a bonus of up to $17 million.
  
• Current co-CEO Greg Peters would also have a $3 million salary, along with $17.3 million in stock and a bonus of up to $14.3 million.

Background: What AMPTP has said

Hollywood producers released a statement on May 4 that addressed specific points of the WGA's concerns. Among the issues addressed by the Alliance of Motion Picture and Television Producers were:

• "Gig economy" for writers: It says screenwriting has almost nothing in common with standard “gigs" jobs. Writers often have a guarantee of specific weeks or episodes, and writing jobs come with benefits such as employer-paid health care and pension plan contributions.
  
• Mandatory staffing and duration of employment: The AMPT sees this essentially as a hiring quota that's "incompatible with the creative nature of our industry", and says it's a one-size-fits-all solution to shows that are each unique.
  
• Overall Numbers: The AMTP disputes the WGA's claim that it's only offering $41 million a year in minimum wage increases. It says it's nearer $97 million per year, which doesn't take into account other wage and residual increases it's offered.
  
• Wage Increases: It's offering the highest first-year general wage increase in more than 25 years, while also offering to create "an entirely new category of rates that will establish a new and higher floor for mid-level writers’ compensation".

• Streaming Residuals: A 46% increase in residuals took effect in 2020, and many writers have yet to see these in their paychecks. For a one-hour episode of a Netflix or Amazon Prime series, a writer receives $72,000 in residuals over three years, growing to $114,000 over seven years.
  
• Artificial Intelligence: "AI raises hard, important creative and legal questions for everyone. For example, writers want to be able to use this technology as part of their creative process, without changing how credits are determined, which is complicated given AI material can't be copyrighted. So it's something that requires a lot more discussion, which we've committed to doing."

Background: What the WGA has said

In a statement released the night before the strike began, the WGA said:

• Read the full WGA statement

What Else You Should Know

• It is the first WGA strike in 15 years; the last work stoppage began in November 2007 and lasted 100 days.
  
• As of today, no new talks were scheduled.

Why It Matters

The WGA says that most of its nearly 12,000 members are making less than they once did, and that after factoring for inflation, average WGA pay has actually dropped 14% over the last five years.

The union says about half of WGA members are earning scale — the bare minimum wages stipulated by the contract with the AMPTP. Ten years ago, it was only a third.

Executives at studios and streamers maintain that they are still recovering from pandemic losses and have spent billions of dollars creating and buying content for new streaming platforms, some of which are far from profitable.

For Hollywood executives, the stakes are high: if the AMPTP deal for writers increases pay and residual payments, their profit margins could shrink. Furthermore, other Hollywood unions would likely use any WGA gains as the template for their demands; contracts for the Screen Actors Guild and the Directors Guild of America both expire in the coming weeks.

How We're Reporting On This

John Horn, who covers arts and entertainment, has been following negotiations closely. In addition, our AirTalk team has featured the strike in on-air discussions on LAist 89.3 and LAist coverage.
Our podcasts HTLA and Retake have also talked to writers and others affected by the strike.

This is a developing story. We fact check everything and rely only on information from credible sources (think fire, police, government officials and reporters on the ground). Sometimes, however, we make mistakes and/or initial reports turn out to be wrong. In all cases, we strive to bring you the most accurate information in real time and will update this story as new information becomes available.

What Questions We're Asking

• What are the main sticking points in the negotiations?
• How do the contracts of other Hollywood unions — some of which have no-strike clauses — affect this strike?
• What's next for your favorite shows.

Learn more

• TV And Movie Writers Strike Over 'Gig Economy' Conditions. What’s At Stake In The WGA Walkout
• From Gas Stations to Restaurants: How The WGA Strike Will Hit The LA Economy
• This Hollywood Writers Strike Could Have Massive Economic Impact. An Economist Explains What We Can Learn From 2007

Your Questions Or Ideas