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Netflix shareholders back simple majority vote, reject clawback

Netflix Inc. stockholders approved four nonbinding proposals at the company's June 6 annual meeting, including one about making changes through a simple majority vote.

The California State Teachers' Retirement System, which put forward the simple majority vote proposal, argued that Netflix's bylaws contain several provisions that make effective stockholder oversight difficult, such as requiring a supermajority to change certain provisions of the bylaws relating to director elections or removals.

The shareholders also backed a proposal to give investors that own a 15% aggregation of Netflix's stock the power to call a special shareholders' meeting. Investor Myra Young of Elk Grove, Calif., who presented the proposal, said it is an important way to bring issues to the attention of both management and shareholders outside the annual meeting cycle.

Proposals related to adopting a proxy access bylaw and a shareholder right to act by written consent were also approved.

Netflix shareholders, meanwhile, rejected a proposal from the City of Philadelphia Public Employees Retirement System, which sought to have the compensation committee adopt a clawback policy that would determine when to recover incentive compensation paid to a senior executive who engages in misconduct that violates the law or damages the company's reputation.

Stockholders also defeated a proposal from the Services Employees International Union, which urged the company to change sections 2.8 and 3.3 of the bylaws to allow directors to be elected by a majority of shares voted, not by a plurality of shares voted.

The company had urged stockholders to reject these proposals.

Additionally, shareholders elected four class I directors to hold office until the 2021 annual meeting: Richard Barton, Rodolphe Belmer, Bradford Smith and Anne Sweeney.