Netflix Executives (Sort of) Take Pay Cuts in 201523 Dec, 2014 By: Erik Gruenwedel
CEO Reed Hastings and CCO Ted Sarandos receive $3.8 million less in combined salary but much more in tax-friendly stock options
Netflix CEO Reed Hastings in 2015 will earn a 66% smaller paycheck, while chief content officer Ted Sarandos takes home 65% less in salary, according to a regulatory filing. Hastings, who co-founded Netflix, and Sarandos will each receive a $1 million base salary.
But don’t shed tears for the subscription streaming pioneer’s most public faces. Hastings will see the limit on stock options mushroom to $13.7 million from $3 million in 2014. Sarandos will see his stock-option cap top $9.6 million from $2.2 million. He is also entitled to a $2 million bonus based on certain performance criteria.
It’s a win-win for all parties as Netflix lowers it corporate income taxes and Hastings and Sarandos cash in more stock options, thereby exponentially increasing their total compensation from already lofty 2014 levels.
Meanwhile, CFO David Wells saw his salary increase 110% to $2 million, with a stock-option allowance of $1.67 million compared with $550,000 in 2014.
Chief product officer Neil Hunt took a $750,000 pay cut to $1 million, but saw his stock-option allowance increase $100,000 to $1.87 million. Hunt is also eligible for a $5 million bonus.
Chief streaming officer Greg Peters’ $1 million base salary stays the same, while is stock-option cap increases $1.75 million to $2.75 million. He can also earn a $1 million bonus.