A few years ago Netflix went public and started selling shares on the open market. This was done to give Netflix more capital to grow and create original content.
As with all public companies, this means Netflix is open to having outside groups try to buy control of Netflix. Now two pension funds are trying to rally Netflix shareholders to do just that. The California Public Employees’ Retirement System (CalPERS) and the New York City Pension Fund have recommended that Netflix investors vote for their proposal to give shareowners access to the Netflix board of directors’ nomination process.
Well it may seem funny that city and sate retirement systems would care what Netflix is up but pension funds are major players in the stock markets and use them to help grow the funds. When they invest in ta company like Netflix they want to see it continue to grow like any other investor.
“We believe providing access to a company’s proxy by giving shareowners the ability to nominate directors to the board is one of the most important rights for owners of a company,” CalPERS investment manager Simiso Nzima and NYC comptroller Scott Stringer wrote in their letter to Netflix shareholders. “Without effective proxy access, the director-election process simply offers little more than a ratification of management’s slate of nominees.”
Netflix, as you would expect, filed a statement last month with the Netflix’s board unanimously urging a no vote on the proposal.
The process is a bit complicated, but if you want to learn more check out the Variety post for a full break down of what is being proposed and how it would work.
So what does this mean for cord cutters?
Likely nothing good if it passes. Clearly these funds have one thing on their mind: raising profits to help raise the stock price. Netflix has a long history of doing what is best for the subscriber over making a quick buck.
One has to wonder if the current board of shareholders get control of Netflix how that will affect the future of the largest streaming service in the United States.
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