Summary:

Shareholders vote overwhelmingly to change the company’s classified board status, which features various members serving staggered terms of differing lengths, into a standard structure in which members come up for vote every year. While non-binding, the vote could leave Netflix more open to takeover.

Netflix

Netflix shareholders voted overwhelmingly last week to change the way the company’s board is structured, potentially leaving the company more vulnerable to takeover.

In a filing to the Securities and Exchange Commission dated June 1, shareholders voted 26.8 million in favor vs. nearly 9 million opposed to change the board from what is known as a classified structure.

A classified board means that board members serve unequal, overlapping terms as opposed to having all members come up for re-election at the same time each year.

While non-binding, the strength of the vote will put pressure on Netflix’s board to adopt the measure. With Netflix founder and CEO having stated his preference to keep Netflix independent, the company had urged shareholders for a no vote.

Netflix shareholders also voted yes on a measure to make the convening of special shareholder meetings easier to conduct — Netflix asked shareholders to shoot that measure down, too, but it passed with a vote of 19.1 million to 16.7 million.

Also, shareholders voted overwhelmingly — 31.4 million to 4.5 million — to re-elect Richard Barton to the board. The founder of real-estate site Zillow has been a Netflix director since 2002.

The fact that shareholders voted for change probably isn’t surprising, given the huge swings Netflix’s stock price has endured in the last 11 months.

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