Netflix: No Executive Pay Hikes in 20097 Apr, 2009 By: Erik Gruenwedel
Despite appearing recession-proof, with revenues, profits and shares prices near record highs, Netflix Inc. declined to award pay raises to its senior executives in 2009.
The Los Gatos, Calif.-based online DVD rental pioneer, in a proxy statement, said co-founder and CEO Reed Hastings this year is scheduled to receive total compensation of $2 million, including $1 million in stock options, identical to his payment in 2008.
Other executive officers likewise did not receive raises, including Neil Hunt, chief product officer, who is slated to earn $1.2 million, including $400,000 in stock options; chief marketing officer Leslie Kilgore, who will earn $1.5 million, including $750,000 in options; CFO Barry McCarthy, $1.4 million, including $800,000 in options; and Ted Sarandos, who will receive $1 million, including $100,000 in stock options.
Netflix cited current economic conditions for determining not to award raises.
By comparison Blockbuster CEO Jim Keyes received a 49% pay hike in 2008 to $8.4 million in total compensation — more than four times Hastings’ compensation.
For 2009, Netflix allowed senior executives to allocate up to 60% of their total compensation in stock options, up from 50%.
Unlike many public companies, Netflix does not award performance bonuses for its executives. Rather, it expects management to perform at a level deserving of a bonus and such bonus amounts are taken into consideration when determining total compensation.
Netflix will hold its annual meeting and board elections May 28 in Los Gatos.
Netflix shares April 7 closed down 80 cents to $43.70 per share.