S&P 500 chief executive officers have opened up their wallets for this month’s midterm elections, and none more than Reed Hastings.
Hastings, who is also co-founder of the Silicon Valley-based streaming video giant, contributed a total of $3.05 million of his own money to Democratic groups, according to MarketWatch’s analysis of processed Federal Election Commission data for the 2022 cycle as of Oct. 31.
That’s far ahead of the chief executive officer ranked second in political spending, as shown in the graphic below that lists the top 20 donors.
At No. 2 is Steven Roth at Vornado Realty VNO, +4.57%, a real estate investment trust based in New York. He contributed a total of about $608,000 of his money to Republican groups.
The biggest outlays by Hastings were $2 million for Senate Majority PAC and $963,500 for House Majority PAC, which are Democratic super PACs that are aiming to help the party retain control of each chamber of Congress in the midterms. Super PACs are independent political action committees that can raise unlimited sums of money and shouldn’t coordinate with individual candidates or campaigns.
The Netflix CEO is known for his past generous support of Democratic politicians such as California Gov. Gavin Newsom and former presidential candidate Hillary Clinton, as well as for backing charter schools. It makes sense that he is continuing his giving to Democrats, according to Michael Beckel, research director at Issue One, a nonpartisan watchdog group that aims to reduce the influence of big money in politics.
“If a party has a deep-pocketed donor that they’ve been cultivating, they’re always eager to keep that relationship going — to see that person give large sums of money in each subsequent election cycle,” Beckel told MarketWatch.
“It is striking that he has given so much more than the people lower down on that list. In the super PAC era, CEOs are able to cut very large checks to groups that favor their preferred candidates, and it looks like he has not been afraid to do that.”
Beckel also noted that some industries are filled with people who lean toward one party. Silicon Valley money tends to flow in one direction — toward Democrats — while oil and gas money can flow in the other direction. Chevron CVX, +1.26% is among the energy companies featured in the chart above with a CEO giving mostly to Republican groups.
Business leaders are weighing a lot of competing interests when they decide to become politically active, Beckel said.
“Some would say that businesses need to be very engaged in politics, lobbying and making their voices heard in Washington, and campaign contributions are one of the ways that businesses have a seat at the table and can make sure that they are forging relationships with lawmakers who could be affecting their business’s bottom lines,” the Issue One expert said.
“At the same time, business leaders are also weighing the risk of isolating part of their consumer base. If their political giving is entirely supporting one party or the other, they could risk alienating customers who align with the other party.”
Netflix didn’t respond to a request for comment. MarketWatch contacted company representatives for the S&P 500 CEOs who ranked among the top 10 donors in the current election cycle. Intuit INTU, -1.04%, FedEx FDX, +1.12% and Motorola Solutions MSI, +7.01% declined to comment, while Aflac AFL, +1.83%, Chevron, Copart CPRT, +1.21%, First Republic Bank FRC, +1.34%, Oracle ORCL, +1.29% and Vornado didn’t respond to requests for comment.
When a company’s CEO makes a political contribution, it can have consequences for the company, said Bruce Freed, president of the Center for Political Accountability, a nonprofit that pushes for better transparency around corporate election-related spending.
“It’s a personal contribution on their part, but clearly they’ve done well because they have the top position at the company, and they’re paid handsomely for that,” Freed said. “So it can it can have an impact on the company, depending on the type of company that it is.”
His organization is focused on political spending that uses corporate funds, rather than an executive’s personal money. The center has been warning that companies face much greater scrutiny nowadays on their election-related spending, so they should have strong governance policies for such outlays.
“Companies have to be very concerned about what they are associated with through their political spending, and if they are in a line where that could impact the brands or generate adverse consumer reaction or reaction from employees. This makes political spending by companies today fraught with much greater risk,” Freed said. Companies can end up tied to positions on abortion, climate change or election denial that they didn’t plan to be taking.
MarketWatch’s analysis of political spending by CEOs includes anyone who held the post of chief executive at any S&P 500 company in 2021 or 2022, so political donors such as First Republic Bank’s James Herbert and FedEx’s Fred Smith are featured, even though they are no longer in that job.
Even with an outlay of $3 million, Netflix’s Hastings has spent far less than this election cycle’s 10 biggest megadonors overall, who include billionaire financier George Soros and billionaire entrepreneur Peter Thiel. Those 10 megadonors have shelled out between $19 million and $129 million, according to a recent MarketWatch report.
For the 2018 midterm elections, MarketWatch’s analysis at that time found Jeff Bezos, then CEO of Amazon.com AMZN, +1.88%, was the biggest spender among S&P 500 chief execs with his outlay of $10 million. He’s now the online retailer’s executive chairman. Hastings significantly upped his political giving since 2018. During the midterm cycle four years ago, the Netflix co-chief donated roughly $600,000 to Democratic groups.