Netflix, Inc. | NFLX | Meeting Date: 2013/06/07

When Carl Icahn increased his ownership stake to nearly 10% in October 2012, citing his belief that the Company’s shares may hold significant value as a potential acquisition, the board quickly adopted a poison pill designed to prevent Icahn from acquiring any additional holdings. While we note the Company’s share price has rebounded significantly in the past year, following the Company’s much maligned plan to separate its DVD by mail and streaming businesses and increase prices, we firmly believe shareholders should be given a say in the poison pill’s adoption. The board’s failure to submit the rights agreement to shareholder vote is particularly concerning in light of its recent history of failing to implement majority-approved shareholder proposals, including a proposal at the 2011 annual meeting to eliminate supermajority voting requirements, which received the affirmative vote of approximately 72% of votes cast, and a proposal in 2012 seeking to declassify the board, which was approved by approximately 75% of votes cast. In both instances, the board seemingly ignored the will of a significant majority of votes, and took no steps to implement these shareholder initiatives. We believe that all board members who served during the past year should be held accountable for failing to submit the stockholder rights agreement for shareholder vote.


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