Netflix CEO Reed Hastings’ 2019 Compensation Totaled $38.58 Million
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Netflix CEO Reed Hastings’ compensation package totaled $38.58 million for 2019, up from $36.08 million the year before, with option awards totaling $37.4 million.
Hastings’ base for the past two years was $700,000. Option awards in 2018 were $33.38 million.
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Ted Sarandos, chief content officer, saw his base pay rise by $6 million to $18 million in 2019. His option awards also grew, for total 2019 compensation of $34.67 million from $29.65 million the year before, Netflix reported in its annual proxy statement filed early Wednesday. It came the day after the streaming giant reported a large jump in global subscribers for its first quarter.
The executive compensation for 2019 was initially announced in late December of 2018 after the Netflix board approved it.
This year, the annual document included a longer than usual explanation of pay practices and option grants in response to a non-binding vote by a slim majority of shareholders at last June’s annual meeting not to approve executive compensation packages. (Giving stockholders a so-called “say on pay” is required by securities law.)
“Our recent say on pay vote showed that there are concerns about our unique approach to pay. We welcome the input from our shareholders and have gained valuable insights during our conversations with many of you throughout the past year,” said lead independent director Jay Hoag in the proxy. Netflix does not give bonuses but offers a base salary and combination equity grants. Employees can opt to take more or less cash or stock.
“We take your feedback seriously,” he said, noting that a theme heard frequently during discussions was “a call for clearer and more transparent disclosure.” In response, he said, Netflix “enhanced this proxy statement, with the intent of providing clearer discussion of our governance and approach to executive compensation. We hope that we’ve made this year’s proxy easier to read.”
Netflix said in the proxy its executive compensation philosophy is designed to attract and retain outstanding performers, is guided by market rates and tailored to account for the specific needs and responsibilities of the particular position as well as the performance and unique qualifications of the individual employee.
Netflix on Tuesday reported revenue of $5.7 billion, in line with company guidance. Earnings per share at $1.57 was a a bit lower than $1.66 anticipated. But the subscriber number was a blowout – the company had estimated 7 million net ads. Breaking the figures out by regions, Netflix added 2.3 million net subs in U.S. and Canada to hit 70 million; it added 6.9 million across Europe, the Middle East and Africa to 59 million; it added 2.9 million subs in Latin America to 34 million; and added 3.6 million subs in Asia-Pacific to 20 million.
The first quarter reflected less than a full month of shelter-in-place orders which hit in March in the U.S. (March 19 in California and March 22 in New York) and are present in many other countries.
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