Netflix, Inc. entered 2026 with a deal that should have been the entertainment industry‘s defining transaction of the decade. By the end of February, that deal was dead, and Netflix had handed its biggest acquisition target to a competitor.
NLPC has circulated to Netflix shareholders a solicitation report supporting Proposal 7 — “Adopt Cumulative Voting” — on the Netflix proxy ballot, ahead of the Company’s June 4, 2026 annual meeting. The full report is available here.
Shareholders should vote FOR Proposal 7 NOW at www.proxyvote.com — not wait for the annual meeting. The chain of events demonstrates how board composition can destroy shareholder value when the political wind shifts.
In December 2025, Netflix and Warner Bros. Discovery announced an $82.7 billion agreement under which Netflix would acquire WBD’s studios and HBO Max. The deal required favorable regulatory determinations from the Trump administration’s Department of Justice.
Throughout late 2025 and early 2026, Netflix’s management defended the deal’s strategic and financial logic. By mid-January 2026, the share price had fallen to a 52-week low as investors registered concerns about cost and regulatory complexity.
Susan Rice/PHOTO: New America (CC)
Then sitting Netflix director Susan Rice — a former Obama administration national security and domestic policy advisor — got on a podcast.
On February 19, 2026, Ms. Rice warned corporate America of an “accountability agenda” and “subpoenas” for companies that “take a knee to Trump” when Democrats return to power. Within four days, President Donald Trump demanded on Truth Social that Netflix dismiss her or “pay the consequences.”
Netflix co-CEO Ted Sarandos told the BBC the next day that the President “likes to do a lot of things on social media.”
Three days later, Paramount Skydance raised its competing offer to $111 billion all-cash. On February 26, 2026, the WBD board declared Paramount’s bid superior. Netflix walked away, saying the deal at the new price was “no longer financially attractive.”
The deal Netflix had pursued for months — that Mr. Sarandos had championed — was over.
Corporate governance experts who spoke to Business Insider were direct in their criticism. Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware, told the publication: “It’s poor judgment. And you’re elected as a director for your judgment.”
Bradley Akubuiro of Bully Pulpit International turned the episode into a case study, telling Business Insider that “every company in America that has a pending regulatory approval should be watching the case.”
What does this have to do with cumulative voting?
Everything. The WBD failure was not a failure of strategy. It was a failure of board composition.
The directors Netflix shareholders are being asked to elect produced this outcome. The board that permitted Ms. Rice to threaten federal regulators in public — and Mr. Sarandos to dismiss the resulting presidential intervention — is the same board shareholders are being told they should keep in place.
Netflix’s much-touted procedural governance reforms (declassification, majority voting, special meeting rights) did not flag the WBD risk in advance. They did not constrain the conduct in the moment. They have not produced visible accountability since.
The structural concerns run deeper. At the 2025 annual meeting, Lead Independent Director Jay Hoag — a 27-year incumbent who chairs the committee that nominates Netflix’s directors — did not receive a majority of votes cast. The Board declined to honor the shareholder rejection and reinstated him.
Beyond the two co-CEOs, two additional 2026 nominees are former Netflix executives the Company classifies as “independent.” Four of twelve directors have direct Netflix executive employment history. This is what an insular board looks like.
Cumulative voting addresses the problem at its root. By allowing shareholders to aggregate their votes for a single candidate, it creates the possibility of seating one director from outside the current nomination structure.
The Securities and Exchange Commission has noted cumulative voting “helps strengthen the ability of minority shareholders to elect a director.” Modern boards are susceptible to groupthink — documented by PwC on the Harvard Law School Forum on Corporate Governance as a leading cause of catastrophic boardroom decisions.
A director seated through cumulative voting would not displace Ms. Rice, Mr. Hoag, or anyone else on the slate. That director would sit alongside them — and might raise the question of whether a sitting Netflix director should antagonize the regulators reviewing a pending acquisition. Or whether a board that loses a majority vote on its Lead Independent Director should reinstall him.
Netflix shareholders are entitled to a board whose composition reflects the broad shareholder base — not just the institutional shareholders whose votes track management.
Vote FOR Proposal 7 NOW at www.proxyvote.com (you will need a control number or your account number).
(Post references PX14A6G Notice of exempt solicitation)
(Image at top created via Grok AI)
