DEF 14A of Netflix Inc
Filed Apr 21, 2023 · FY20220001193125-23-110513
Directors Standing for Election
Directors Standing for Election Four directors, Mathias Döpfner, Reed Hastings, Jay Hoag and Ted Sarandos, are to be elected at the Annual Meeting. Unless otherwise instructed, the proxy holders will vote the proxies received by them for Messrs. Döpfner, Hastings, Hoag and Sarandos, each of whom is currently a director of the Company. If any of Messrs. Döpfner, Hastings, Hoag and Sarandos is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for a substitute nominee designated by the Board to fill the vacancy. Each of Messrs. Döpfner, Hastings, Hoag and Sarandos has agreed to serve as a director of the Company if elected. Stockholders approved the management proposal to declassify the Board at the 2022 annual meeting of stockholders. As such, the term of the office of directors elected at this Annual Meeting will continue until the annual meeting of stockholders held in 2024 or until such director’s successor has been duly elected or appointed and qualified, or until their earlier resignation or removal, with the entire Board standing for annual election beginning in 2025.
Directors Standing for Election
| Nominee | Age | Principal Occupation | | Mathias Döpfner | 60 | Chairman and CEO of Axel Springer SE | | Reed Hastings | 62 | Executive Chairman of Netflix | | Jay Hoag | 64 | General Partner, TCV | | Ted Sarandos | 58 | co-Chief Executive Officer and President of Netflix |
Directors Standing for Election
Each nominee has extensive business experience, education and personal skills that qualifies him to serve as an effective Board member. The specific experience, qualifications and skills of Messrs. Döpfner, Hastings, Hoag and Sarandos are set forth below. The Nominating and Governance Committee evaluates potential candidates for service on the Board.
Our Directors
Our Directors Directors standing for election:
Our Directors
| Mathias Döpfner | INDEPENDENT DIRECTOR | Other Public Company Boards • Warner Music Group Corp. | | DIRECTOR SINCE: 2018 CLASS: III | AGE: 60 COMMITTEES: COMPENSATION | | | Why this director is valuable to Netflix As a media executive located in Germany, Mr. Döpfner brings international perspective, media experience and business acumen to the Board. Also... Mr. Döpfner has extensive experience in media and digital transformation and a strong track record of increasing revenues related to digital activities. He previously served on the boards of Vodafone Group plc (2015-2018) and Time Warner Inc. (2006-2018). Additionally, his relationships and honorary offices at entities including the American Academy, the American Jewish Committee and the European Publishers Council among many others provide him with relevant insight and perspective in international media. He studied Musicology, German and Theatrical Arts in Frankfurt and Boston. Career Snapshot: • Chairman and CEO, Axel Springer SE, Europe’s leading digital publishing house (since 2002) • His former roles at Axel Springer SE include editor-in-chief of Die Welt (1998-2000) and as a member of the Management Board (starting in 2000) • Visiting Professor in media at University of Cambridge, St. John’s College (2010) | | |
Our Directors
| Reed Hastings | EXECUTIVE CHAIRMAN OF THE BOARD | Other Public Company Boards • None | | DIRECTOR AND CHAIRPERSON SINCE: 1997 CLASS: III | AGE: 62 COMMITTEES: NONE | | | Why this director is valuable to Netflix Mr. Hastings is the co-founder and Executive Chairman, and previously served as the co-Chief Executive Officer and President of Netflix for over 25 years. He deeply understands the technology and business of Netflix and brings strategic and operational insight to the Board. He is also a software engineer, holds an MSCS in Artificial Intelligence from Stanford University, and has unique management and industry insights. Also... Mr. Hastings is an active educational philanthropist: he served on the California State Board of education from 2000 to 2004, and after receiving his B.A. from Bowdoin College in 1983 served in the Peace Corps as a high school math teacher. Mr. Hastings previously served on the board of Facebook, Inc. from 2011-2019 and Microsoft Corporation from 2007-2012. Career Snapshot: • Founder, co-Chief Executive Officer, President (1997-January 2023) and Chairman of Netflix (since 1997) • Founder, Pure Software (1991) through IPO (1995) and ultimate sale to Rational Software | | |
Our Directors
| 6 | |
Our Directors
| Jay C. Hoag | LEAD INDEPENDENT DIRECTOR | Other Public Company Boards • Peloton Interactive, Inc. • TripAdvisor, Inc. • Zillow Group, Inc. | | DIRECTOR SINCE: 1999 CLASS: III | AGE: 64 COMMITTEES: NOMINATING AND GOVERNANCE (CHAIR) | | | Why this director is valuable to Netflix As a venture capital investor, Mr. Hoag brings strategic insights and financial experience to the Board. He has evaluated, invested in and served as a board member for numerous companies, both public and private, and is familiar with a full range of corporate and board functions. His many years of experience in helping companies shape and implement strategy provide the Board with unique perspectives on matters such as risk management, corporate governance, talent selection and management. Also... Mr. Hoag has been a technology investor and venture capitalist for more than 39 years, involved in numerous technology investments including Altiris (acquired by Symantec), CNET, Expedia, Facebook, Fandango (acquired by Comcast), Intuit, Sybase, Ascend Communications (acquired by Lucent Technologies), Airbnb, Peloton, and Zillow. Mr. Hoag is on the Investment Advisory Committee at the University of Michigan, the Board of Trustees of Northwestern University, and the Board of Trust at Vanderbilt University. Previously, Mr. Hoag served on the board of directors of a number of other public and private companies, including TechTarget, Inc. from 2004-2016, Electronic Arts from 2011-2021, Prodege from 2014-2021, and TCV Acquisition Corp. from 2021-2022. Mr. Hoag holds an M.B.A. from the University of Michigan and a B.A. from Northwestern University. Career Snapshot: • Founding General Partner of TCV (Technology Crossover Ventures), a venture capital firm (since 1995) | | |
Our Directors
| Ted Sarandos | CO-CHIEF EXECUTIVE OFFICER AND PRESIDENT OF THE COMPANY AND DIRECTOR | Other Public Company Boards • Spotify Technology S.A. | | DIRECTOR SINCE: 2020 CLASS: III | AGE: 58 COMMITTEES: NONE | | | Why this director is valuable to Netflix Mr. Sarandos, as co-Chief Executive Officer, has significant executive management and leadership experience and is integral to developing corporate strategy. His in-depth knowledge about Netflix and experience in the entertainment industry provide a unique business perspective to the Board. Also... Mr. Sarandos has been responsible for all content operations since 2000, and led the Company’s transition into original content production that began in 2013 with the launch of series such as House of Cards, Arrested Development and Orange is the New Black. With more than 20 years’ experience in home entertainment, he is recognized in the industry as an innovator in film acquisition and distribution and was named one of Time Magazine’s 100 Most Influential People of 2013. He is a Henry Crown Fellow at the Aspen Institute and is Chair of the Board of Trustees for the Academy Museum of Motion Pictures, is a trustee of the American Film Institute, and on the board of Exploring the Arts. Career Snapshot: • co-Chief Executive Officer (since July 2020) and Chief Content Officer of Netflix (2000-January 2023) • Executive at video distributor ETD and Video City/West Coast video, a video rental retail chain • Producer/Executive Producer for award-winning and critically acclaimed documentaries and independent films including the Emmy-nominated Outrage and Tony Bennett: The Music Never Ends. | | |
Our Directors
| 2023 Proxy Statement | 7 |
Our Directors
Directors not standing for election:
Our Directors
| Richard Barton | INDEPENDENT DIRECTOR | Other Public Company Boards • Qurate Retail, Inc. (formerly Liberty Interactive Corporation) • Zillow Group, Inc. | | DIRECTOR SINCE: 2002 CLASS: I (EXPIRES 2024) | AGE: 55 COMMITTEES: AUDIT | | | Why this director is valuable to Netflix Having founded successful internet-based companies (including Zillow, Expedia and GlassDoor), Mr. Barton provides strategic and technical insight to the Board. In addition, Mr. Barton brings experience with respect to marketing products to consumers through the internet. Also... Mr. Barton was a venture partner at Benchmark, a venture capital firm that has been an early-stage investor in companies like Twitter, Instagram, Uber and Zillow, from 2005 until 2018. He has served on many public company boards, including Altimeter Growth Corp. from 2020-2021 and Altimeter Growth Corp. 2 from 2021-2022. Mr. Barton holds a B.S. in general engineering: industrial economics from Stanford University. Career Snapshot: • Co-founder and Chief Executive of Zillow-Group (2005-2011 and 2019-present) • Co-founder and Chairman of GlassDoor (2007-2018) • Founder and Chief Executive Officer of Expedia (1996-2003) | | |
Our Directors
| Timothy Haley | INDEPENDENT DIRECTOR | Other Public Company Boards • 2U, Inc. • ThredUp, Inc. • Zuora, Inc. | | DIRECTOR SINCE: 1998 CLASS: II (EXPIRES 2025) | AGE: 68 COMMITTEES: COMPENSATION (CHAIR) | | | Why this director is valuable to Netflix As a venture capital investor, Mr. Haley brings strategic and financial experience to the Board. He has evaluated, invested in and served as a board member on numerous companies. His executive recruiting background also provides the Board with insight into talent selection and management. Also... Mr. Haley was President of Haley Associates, an executive recruiting firm serving the high technology industry from 1986 -1998, and serves on the boards of several private companies. Mr. Haley holds a B.A. from Santa Clara University. Career Snapshot: • Managing Director, Redpoint Ventures, a venture capital firm (since 1999) • Managing Director, Institutional Venture Partners, a venture capital firm (since 1998) | | |
Our Directors
| 8 | |
Our Directors
| Leslie Kilgore | INDEPENDENT DIRECTOR | Other Public Company Boards • Pinterest, Inc. • Nextdoor Holdings, Inc. | | DIRECTOR SINCE: 2012 (INDEPENDENT SINCE 2015) CLASS: II (EXPIRES 2025) | AGE: 57 COMMITTEES: AUDIT | | | Why this director is valuable to Netflix Ms. Kilgore’s experience as a marketing executive with internet retailers and consumer product companies provides a unique business perspective and her numerous managerial positions provide strategic and operational experience to the Board. Also... As our former Chief Marketing Officer, Ms. Kilgore deeply understands the Netflix business and is able to bring years of marketing experience to the Board. She holds an M.B.A. from the Stanford University Graduate School of Business and a B.S. from The Wharton School of Business at the University of Pennsylvania. She previously served on the boards of LinkedIn Corp. and Medallia, Inc. (2015-2021), and she currently serves on the boards of several other companies. Career Snapshot: • Chief Marketing Officer of Netflix (2000-2012) • Director of Marketing at Amazon (1999-2000) • Brand manager at The Procter & Gamble Company (1992-1999) | | |
Our Directors
| Strive Masiyiwa | INDEPENDENT DIRECTOR | Other Public Company Boards • Unilever Plc | | DIRECTOR SINCE: 2020 CLASS: II (EXPIRES 2025) | AGE: 62 COMMITTEES: NOMINATING AND GOVERNANCE(1) | | | Why this director is valuable to Netflix As the Chairman and founder of Econet, a telecommunications and technology group with operations and investments in 47 countries in Africa, LatAm, Europe and Israel, Mr. Masiyiwa provides a unique international perspective to the Board. In addition, his experience in building businesses across Africa and the world provides the Company with valuable insight as it expands globally. Also... Mr. Masiyiwa serves on several international boards including Unilever Plc, National Geographic Society, Asia Society, and the Global Advisory boards of Bank of America, the Council on Foreign Relations (in the US), Stanford University, and the Prince of Wales Trust for Africa, and is a longstanding board member of the United States Holocaust Museum’s Committee on Conscience. A former board member of the Rockefeller Foundation for 15 years, he is Chairman Emeritus of the Alliance for a Green Revolution in Africa (AGRA) and African Union Special Envoy to the continent’s COVID response. He received a BSc in Electrical and Electronic Engineering from the University of Wales. Mr. Masiyiwa has received honorary doctorates from Morehouse College, Yale University, Nelson Mandela University and Cardiff University. Career Snapshot: • Founder and Executive Chairman of Econet Global (1993-Present) | | |
Our Directors
| Mr. Masiyiwa was appointed to the Nominating and Governance Committee in March 2022.(1) |
Our Directors
| 2023 Proxy Statement | 9 |
Our Directors
| Ann Mather | INDEPENDENT DIRECTOR | Other Public Company Boards • Alphabet Inc. • Blend Labs, Inc. • Bumble Inc. | | DIRECTOR SINCE: 2010 CLASS: II (EXPIRES 2025) | AGE: 63 COMMITTEES: AUDIT (CHAIR, FINANCIAL EXPERT) | | | Why this director is valuable to Netflix Ms. Mather’s experience as an executive with several major media companies provides a unique business perspective. As a former CFO and senior finance executive at major corporations, she brings more than 20 years of financial and accounting expertise to the Board. Additionally, Ms. Mather’s numerous managerial positions and service on public company boards provides strategic, operational and corporate governance experience. Also... Ms. Mather previously served on the board of Shutterfly, Inc., a photography and image-sharing company (2013-2019), Glu Mobile Inc., a publisher of mobile games (2005-2021), Airbnb, Inc., a vacation rental online marketplace company (2018-2021), and Arista Networks, Inc., a computer networking company (2013-2022). She has also been an independent trustee to the board of trustees of Dodge & Cox Funds, a mutual fund, since May 2011. She received her M.A. from Cambridge University, and is an Honorary Fellow of Sidney Sussex College Cambridge. Career Snapshot: • Executive Vice President and CFO of Pixar (1999-2004) • Executive Vice President and CFO of Village Roadshow Pictures (1999) • Various executive positions at The Walt Disney Company (1993-1999) | | |
Our Directors
| Greg Peters | CO-CHIEF EXECUTIVE OFFICER AND PRESIDENT OF THE COMPANY AND DIRECTOR | Other Public Company Boards • DoorDash Inc. • 2U, Inc. | | DIRECTOR SINCE: 2023 CLASS: I (EXPIRES 2024) | AGE: 52 COMMITTEES: NONE | | | Why this director is valuable to Netflix Mr. Peters, as co-Chief Executive Officer, has served in roles of increasing responsibility at Netflix since 2008, including Chief Operating Officer and Chief Product Officer. Mr. Peters brings to the Board a deep understanding of the Company’s business, including its technology and worldwide operations, as well as business acumen and executive leadership experience. Also... Greg previously held positions at digital entertainment software provider, Mediabolic Inc., Red Hat Network, the provider of Linux and Open Source technology, and online vendor Wine.com. He previously served on the board of Highland Transcend Partners I Corp. from 2020-2022. He holds a degree in physics and astronomy from Yale University. Career Snapshot: • co-Chief Executive Officer (since January 2023); Chief Operating Officer (July 2020-January 2023) and Chief Product Officer (2017-January 2023) and other various executive positions at Netflix • Senior Vice President of consumer electronics products for Macrovision Solutions Corp. (later renamed Rovi Corporation), a technology company | | |
Our Directors
| 10 | |
Our Directors
| Brad Smith | INDEPENDENT DIRECTOR | Other Public Company Boards • None | | DIRECTOR SINCE: 2015 CLASS: I (EXPIRES 2024) | AGE: 64 COMMITTEES: NOMINATING AND GOVERNANCE | | | Why this director is valuable to Netflix With a leading role at Microsoft, Mr. Smith brings broad business and international experience on a variety of issues, including government affairs and public policy to the Board. Mr. Smith also brings experience playing a key role in representing Microsoft externally and in leading Microsoft’s work on a number of critical issues, including privacy, security, accessibility, environmental sustainability and digital inclusion, among others, which provides additional expertise to the Board. Also... Mr. Smith has led a push for diversity within Microsoft’s legal division, advocating for increasing employment of diverse employees at the company and associated law firms. Mr. Smith holds a B.A. in international relations and economics from Princeton, a J.D. from Columbia University School of Law and also studied international law and economics at the Graduate Institute of International Studies in Geneva. Career Snapshot: • Vice Chair and President of Microsoft (since 2021); he originally joined Microsoft in 1993 • Associate and then Partner, Covington & Burling (1986-1993) | | |
Our Directors
| Anne Sweeney | INDEPENDENT DIRECTOR | Other Public Company Boards • None | | DIRECTOR SINCE: 2015 CLASS: I (EXPIRES 2024) | AGE: 65 COMMITTEES: COMPENSATION | | | Why this director is valuable to Netflix Ms. Sweeney has held various senior positions with large entertainment companies, which provided her with broad strategic and operational experience. Her experience in the entertainment industry provides a unique business perspective to the Board as Netflix builds its global internet TV network. Also... Ms. Sweeney’s entertainment experience spans more than three decades, including her oversight of Disney’s cable, broadcast and satellite properties globally for 18 years. During that time, she was charged with launching and running over 118 Disney Channels in 164 countries in 34 languages, and had oversight over various ABC properties including ABC Television Network, ABC Studios and the Disney ABC Cable Networks Group. Prior to Disney, she was CEO of FX Networks, Inc. from 1993 to 1996 and spent more than 12 years at Viacom’s Nickelodeon Network. She holds an Ed. M. From Harvard University and a B.A. from the College of New Rochelle. Career Snapshot: • Co-chair of Disney Media Networks and President of Disney/ABC Television Group (1996-2015) • Chairman and CEO of FX Networks, part of the Fox Entertainment Group/21(st) Century Fox (1993-1996) | | |
Our Directors
| 2023 Proxy Statement | 11 |
Board Skills and Experience
Board Skills and Experience Our Board believes that having a diverse mix of directors with complementary skills, experience, and expertise is important to meeting its oversight responsibility. That diversity, combined with transparent and broad access to information and exposure to management beyond the executive officers, allows the Board to exercise effective management oversight and to ensure the care of our shareholders’ interests. Below are a number of skills that our Board members bring to Netflix. If an individual is not listed under a particular attribute, it does not signify a director’s lack of ability to contribute in such area.
Board Skills and Experience
| Leadership | | | | Experience leading an enterprise scale organization, resulting in a practical understanding of organizational behavior, processes, strategic planning, and risk management. Demonstrated strengths in developing talent, planning succession, and driving change and long-term growth. | Richard Barton Mathias Döpfner Timothy Haley Reed Hastings Jay Hoag Leslie Kilgore | Strive Masiyiwa Ann Mather Greg Peters Ted Sarandos Brad Smith Anne Sweeney | | Strategy | | | | Experience and expertise in identifying and developing opportunities for long-term value creation, including experience in driving innovation, opening markets, improving operations, identifying risks, and executing successfully. | Richard Barton Mathias Döpfner Timothy Haley Reed Hastings Jay Hoag Leslie Kilgore | Strive Masiyiwa Ann Mather Greg Peters Ted Sarandos Brad Smith Anne Sweeney | | Finance & Accounting | | | | Management or oversight of the finance function of an enterprise, resulting in proficiency in complex financial management, capital allocation, and financial reporting processes. | Richard Barton Mathias Döpfner Timothy Haley Reed Hastings | Jay Hoag Leslie Kilgore Ann Mather Anne Sweeney | | Entertainment & Media | | | | Experience and expertise with the entertainment and media industry, resulting in a deep understanding of consumer expectations and innovations in content and delivery. | Richard Barton Mathias Döpfner Reed Hastings | Leslie Kilgore Ann Mather Ted Sarandos Anne Sweeney | | Demographic Diversity | | | | Representation of gender, ethnic, race, geographic, cultural, or other perspectives that expand the Board’s understanding of the needs and viewpoints of our members, partners, employees, governments, and other stakeholders worldwide. | Mathias Döpfner Leslie Kilgore | Strive Masiyiwa Ann Mather Anne Sweeney | | Global Business & Government Relations | | | | Expertise in global business cultures, consumer preferences, and government relations gained through local experience in international markets or senior positions overseeing public policy. | Mathias Döpfner Strive Masiyiwa Ann Mather | Greg Peters Ted Sarandos Brad Smith |
Board Skills and Experience
| 12 | |
Board Skills and Experience
| Technology | | | | Experience and expertise in technology-related business or technology functions, resulting in knowledge of how to anticipate technological trends, understand and manage technology related risks, generate disruptive innovation, and extend or create new business models. | Richard Barton Reed Hastings Jay Hoag | Strive Masiyiwa Greg Peters Brad Smith | | Marketing | | | | Experience and expertise developing strategies to grow market share, package and position product offerings, build brand awareness and equity, and enhance enterprise reputation. | Richard Barton | Leslie Kilgore Ted Sarandos | | Human Capital Management | | | | Experience and expertise related to human resource issues such as attracting and retaining talent, succession planning, engagement of employees, and the development and evolution of culture, including the alignment of culture and long-term strategy. | Timothy Haley Reed Hastings | Greg Peters Ted Sarandos |
DIRECTOR INDEPENDENCE
DIRECTOR INDEPENDENCE The Board has determined that each of Messrs. Barton, Döpfner, Haley, Hoag, Masiyiwa and Smith, and Mses. Kilgore, Mather, and Sweeney are independent under the applicable rules of the SEC and the listing standards of the Nasdaq Stock Market; therefore, every member of the Audit Committee, Compensation Committee and Nominating and Governance Committee is an independent director in accordance with those standards. In addition, the Board determined that Mr. Belmer was independent during the time he served on the Board.
DIRECTOR INDEPENDENCE
| 2023 Proxy Statement | 13 |
How We are Selected, Elected and Evaluated
How We are Selected, Elected and Evaluated
Consideration of Director Nominees
Consideration of Director Nominees
Director Qualifications
Director Qualifications In discharging its responsibilities to nominate candidates for election to the Board, the Nominating and Governance Committee has not specified any minimum qualifications for serving on the Board. However, the Nominating and Governance Committee endeavors to evaluate, propose and approve candidates with business experience, diversity, as well as personal skills and knowledge with respect to technology, finance, marketing, financial reporting and any other areas that may be expected to contribute to an effective Board. With respect to diversity, the committee may consider such factors as diversity in viewpoint, professional experience, education, international experience, skills and other individual qualifications and attributes that contribute to board heterogeneity, including characteristics such as gender, race, and national origin.
Identifying and Evaluating Nominees for Directors
Identifying and Evaluating Nominees for Directors The Nominating and Governance Committee utilizes a variety of methods for identifying and evaluating nominees for director. Candidates may come to the attention of the Nominating and Governance Committee through management, current Board members, stockholders or other persons. These candidates are evaluated at meetings of the Nominating and Governance Committee as necessary and discussed by the members of the Nominating and Governance Committee from time to time. Candidates may be considered at any point during the year. The Nominating and Governance Committee considers properly submitted stockholder nominations for candidates for the Board. Following verification of the stockholder status of persons proposing candidates, recommendations are aggregated and considered by the Nominating and Governance Committee. If any materials are provided by a stockholder in connection with the nomination of a director candidate, such materials are forwarded to the Nominating and Governance Committee. The Nominating and Governance Committee also reviews materials provided by professional search firms or other parties in connection with a nominee who is not proposed by a stockholder.
How We are Paid
How We are Paid Our directors do not receive cash for services they provide as directors or members of Board committees but may be reimbursed for their reasonable expenses for attending Board and Board committee meetings. Each non-employee director receives stock options pursuant to the Director Equity Compensation Plan. The Director Equity Compensation Plan provides for a monthly grant of stock options to each non-employee director of the Company in consideration for services provided to us and subject to the terms and conditions of our equity compensation plans. We believe that for our Company, compensating directors only with options is appropriate and creates the right incentives and long-term value alignment with stockholders. Without long-term value creation, directors are not compensated as the intrinsic value of options on dates of grant is zero. The actual number of options granted each month to each of our directors is determined by the following formula: $25,000 / ([fair market value on the date of grant] x 0.40). Each monthly grant is made on the first trading day of the month, is fully vested upon grant and is exercisable at a strike price equal to the fair market value on the date of grant. The table below sets forth information concerning the compensation of our non-employee directors during 2022. Compensia, Inc. (“Compensia”) annually advises the Board on our Board compensation program for the upcoming year, based on a comparison against our peer group’s board compensation programs and other compensation-related developments. We have not made any changes to the compensation program for our Board since 2016. The following table summarizes the compensation paid to all Board members for the year ended December 31, 2022, other than Reed Hastings and Ted Sarandos whose compensation is reflected in the Summary Compensation Table:
How We are Paid
| Name | Option Awards ($)(1) | Total ($) | | Richard N. Barton | 436,057 | 436,057(2) | | Rodolphe Belmer(3) | 357,237 | 357,237(4) | | Mathias Döpfner | 436,017 | 436,017(5) | | Timothy M. Haley | 436,057 | 436,057(6) | | Jay C. Hoag | 436,057 | 436,057(7) | | Leslie Kilgore | 436,057 | 436,057(8) | | Strive Masiyiwa | 436,017 | 436,017(9) | | Ann Mather | 436,057 | 436,057(10) | | Bradford L. Smith | 436,057 | 436,057(11) | | Anne M. Sweeney | 436,057 | 436,057(12) |
How We are Paid
| Option awards reflect the monthly grant of stock options to each non-employee director on the dates and at the aggregate grant date fair values computed in accordance with FASB ASC Topic 718 as shown below. Only options to purchase whole shares are granted with any remaining amount of the grant value carried over to the next monthly grant. The differences in option award values for each of Messrs. Döpfner and Masiyiwa reflect the different carryover amounts relating to the appointment month for each director. For a discussion of the assumptions made in the valuation reflected in the Option Awards column, refer to Note 9 to our consolidated financial statements for the fiscal year ended December 31, 2022 in our Form 10-K filed with the SEC on January 26, 2023.(1) |
How We are Paid
| 2023 Proxy Statement | 23 |
How We are Paid
| Grant Date | Fair Value ($) | | 1/3/2022 | 31,014 | | 2/1/2022 | 30,739 | | 3/1/2022 | 30,942 | | 4/1/2022 | 37,111 | | 5/2/2022 | 36,926 | | 6/1/2022 | 36,969 | | 7/1/2022 | 37,924 | | 8/2/2022 | 38,056 | | 9/1/2022 | 37,862 | | 10/3/2022 | 39,569 | | 11/1/2022 | 39,495 | | 12/1/2022 | 39,450 |
How We are Paid
| Aggregate number of option awards outstanding held by Mr. Barton at December 31, 2022 was 35,545.(2) |
How We are Paid
| Mr. Belmer served on the Board through October 27, 2022.(3) |
How We are Paid
| Aggregate number of option awards outstanding held by Mr. Belmer at December 31, 2022 was 7,797.(4) |
How We are Paid
| Aggregate number of option awards outstanding held by Mr. Döpfner at December 31, 2022 was 8,787.(5) |
How We are Paid
| Aggregate number of option awards outstanding held by Mr. Haley at December 31, 2022 was 41,495.(6) |
How We are Paid
| Aggregate number of option awards outstanding held by Mr. Hoag at December 31, 2022 was 15,907.(7) |
How We are Paid
| Aggregate number of option awards outstanding held by Ms. Kilgore at December 31, 2022 was 15,374.(8) |
How We are Paid
| Aggregate number of option awards outstanding held by Mr. Masiyiwa at December 31, 2022 was 4,133.(9) |
How We are Paid
| Aggregate number of option awards outstanding held by Ms. Mather at December 31, 2022 was 19,726.(10) |
How We are Paid
| Aggregate number of option awards outstanding held by Mr. Smith at December 31, 2022 was 27,541.(11) |
How We are Paid
| Aggregate number of option awards outstanding held by Ms. Sweeney at December 31, 2022 was 12,374.(12) |
How We are Paid
| 24 | |
Agreements with Directors and Executive Officers
Agreements with Directors and Executive Officers We have entered into indemnification agreements with each of our directors and executive officers. These agreements require us to indemnify such individuals, to the fullest extent permitted by Delaware law, for certain liabilities to which they may become subject as a result of their affiliation with us.
Key Changes to the 2023 Compensation Program
Key Changes to the 2023 Compensation Program At the time of the Say-on-Pay vote in 2022, the Compensation Committee had already approved the design of our 2022 executive compensation program. As such, all changes to the compensation program are for 2023. The following compensation program changes apply to our co-Chief Executive Officers, Ted Sarandos and Greg Peters, and Executive Chairman, Reed Hastings: (1) a minimum 50% allocation of their allocatable compensation to stock options, (2) a salary cap of $3 million, in the case of the co-Chief Executive Officers, (3) the introduction of an annual performance-based cash bonus program (the “Bonus Program”) under the Company’s Amended and Restated Performance Bonus Plan (the “Bonus Plan”) and (4) stock options granted to the co-Chief Executive Officers and our Executive Chairman will be subject to a one-year vesting period.
Key Changes to the 2023 Compensation Program
The Bonus Program aims to align pay for performance, by awarding cash bonuses only upon the achievement of defined performance targets. We believe this aligns our co-Chief Executive Officers’ compensation with the Company’s financial performance and the interests of our stockholders. The Compensation Committee administers the Bonus Program, including determining the cash bonus amounts, financial performance periods, performance metrics and other criteria. The portion of the allocatable compensation not allocated to stock options and in excess of the applicable salary cap is subject to the Bonus Program. In 2023, Mr. Sarandos and Mr. Peters are participating in the Bonus Program. Mr. Hastings is not participating in the Bonus Program because, in connection with his transition to Executive Chairman, his allocatable compensation was reduced to $3 million, of which $2.5 million was allocated to stock options. Following this transition and related reduction in compensation, total allocatable compensation for Messrs. Hastings, Sarandos and Peters as a group decreased by $21 million or 21% year over year. During the first quarter of 2023, the Compensation Committee chose FX neutral revenue and FX neutral operating margin achieved in the fiscal year ending December 31, 2023 as the financial performance metrics for the 2023 Bonus Program. The Compensation Committee set targets at levels it considered to be appropriately rigorous for the year, including requiring growth in revenue compared to the prior year. Additional information regarding 2023 executive compensation, including the 2023 Bonus Program and the specific targets they were measured against, will be included in our proxy statement for our 2024 annual shareholders’ meeting. Following the completion of the 2023 fiscal year, the Compensation Committee will certify the Company’s actual performance and determine the bonuses payable to Mr. Sarandos and Mr. Peters. In making these changes, the Compensation Committee sought to maintain some personal choice – which it continues to believe is a differentiating feature that is core to our talent attraction and retention strategy – while also being responsive to shareholder concerns. This is achieved by allowing the executive officers continued flexibility to choose among cash salary and stock options, and in the case of the co-Chief Executive Officers, the annual performance-based cash bonus within the new parameters introduced. The Compensation Committee considered and determined that for 2023, it would maintain the compensation program for the remaining Named Executive Officers to maximize flexibility and personal choice and to remain competitive in attracting and retaining top talent. The Compensation Committee will continue to set a dollar-denominated annual compensation amount for each Named Executive Officer (“allocatable compensation”), who can then choose to allocate a portion of that compensation amount toward stock options or cash compensation.
Key Changes to the 2023 Compensation Program
| WHAT WE HEARD FROM SHAREHOLDERS | HOW WE RESPONDED | | Executives’ ability to choose between cash and stock options Shareholders expressed concern that the executives have the ability to choose between cash and stock options and could potentially take all their compensation in cash. | Salary Cap for the co-Chief Executive Officers For the 2023 compensation year, the co-Chief Executive Officers will have a $3 million salary cap. Minimum Stock Option Allocation for the co-Chief Executive Officers and Executive Chairman We will require the co-Chief Executive Officers and Executive Chairman to allocate at least 50% of their allocatable compensation to stock options. | | Lack of traditional performance-based compensation Shareholders expressed concern that there was not a performance-based component of compensation. | Performance Bonus Program We have adopted an annual performance-based cash bonus program, in which the co-Chief Executive Officers and Executive Chairman are eligible to participate. The portion of the allocatable compensation that is not allocated to stock options and that is in excess of the applicable salary cap is required to be subject to the Bonus Program, and therefore such amounts will be at risk and subject to the achievement of objective financial metrics. |
Key Changes to the 2023 Compensation Program
| WHAT WE HEARD FROM SHAREHOLDERS | HOW WE RESPONDED | | Lack of vesting criteria for options Shareholders expressed concern that stock options were immediately vested. | One-Year Vesting Period for Stock Options Granted to the co-Chief Executive Officers and Executive Chairman in 2023 and Minimum Stock Option Allocation Beginning with the 2023 compensation year, the options granted to the co-Chief Executive Officers and Executive Chairman will be subject to a one-year vesting period. The co-Chief Executive Officers and Executive Chairman must also allocate at least 50% of their allocatable compensation to stock options. Our option grant formula requires 40% stock price appreciation from the date of grant before an executive breaks even with the foregone cash compensation. In practice, our methodology serves as de facto vesting criteria because it requires meaningful performance improvement before it is worthwhile to exercise the options. |
2022 Compensation Program Overview
| • | Salary and stock options. Our compensation program in 2022 consisted of only base salary and stock options. It was the same program for our executive officers as it is for the majority of our employees. We used stock options as we believe that they correlate compensation with stockholder returns, and encourage a long-term perspective aligned with investors. Further, especially given how we’ve designed the stock option allocation portion of our program in which employees can allocate cash compensation toward stock options, we believe our compensation program encourages employees to take on an investor mindset. Importantly, as described below, our stock price needs to appreciate more than 40% before the employee is better off allocating cash to stock options. |
2022 Compensation Program Overview
| • | Monthly Grants. We grant stock options on the first trading day of each month with the number of options granted based on the closing stock price on that trading day (see formula below). We believe granting options monthly produces a dollar cost averaging effect—unlike annual grants which are more subject to the vagaries of the market—which helps reduce the potential negative impacts with employee distraction and morale. |
2022 Compensation Program Overview
| • | Objective and Transparent Stock Option Grant Formula. The number of monthly stock options granted is determined by the following formula: |
2022 Compensation Program Overview
| (the amount of an employee’s total annual stock option allocation/12) | | (the closing trading price of a share of our stock on the grant date x 0.40) |
2022 Compensation Program Overview
For example: If our stock price is $300 on the date of grant and the recipient allocated $1,200 per month of their allocatable compensation to stock options, the recipient would receive 10 stock options with an exercise price of $300.
2022 Compensation Program Overview
The chart below demonstrates how this options formula necessitates meaningful performance for employees to realize value by illustrating the relationship between the value of $1,200 worth of compensation if the employee elects cash (the red line), compared to 10 stock options under our program (the green line). In 2022, each Named Executive Officer elected to allocate a portion of their annual compensation to our stock option program. Reed Hastings, our co-Chief Executive Officer in 2022 allocated 98% of his annual compensation toward our stock option program, Ted Sarandos, our co-Chief Executive Officer allocated 50% of his annual compensation toward our stock option program, and the average election across our Named Executive Officers was 48%.
2022 Compensation Program Overview
| • | Vested 10-year Stock Options. In 2022, we granted fully vested 10-year stock options, which means that employees have 10 years from the date of grant to exercise their options. We believe a 10-year option life is important to encourage participation in the equity portion of our compensation program and reinforce a long-term focus. As the options must increase by 40% from the date of grant before they break even with the traded cash, as a practical matter, it takes time before it is worthwhile for an employee to exercise their vested options. We believe this serves as de facto vesting criteria and aligns employees’ and stockholders’ interests. We do not believe that forced exercise upon termination creates a healthy environment or secures a high-performing workforce. We want our employees to stay at Netflix because they are passionate about their roles and want to help Netflix be successful in the long run. |
Role of the compensation consultant
Role of the compensation consultant In determining compensation for 2022, the Compensation Committee retained Compensia, a national compensation consulting firm, as its independent compensation consultant to advise on executive and director compensation matters. Compensia provided various services to the Compensation Committee during 2022, including the review, analysis and update of our compensation peer group; the review and analysis of our Named Executive Officer compensation against competitive market data based on the companies in our compensation peer group; the analysis of potential executive compensation program changes for 2023; the review and analysis of our non-employee director compensation; and support on other ad hoc matters. The Compensation Committee has assessed the independence of Compensia taking into account, among other things, the factors set forth in Exchange Act Rule 10C-1 and the Nasdaq listing standards, and concluded that no conflict of interest exists with respect to the work that Compensia performs for the Compensation Committee.
Peer group and benchmarking
Peer group and benchmarking The Compensation Committee works with Compensia in determining an appropriate peer group of companies each year. After review of the criteria used to evaluate current and potential peer companies, no changes were made to the peer group from 2021. We retained Warner Bros. Discovery following Discovery, Inc.’s combination with AT&T’s WarnerMedia business. The compensation peer group for 2022 was composed of the following companies:
2022 Netflix Peer Group
2022 Netflix Peer Group
2022 Netflix Peer Group
| Activision Blizzard, Inc. | Oracle Corporation | | Adobe, Inc. | PayPal Holdings, Inc. | | AT&T Inc. | Paramount Global | | Booking Holdings Inc. | Salesforce, Inc. | | Charter Communications, Inc. | Sirius XM Holdings, Inc. | | Comcast Corporation | Tesla, Inc. | | DISH Network Corporation | The Walt Disney Company | | Electronic Arts Inc. | Verizon Communications Inc. | | Mastercard Incorporated | Visa Inc. | | Meta Platforms, Inc. | Warner Bros. Discovery |
2022 Netflix Peer Group
With respect to each of our Named Executive Officers, in determining compensation, the Compensation Committee considered our compensation philosophy as described above, comparative market data and specific factors relative to each Named Executive Officer’s responsibilities and performance. We do not specifically benchmark compensation for our Named Executive Officers in terms of picking a particular percentile relative to other individuals with similar titles at peer group companies. The Compensation Committee believes that many subjective factors unique to each Named Executive Officer’s responsibilities and performance are not adequately reflected or otherwise accounted for in a percentile-based compensation determination.
Elements of Executive Compensation
Elements of Executive Compensation For 2022 compensation, we used only salary and stock options, augmented by very limited perquisites, to compensate our Named Executive Officers. Across the broader employee base, we also use salary and stock options as our key compensation components to remain competitive within the marketplace. Similarly situated companies typically offer employees an equity component as part of their overall compensation package and as such, we believe it is important to provide this opportunity to our employees, including our Named Executive Officers. By permitting employees to request a customized combination of salary and stock options, we endeavor to tailor individuals’ compensation to their personal compensation preferences and thereby offer a more compelling compensation package than those with whom we compete for talent.
Stock Options
Stock Options We believe that equity ownership, including stock and stock options, helps align the interest of our Named Executive Officers with those of our stockholders and links executive compensation to long-term Company performance. Furthermore, because the stock options are granted at the fair market value of our common stock on the date of the option grant and are not generally transferable, they are only of value to the recipient if the market value of our common stock increases after the date of grant, thereby directly linking compensation in the form of stock options to Company performance. Granting options on a monthly basis provides employees with a “dollar-cost averaging” approach to the price of their option grants. By granting options each month rather than on a less frequent basis, we believe it alleviates to a great extent the arbitrariness of option grant timing and the potential negative employee issues associated with “underwater” options. Stock options granted in 2022 were vested upon grant and are exercisable for up to ten years following grant regardless of employment status. As discussed above, the stock price needs to appreciate at least 40% before an employee is better off allocating cash to stock options. We believe this serves as de facto vesting criteria and aligns employees’ and stockholders’ interests. We believe that the ten-year life of the options enhances their value for each employee and thereby encourages equity ownership in the Company, which is helpful in aligning employee and stockholder interests. We do not believe that expiration of options closely following employment termination has a desirable impact on employee retention. Rather, we believe that creating and maintaining a high-performance culture and providing highly competitive compensation packages are the critical components for retaining employees, including our Named Executive Officers. Empirically, stock options have proven to be an effective way of creating long-term alignment between executives and stockholders. Even though the options are vested upon grant, our Named Executive Officers often do not exercise their options for an extended period of time.
Executive Compensation Allocations for 2022
19% year-over-year growth from 2020. Our profitability also improved in 2021, with operating income rising 35% year-over-year while operating margins increased from 18% to 21% compared to 2020. We also invested heavily in content with great success. Some of the biggest hits in 2021 included new series like Squid Game, Maid and Lupin, and returning shows such as The Witcher, You, La Casa de Papel (aka Money Heist), and Sex Education, as well as films like Red Notice and Don’t Look Up. In 2021, we also added mobile games to our service. In 2022, we permitted our Named Executive Officers to allocate their compensation between cash and stock options. Our Named Executive Officers continue to express their confidence in the Company and our growth strategy by electing to receive a significant percentage of their compensation through at-risk stock option awards. These elections are made prior to the compensation year and are irrevocable. For 2022, the following elections were made by our Named Executive Officers:
Executive Compensation Allocations for 2022
| Named Executive Officer(1) | Allocatable Compensation ($) | Amount of Allocatable Compensation Elected to be received as Stock Options (%) | Amount of Allocatable Compensation Elected to be received as Cash Salary (%) | | Reed Hastings, co-Chief Executive Officer, President, Chairperson of the Board | 34,650,000 | 98.1 | 1.9 | | Ted Sarandos, co-Chief Executive Officer and Chief Content Officer | 40,000,000 | 50.0 | 50.0 | | Greg Peters, Chief Operating Officer and Chief Product Officer | 24,000,000 | 33.3 | 66.7 | | Spencer Neumann, Chief Financial Officer | 14,000,000 | 50.0 | 50.0 | | David Hyman, Chief Legal Officer | 11,000,000 | 45.5 | 54.5 | | Rachel Whetstone, Chief Communications Officer | 6,500,000 | 15.4 | 84.6 |
Executive Compensation Allocations for 2022
| • | for Mr. Neumann, consideration was given to competitive market compensation paid by other similarly-situated companies and that the Compensation Committee did not increase his compensation in 2021. The Compensation Committee also considered |
Executive Compensation Allocations for 2022
| • | for Mr. Hyman, consideration was given to competitive market compensation paid by other similarly-situated companies and that the Compensation Committee did not increase his compensation in 2021. The Compensation Committee also considered his performance in managing and developing a global legal and public policy function. His allocatable compensation was increased from $9,450,000 to $11,000,000 for 2022. |
Executive Compensation Allocations for 2022
| • | for Ms. Whetstone, consideration was given to competitive market compensation paid by other similarly-situated companies and that the Compensation Committee did not increase her compensation in 2021. The Compensation Committee also considered her deep knowledge and international experience in leading global communications. Her allocatable compensation was increased from $5,250,000 to $6,500,000 for 2022. |
Executive Compensation Allocations for 2022
| Name and Position(1) | 2022 Total Annual Stock Option Allocation, with 1/12 granted monthly ($)(2) | 2022 Annual Cash Salary ($) | | Reed Hastings, co-Chief Executive Officer, President, and Chairperson of the Board | 34,000,000 | 650,000 | | Ted Sarandos, co-Chief Executive Officer and Chief Content Officer | 20,000,000 | 20,000,000 | | Greg Peters, Chief Operating Officer and Chief Product Officer | 8,000,000 | 16,000,000 | | Spencer Neumann, Chief Financial Officer | 7,000,000 | 7,000,000 | | David Hyman, Chief Legal Officer | 5,000,000 | 6,000,000 | | Rachel Whetstone, Chief Communications Officer | 1,000,000 | 5,500,000 |
Executive Compensation Allocations for 2022
| The dollar amounts set forth in this column are different than the amounts in the “Option Awards” column of the Summary Compensation Table. The difference arises as the stock option allocation in the table above is the amount used to determine the number of options granted, whereas the dollar values of stock option grants in the Summary Compensation Table reflects their grant date fair value under generally accepted accounting principles in the U.S.(2) |
Method for determining monthly stock option grants
Method for determining monthly stock option grants After the total annual stock option allocation is established, our Named Executive Officers receive monthly option grants pursuant to our monthly stock option program, which is applicable to the majority of our employees. Under this program, eligible employees, including our Named Executive Officers, receive on the first trading day of the month fully vested options granted at fair market value as reflected by the closing price of our stock on the date of the option grant. The number of stock options granted monthly fluctuates based on the closing price of our stock on the date of the option grant. In 2022, the actual number of options granted to our Named Executive Officers each month was determined by the following formula: (The amount of an employee’s total annual stock option allocation/12) / ([the closing price of our stock on the date of option grant] x 0.40). For stock option accounting purposes, the dollar values of stock options granted by the Company, as reflected in the Summary Compensation Table are different than the dollar values of the total annual stock option allocation in the table above. The difference arises as the stock option allocation in the table above is the amount used to determine the number of options granted, whereas the dollar values of stock option grants in the Summary Compensation Table reflects their grant date fair value under generally accepted accounting principles in the U.S.
Method for determining monthly stock option grants
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Termination-Based Compensation and Change in Control Retention Incentives
Termination-Based Compensation and Change in Control Retention Incentives Our Named Executive Officers are beneficiaries of our Severance Plan. Under this Severance Plan, each employee of the Company at the level of Vice President or higher (“Covered Executive”) is entitled to a severance benefit upon termination of employment (other than for cause, death or permanent disability) so long as they sign a waiver and release of claims in a form reasonably satisfactory to the Company. In 2022, the severance benefit consisted of a lump sum cash payment equal to 12 months of allocatable compensation, or, for newly-hired Covered Executives only, a cash payment equal to 36 months of allocatable compensation, which is reduced by an amount equal to one month of allocatable compensation for each month of tenure at the Company for the first 24 months of continuous employment following hire by the Company, such that the minimum benefit for such newly hired Covered Executives is the cash equivalent of 12 months of allocatable compensation. The Severance Plan also provides discretion to the plan administrator to provide a severance benefit that is different than the standard 12 months of allocatable compensation, so long as
Termination-Based Compensation and Change in Control Retention Incentives
| 2023 Proxy Statement | 49 |
Termination-Based Compensation and Change in Control Retention Incentives
the benefit is no less than 12 months. The right to receive a severance benefit terminates upon a change in control transaction, so that the Covered Executives under the Severance Plan are not entitled to both a change in control benefit as well as a severance benefit. In lieu of the severance benefit described above, the Severance Plan provides that eligible employees covered by the Severance Plan who are employed by the Company on the date of a change in control transaction are entitled to receive a lump sum cash payment equal to 12 months of allocatable compensation regardless of whether their employment terminates. We have a “single trigger” change in control benefit for our executive officers. We use a single trigger change in control benefit because we believe that double trigger benefits, which require the occurrence of both a change in control and the executive’s termination of service from the Company for an executive to receive severance, creates a misaligned incentive for executives to attempt to be terminated from the Company in the event of a change in control. We would rather encourage our executives to continue to focus on the long-term success of the Company and retain their service with the Company instead of their individual severance opportunities. The benefits owing under the Severance Plan are to be paid to an individual covered under the applicable plan by the Company as soon as administratively practicable following the completion of all conditions to the payment, but in no event more than two and one half months following the date of the triggering event. We believe that benefits under the Severance Plan are consistent with similar benefits offered to executive officers of similarly situated companies and moreover, the Severance Plan is an important mechanism for attracting and retaining outstanding performers. Each of the terms “allocatable compensation,” “cause” and “change in control” are defined in the Severance Plan, a copy of which is attached as Exhibit 10.1 to the Company’s Form 10-Q filed on April 21, 2023. The Bonus Plan provides for a prorated bonus in the event of an involuntary termination (other than for cause) based on the number of calendar days a participant was actively employed during a given performance period. Each of the terms “cause,” “participant” and “performance period” are defined in the Bonus Plan, a copy of which is attached as Exhibit 10.1 to the Company’s Form 8-K filed on December 9, 2022.
Tax Considerations
Tax Considerations Section 162(m) of the Internal Revenue Code (“Section 162(m)”) was among the provisions that were amended pursuant to The Tax Cuts and Jobs Act (the “Tax Act”), which was signed into law on December 22, 2017. The prior version of Section 162(m) generally disallowed a tax deduction for compensation that we paid to our Chief Executive Officer or any of the next three most highly compensated executive officers (excluding the Chief Financial Officer) to the extent that the compensation for any such individual exceeded $1 million in any taxable year. However, this deduction limitation did not apply to compensation that was “performance-based” under Section 162(m). The Tax Act amended Section 162(m) to eliminate the exception for performance-based compensation. As a result, effective for our 2018 fiscal year and thereafter, the maximum U.S. federal income tax deduction that we may receive for annual compensation paid to any officer covered by Section 162(m) is $1 million per officer, subject to a transition rule that is described below. The Tax Act also expanded the individuals covered by Section 162(m), which now includes the Chief Executive Officer, Chief Financial Officer, the three most highly compensated officers and any former covered employee for any taxable year beginning after December 31, 2016. Separately, the Tax Act included a transition rule with respect to compensation that is provided pursuant to a written binding contract in effect on November 2, 2017 and not materially modified after that date. We continued to grant stock options in 2022, although the compensation income recognized upon exercise of such grants by individuals covered by Section 162(m) will not be deductible by us to the extent the total compensation for each such individual exceeds $1 million in the year in which the stock options are exercised. Additionally, cash payments made under the Bonus Plan to individuals covered by Section 162(m) will not be deductible by us to the extent that the total compensation for each such individual exceeds $1 million in the applicable year. The Compensation Committee considers the tax impact of the Company’s compensation program, and will generally seek to preserve the deductibility of any performance-based compensation that is subject to the transition rule of the Tax Act, to the extent practicable and in the best interests of the Company and its stockholders. However, to maintain the flexibility to provide compensation programs for our Named Executive Officers that will best incentivize them to achieve our key business objectives, the Compensation Committee reserves the right to pay compensation that is not tax deductible.
Summary Compensation Table
Summary Compensation Table The following Summary Compensation Table sets forth information concerning the compensation paid to our Named Executive Officers in 2022, 2021, and 2020. A description of the method for determining the amount of salary in proportion to total compensation is set forth above in “Compensation Discussion and Analysis.”
Summary Compensation Table
| Name and Principal Position(1) | Year | Salary ($) | Option Awards ($)(2) | All Other Compensation ($)(3) | Total ($) | | REED HASTINGS co-Chief Executive Officer, President, and Chairperson of the Board | 2022 | 650,000 | 49,408,182 | 1,015,055(4) | 51,073,237 | | | 2021 | 650,000 | 39,731,118 | 442,607(4) | 40,823,725 | | | 2020 | 650,000 | 42,428,87 | 147,146(4) | 43,226,024 | | TED SARANDOS co-Chief Executive Officer and Chief Content Officer | 2022 | 20,000,000 | 28,512,519 | 1,786,777(5) | 50,299,296 | | | 2021 | 20,000,000 | 17,119,501 | 1,112,663(6) | 38,232,164 | | | 2020 | 20,000,000 | 18,304,124 | 1,014,127(7) | 39,318,251 | | GREG PETERS Chief Operating Officer and Chief Product Officer | 2022 | 16,000,000 | 11,512,000 | 617,263(8) | 28,129,263 | | | 2021 | 12,000,000 | 8,063,284 | 308,109(9) | 20,371,393 | | | 2020 | 12,000,000 | 8,664,337 | 141,658(10) | 20,805,995 | | SPENCER NEUMANN Chief Financial Officer | 2022 | 7,000,000 | 10,022,952 | 38,537(11) | 17,061,489 | | | 2021 | 6,000,000 | 6,480,431 | 30,265(12) | 12,510,696 | | | 2020 | 6,050,000 | 6,865,017 | 24,134(13) | 12,939,151 | | DAVID HYMAN Chief Legal Officer | 2022 | 6,000,000 | 7,237,681 | 12,971(14) | 13,250,652 | | | 2021 | 4,725,000 | 5,440,831 | 11,742(15) | 10,177,573 | | | 2020 | 5,500,000 | 4,956,023 | 13,324(16) | 10,469,347 | | RACHEL WHETSTONE Chief Communications Officer | 2022 | 5,500,000 | 1,401,707 | 2,799(17) | 6,904,506 | | | 2021 | 4,750,000 | 579,116 | 302(18) | 5,329,418 | | | 2020 | 4,800,000 | 555,929 | 170(18) | 5,356,099 |
Summary Compensation Table
| Titles reflect the positions held by each Named Executive Officer on December 31, 2022.(1) |
Summary Compensation Table
| Dollar amounts in the Option Awards column reflect the grant date fair value with respect to stock options during the respective fiscal year, computed in accordance with FASB ASC Topic 718. The dollar amounts set forth in the Option Awards column are different than the stock option allocation amounts described in the section above entitled “Compensation Discussion and Analysis” because the stock option allocation amounts in such section are reflective of the total compensation amount attributable to stock option grants, rather than the accounting valuation. For a discussion of the assumptions made in the valuation reflected in the Option Awards column, refer to Note 9 to the Company’s consolidated financial statements for the fiscal year ended December 31, 2022 in our Form 10-K filed with the SEC on January 26, 2023.(2) |
Summary Compensation Table
| We permit our Named Executive Officers and their family members and guests to use our corporate aircraft for personal use. Personal use of company aircraft is calculated based upon our actual aggregate incremental cost to operate the aircraft, including fuel, engine maintenance programs, landing and handling fees, and crew travel costs, as well as other variable costs.(3) |
Summary Compensation Table
| Includes $1,014,843, $442,607, and $147,146 for personal use of company aircraft in 2022, 2021, and 2020, respectively, as well as $212 for car services in 2022.(4) |
Summary Compensation Table
| Includes $12,200 representing our matching contribution made under our 401(k) plan, $11,299 for car services, $336,148 for personal use of company aircraft, and $1,427,129 in residential security costs paid to a third-party provider by the Company valued on the basis of aggregate incremental cost to the Company. The Compensation Committee approved the residential security costs after considering the potential security concerns related to Mr. Sarandos’s service as an executive officer and believes the security costs are a necessary and appropriate business expense.(5) |
Summary Compensation Table
| Includes $11,600 representing our matching contribution made under our 401(k) plan, $16,353 for car services, $192,137 for personal use of company aircraft, and $892,573 in residential security costs paid to a third-party provider by the Company valued on the basis of aggregate incremental cost to the Company.(6) |
Summary Compensation Table
| Includes $11,400 representing our matching contribution made under our 401(k) plan, $7,639 for car services, and $995,088 in residential security costs paid to a third-party provider by the Company valued on the basis of aggregate incremental cost to the Company.(7) |
Summary Compensation Table
| Includes $510,375 for personal use of company aircraft, $1,579 for car services, and $49,864 in tax penalties arising from Mr. Peters’ prior expatriate assignment and $55,445 in related tax gross-up.(8) |
Summary Compensation Table
| Includes $308,109 for personal use of company aircraft.(9) |
Summary Compensation Table
| Includes $140,394 for personal use of company aircraft and $1,264 for commuting expenses.(10) |
Summary Compensation Table
| Includes $12,200 representing our matching contribution made under our 401(k) plan, $6,563 for personal use of company aircraft and $19,774 for car services.(11) |
Summary Compensation Table
| 54 | |
Summary Compensation Table
| Includes $11,600 representing our matching contribution made under our 401(k) plan, $8,305 for personal use of company aircraft and $10,359 for car services.(12) |
Summary Compensation Table
| Includes $14,581 representing our matching contribution made under our 401(k) plan, $2,174 for personal use of company aircraft and $7,379 for car services.(13) |
Summary Compensation Table
| Includes $12,200 representing our matching contribution made under our 401(k) plan and $771 for commuting expenses.(14) |
Summary Compensation Table
| Includes $11,600 representing our matching contribution made under our 401(k) plan and $142 for car services.(15) |
Summary Compensation Table
| Includes $11,400 representing our matching contribution made under our 401(k) plan, $1,664 for commuting expenses and $260 for car services.(16) |
Summary Compensation Table
| Includes $2,799 for personal use of company aircraft.(17) |
Summary Compensation Table
| Includes $302 and $170 for car services in 2021 and 2020, respectively.(18) |
Grants of Plan-Based Awards
Grants of Plan-Based Awards The following table sets forth information concerning grants of awards made to the Named Executive Officers during 2022. As described above in “Compensation Discussion and Analysis,” we grant eligible employees, including the Named Executive Officers, fully vested stock options on a monthly basis. These stock options can generally be exercised up to 10 years following the date of grant, regardless of employment status. These are the only type of equity awards made to the Named Executive Officers. The material terms of these stock option grants, including the formula for determining the number of stock options to be granted, are set forth above in the “Compensation Discussion and Analysis.”
Grants of Plan-Based Awards
| Name | Grant Date | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) | | Reed Hastings | 1/3/2022 | 11,858 | 597.37 | 3,502,445 | | | 2/1/2022 | 15,495 | 457.13 | 3,502,255 | | | 3/1/2022 | 18,340 | 386.24 | 3,502,895 | | | 4/1/2022 | 18,966 | 373.47 | 4,189,532 | | | 5/2/2022 | 35,513 | 199.46 | 4,189,646 | | | 6/1/2022 | 36,718 | 192.91 | 4,189,556 | | | 7/1/2022 | 39,363 | 179.95 | 4,302,037 | | | 8/1/2022 | 31,313 | 226.21 | 4,302,002 | | | 9/1/2022 | 30,792 | 230.04 | 4,302,051 | | | 10/3/2022 | 29,632 | 239.04 | 4,475,246 | | | 11/1/2022 | 24,702 | 286.75 | 4,475,286 | | | 12/1/2022 | 22,348 | 316.95 | 4,475,224 | | Ted Sarandos | 1/3/2022 | 5,109 | 597.37 | 1,509,022 | | | 2/1/2022 | 9,115 | 457.13 | 2,060,216 | | | 3/1/2022 | 10,788 | 386.24 | 2,060,482 | | | 4/1/2022 | 11,157 | 373.47 | 2,464,547 | | | 5/2/2022 | 20,890 | 199.46 | 2,464,497 | | | 6/1/2022 | 21,599 | 192.91 | 2,464,465 | | | 7/1/2022 | 23,155 | 179.95 | 2,530,642 | | | 8/1/2022 | 18,419 | 226.21 | 2,530,532 | | | 9/1/2022 | 18,113 | 230.04 | 2,530,627 | | | 10/3/2022 | 17,431 | 239.04 | 2,632,560 | | | 11/1/2022 | 14,530 | 286.75 | 2,632,414 | | | 12/1/2022 | 13,146 | 316.95 | 2,632,508 |
Grants of Plan-Based Awards
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Grants of Plan-Based Awards
| Name | Grant Date | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) | | Greg Peters | 1/3/2022 | 2,406 | 597.37 | 710,649 | | | 2/1/2022 | 3,646 | 457.13 | 824,086 | | | 3/1/2022 | 4,315 | 386.24 | 824,154 | | | 4/1/2022 | 4,463 | 373.47 | 985,863 | | | 5/2/2022 | 8,356 | 199.46 | 985,799 | | | 6/1/2022 | 8,640 | 192.91 | 985,831 | | | 7/1/2022 | 9,262 | 179.95 | 1,012,256 | | | 8/1/2022 | 7,367 | 226.21 | 1,012,130 | | | 9/1/2022 | 7,245 | 230.04 | 1,012,222 | | | 10/3/2022 | 6,973 | 239.04 | 1,053,114 | | | 11/1/2022 | 5,812 | 286.75 | 1,052,965 | | | 12/1/2022 | 5,258 | 316.95 | 1,052,923 | | Spencer Neumann | 1/3/2022 | 1,936 | 597.37 | 571,827 | | | 2/1/2022 | 3,190 | 457.13 | 721,019 | | | 3/1/2022 | 3,776 | 386.24 | 721,206 | | | 4/1/2022 | 3,904 | 373.47 | 862,381 | | | 5/2/2022 | 7,313 | 199.46 | 862,751 | | | 6/1/2022 | 7,559 | 192.91 | 862,488 | | | 7/1/2022 | 8,104 | 179.95 | 885,697 | | | 8/1/2022 | 6,447 | 226.21 | 885,734 | | | 9/1/2022 | 6,340 | 230.04 | 885,782 | | | 10/3/2022 | 6,100 | 239.04 | 921,267 | | | 11/1/2022 | 5,086 | 286.75 | 921,435 | | | 12/1/2022 | 4,601 | 316.95 | 921,358 | | David Hyman | 1/3/2022 | 1,648 | 597.37 | 486,762 | | | 2/1/2022 | 2,279 | 457.13 | 515,110 | | | 3/1/2022 | 2,697 | 386.24 | 515,120 | | | 4/1/2022 | 2,789 | 373.47 | 616,081 | | | 5/2/2022 | 5,222 | 199.46 | 616,065 | | | 6/1/2022 | 5,400 | 192.91 | 616,144 | | | 7/1/2022 | 5,789 | 179.95 | 632,687 | | | 8/1/2022 | 4,605 | 226.21 | 632,667 | | | 9/1/2022 | 4,528 | 230.04 | 632,621 | | | 10/3/2022 | 4,358 | 239.04 | 658,177 | | | 11/1/2022 | 3,632 | 286.75 | 658,013 | | | 12/1/2022 | 3,287 | 316.95 | 658,227 | | Rachel Whetstone | 1/3/2022 | 174 | 597.37 | 51,393 | | | 2/1/2022 | 456 | 457.13 | 103,067 | | | 3/1/2022 | 539 | 386.24 | 102,947 |
Grants of Plan-Based Awards
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Grants of Plan-Based Awards
| Name | Grant Date | All Other Option Awards: Number of Securities Underlying Options (#) | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of Stock and Option Awards ($) | | Rachel Whetstone (continued) | 4/1/2022 | 558 | 373.47 | 123,260 | | | 5/2/2022 | 1,045 | 199.46 | 123,283 | | | 6/1/2022 | 1,080 | 192.91 | 123,228 | | | 7/1/2022 | 1,158 | 179.95 | 126,559 | | | 8/1/2022 | 921 | 226.21 | 126,533 | | | 9/1/2022 | 905 | 230.04 | 126,440 | | | 10/3/2022 | 872 | 239.04 | 131,695 | | | 11/1/2022 | 726 | 286.75 | 131,530 | | | 12/1/2022 | 658 | 316.95 | 131,765 |
Outstanding Equity Awards at Fiscal Year-End
Outstanding Equity Awards at Fiscal Year-End The following table sets forth information concerning equity awards for each Named Executive Officer that remained outstanding as of December 31, 2022. All stock options are fully vested and can generally be exercised up to 10 years following the date of grant.
Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | | Reed Hastings | 22,348 | 316.95 | 12/01/2032 | | | 24,702 | 286.75 | 11/01/2032 | | | 29,632 | 239.04 | 10/03/2032 | | | 30,792 | 230.04 | 09/01/2032 | | | 31,313 | 226.21 | 08/01/2032 | | | 39,363 | 179.95 | 07/01/2032 | | | 36,718 | 192.91 | 06/01/2032 | | | 35,513 | 199.46 | 05/02/2032 | | | 18,966 | 373.47 | 04/01/2032 | | | 18,340 | 386.24 | 03/01/2032 | | | 15,495 | 457.13 | 02/01/2032 | | | 11,858 | 597.37 | 01/03/2032 | | | 11,466 | 617.77 | 12/01/2031 | | | 10,398 | 681.17 | 11/01/2031 | | | 11,553 | 613.15 | 10/01/2031 | | | 12,169 | 582.07 | 09/01/2031 | | | 13,750 | 515.15 | 08/02/2031 | | | 13,276 | 533.54 | 07/01/2031 | | | 14,193 | 499.08 | 06/01/2031 | | | 13,913 | 509.11 | 05/03/2031 | | | 13,131 | 539.42 | 04/01/2031 |
Outstanding Equity Awards at Fiscal Year-End
| 2023 Proxy Statement | 57 |
Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | | Reed Hastings (continued) | 12,864 | 550.64 | 03/01/2031 | | | 13,141 | 539.04 | 02/01/2031 | | | 13,547 | 522.86 | 01/04/2031 | | | 14,038 | 504.58 | 12/01/2030 | | | 14,632 | 484.12 | 11/02/2030 | | | 13,428 | 527.51 | 10/01/2030 | | | 12,727 | 556.55 | 09/01/2030 | | | 14,206 | 498.62 | 08/03/2030 | | | 14,585 | 485.64 | 07/01/2030 | | | 16,631 | 425.92 | 06/01/2030 | | | 17,057 | 415.27 | 05/01/2030 | | | 19,455 | 364.08 | 04/01/2030 | | | 18,589 | 381.05 | 03/02/2030 | | | 19,786 | 358.00 | 02/03/2030 | | | 19,456 | 329.81 | 01/02/2030 | | | 20,699 | 309.99 | 12/02/2029 | | | 22,373 | 286.81 | 11/01/2029 | | | 23,802 | 269.58 | 10/01/2029 | | | 22,181 | 289.29 | 09/03/2029 | | | 20,083 | 319.50 | 08/01/2029 | | | 17,130 | 374.60 | 07/01/2029 | | | 19,061 | 336.63 | 06/03/2029 | | | 16,939 | 378.81 | 05/01/2029 | | | 17,486 | 366.96 | 04/01/2029 | | | 17,958 | 357.32 | 03/01/2029 | | | 18,881 | 339.85 | 02/01/2029 | | | 22,338 | 267.66 | 01/02/2029 | | | 20,597 | 290.30 | 12/03/2028 | | | 18,839 | 317.38 | 11/01/2028 | | | 15,676 | 381.43 | 10/01/2028 | | | 16,444 | 363.60 | 09/04/2028 | | | 17,670 | 338.38 | 08/01/2028 | | | 15,016 | 398.18 | 07/02/2028 | | | 16,612 | 359.93 | 06/01/2028 | | | 19,085 | 313.30 | 05/01/2028 | | | 21,332 | 280.29 | 04/02/2028 | | | 20,590 | 290.39 | 03/01/2028 | | | 22,557 | 265.07 | 02/01/2028 | | | 21,966 | 201.07 | 01/02/2028 |
Outstanding Equity Awards at Fiscal Year-End
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Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | | Reed Hastings (continued) | 23,641 | 186.82 | 12/01/2027 | | | 22,306 | 198.00 | 11/01/2027 | | | 24,952 | 177.01 | 10/02/2027 | | | 25,275 | 174.74 | 09/01/2027 | | | 24,264 | 182.03 | 08/01/2027 | | | 30,216 | 146.17 | 07/03/2027 | | | 27,097 | 162.99 | 06/01/2027 | | | 28,431 | 155.35 | 05/01/2027 | | | 30,062 | 146.92 | 04/03/2027 | | | 30,961 | 142.65 | 03/01/2027 | | | 31,373 | 140.78 | 02/01/2027 | | | 31,130 | 127.49 | 01/03/2027 | | | 33,857 | 117.22 | 12/01/2026 | | | 32,188 | 123.30 | 11/01/2026 | | | 38,670 | 102.63 | 10/03/2026 | | | 40,755 | 97.38 | 09/01/2026 | | | 42,055 | 94.37 | 08/01/2026 | | | 41,055 | 96.67 | 07/01/2026 | | | 39,097 | 101.51 | 06/01/2026 | | | 42,629 | 93.11 | 05/02/2026 | | | 37,547 | 105.70 | 04/01/2026 | | | 40,374 | 98.30 | 03/01/2026 | | | 42,176 | 94.09 | 02/01/2026 | | | 25,959 | 109.96 | 01/04/2026 | | | 22,765 | 125.37 | 12/01/2025 | | | 26,513 | 107.64 | 11/02/2025 | | | 26,933 | 105.98 | 10/01/2025 | | | 26,977 | 105.79 | 09/01/2025 | | | 25,360 | 112.56 | 08/03/2025 | | | 30,485 | 93.64 | 07/01/2025 | | | 32,067 | 89.00 | 06/01/2025 | | | 35,868 | 79.58 | 05/01/2025 | | | 48,363 | 59.02 | 04/01/2025 | | | 41,601 | 68.61 | 03/02/2025 | | | 45,290 | 63.01 | 02/02/2025 | | | 25,074 | 49.85 | 01/02/2025 | | | 25,599 | 48.83 | 12/01/2024 | | | 22,526 | 55.49 | 11/03/2024 | | | 19,943 | 62.69 | 10/01/2024 | | | 18,361 | 68.09 | 09/02/2024 |
Outstanding Equity Awards at Fiscal Year-End
| 2023 Proxy Statement | 59 |
Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | | Reed Hastings (continued) | 20,566 | 60.77 | 08/01/2024 | | | 18,494 | 67.59 | 07/01/2024 | | | 20,734 | 60.29 | 06/02/2024 | | | 25,998 | 48.07 | 05/01/2024 | | | 23,996 | 52.10 | 04/01/2024 | | | 19,635 | 63.66 | 03/03/2024 | | | 21,637 | 57.77 | 02/03/2024 | | | 16,079 | 51.83 | 01/02/2024 | | | 16,030 | 51.99 | 12/02/2023 | | | 17,717 | 47.04 | 11/01/2023 | | | 17,969 | 46.37 | 10/01/2023 | | | 20,188 | 41.29 | 09/03/2023 | | | 23,415 | 35.59 | 08/01/2023 | | | 26,012 | 32.04 | 07/01/2023 | | | 26,278 | 31.71 | 06/03/2023 | | Ted Sarandos | 13,146 | 316.95 | 12/01/2032 | | | 14,530 | 286.75 | 11/01/2032 | | | 17,431 | 239.04 | 10/03/2032 | | | 18,113 | 230.04 | 09/01/2032 | | | 18,419 | 226.21 | 08/01/2032 | | | 23,155 | 179.95 | 07/01/2032 | | | 21,599 | 192.91 | 06/01/2032 | | | 20,890 | 199.46 | 05/02/2032 | | | 11,157 | 373.47 | 04/01/2032 | | | 10,788 | 386.24 | 03/01/2032 | | | 9,115 | 457.13 | 02/01/2032 | | | 5,109 | 597.37 | 01/03/2032 | | | 4,940 | 617.77 | 12/01/2031 | | | 4,481 | 681.17 | 11/01/2031 | | | 4,978 | 613.15 | 10/01/2031 | | | 5,243 | 582.07 | 09/01/2031 | | | 5,925 | 515.15 | 08/02/2031 | | | 5,720 | 533.54 | 07/01/2031 | | | 6,116 | 499.08 | 06/01/2031 | | | 5,995 | 509.11 | 05/03/2031 | | | 5,658 | 539.42 | 04/01/2031 | | | 5,543 | 550.64 | 03/01/2031 | | | 5,662 | 539.04 | 02/01/2031 | | | 5,837 | 522.86 | 01/04/2031 | | | 6,049 | 504.58 | 12/01/2030 |
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Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | | Ted Sarandos (continued) | 6,304 | 484.12 | 11/02/2030 | | | 5,786 | 527.51 | 10/01/2030 | | | 5,484 | 556.55 | 09/01/2030 | | | 6,121 | 498.62 | 08/03/2030 | | | 6,284 | 485.64 | 07/01/2030 | | | 7,166 | 425.92 | 06/01/2030 | | | 7,350 | 415.27 | 05/01/2030 | | | 8,383 | 364.08 | 04/01/2030 | | | 8,010 | 381.05 | 03/02/2030 | | | 8,525 | 358.00 | 02/03/2030 | | | 8,527 | 329.81 | 01/02/2030 | | | 8,802 | 319.50 | 08/01/2029 | | | 7,508 | 374.60 | 07/01/2029 | | | 8,355 | 336.63 | 06/03/2029 | | | 7,425 | 378.81 | 05/01/2029 | | | 7,664 | 366.96 | 04/01/2029 | | | 7,871 | 357.32 | 03/01/2029 | | | 8,276 | 339.85 | 02/01/2029 | | | 7,783 | 381.43 | 10/01/2028 | | | 8,165 | 363.60 | 09/04/2028 | | | 8,773 | 338.38 | 08/01/2028 | | | 7,456 | 398.18 | 07/02/2028 | | | 8,248 | 359.93 | 06/01/2028 | | | 15,679 | 146.17 | 07/03/2027 | | | 16,279 | 140.78 | 02/01/2027 | | | 19,282 | 127.49 | 01/03/2027 | | | 25,245 | 97.38 | 09/01/2026 | | | 26,050 | 94.37 | 08/01/2026 | | | 25,430 | 96.67 | 07/01/2026 | | | 26,405 | 93.11 | 05/02/2026 | | | 25,008 | 98.30 | 03/01/2026 | | | 26,125 | 94.09 | 02/01/2026 | | | 15,952 | 125.37 | 12/01/2025 | | | 21,357 | 93.64 | 07/01/2025 | | | 22,470 | 89.00 | 06/01/2025 | | | 25,130 | 79.58 | 05/01/2025 | | Greg Peters | 5,258 | 316.95 | 12/01/2032 | | | 5,812 | 286.75 | 11/01/2032 | | | 6,973 | 239.04 | 10/03/2032 | | | 7,245 | 230.04 | 09/01/2032 |
Outstanding Equity Awards at Fiscal Year-End
| 2023 Proxy Statement | 61 |
Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | | Greg Peters (continued) | 7,367 | 226.21 | 08/01/2032 | | | 9,262 | 179.95 | 07/01/2032 | | | 8,640 | 192.91 | 06/01/2032 | | | 8,356 | 199.46 | 05/02/2032 | | | 4,463 | 373.47 | 04/01/2032 | | | 4,315 | 386.24 | 03/01/2032 | | | 3,646 | 457.13 | 02/01/2032 | | | 2,406 | 597.37 | 01/03/2032 | | | 2,327 | 617.77 | 12/01/2031 | | | 2,111 | 681.17 | 11/01/2031 | | | 2,344 | 613.15 | 10/01/2031 | | | 2,470 | 582.07 | 09/01/2031 | | | 2,790 | 515.15 | 08/02/2031 | | | 2,694 | 533.54 | 07/01/2031 | | | 2,881 | 499.08 | 06/01/2031 | | | 2,823 | 509.11 | 05/03/2031 | | | 2,665 | 539.42 | 04/01/2031 | | | 2,611 | 550.64 | 03/01/2031 | | | 2,666 | 539.04 | 02/01/2031 | | | 2,750 | 522.86 | 01/04/2031 | | | 2,849 | 504.58 | 12/01/2030 | | | 2,969 | 484.12 | 11/02/2030 | | | 2,725 | 527.51 | 10/01/2030 | | | 2,583 | 556.55 | 09/01/2030 | | | 2,883 | 498.62 | 08/03/2030 | | | 2,960 | 485.64 | 07/01/2030 | | | 3,375 | 425.92 | 06/01/2030 | | | 3,461 | 415.27 | 05/01/2030 | | | 3,949 | 364.08 | 04/01/2030 | | | 3,772 | 381.05 | 03/02/2030 | | | 4,015 | 358.00 | 02/03/2030 | | | 4,296 | 329.81 | 01/02/2030 | | | 4,570 | 309.99 | 12/02/2029 | | | 4,939 | 286.81 | 11/01/2029 | | | 5,255 | 269.58 | 10/01/2029 | | | 4,897 | 289.29 | 09/03/2029 | | | 4,434 | 319.50 | 08/01/2029 | | | 3,782 | 374.60 | 07/01/2029 | | | 4,209 | 336.63 | 06/03/2029 | | | 3,739 | 378.81 | 05/01/2029 |
Outstanding Equity Awards at Fiscal Year-End
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Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | | Greg Peters (continued) | 3,861 | 366.96 | 04/01/2029 | | | 3,965 | 357.32 | 03/01/2029 | | | 4,168 | 339.85 | 02/01/2029 | | | 5,137 | 267.66 | 01/02/2029 | | | 4,737 | 290.30 | 12/03/2028 | | | 4,332 | 317.38 | 11/01/2028 | | | 3,605 | 381.43 | 10/01/2028 | | | 3,782 | 363.60 | 09/04/2028 | | | 4,063 | 338.38 | 08/01/2028 | | | 3,453 | 398.18 | 07/02/2028 | | | 3,820 | 359.93 | 06/01/2028 | | | 4,389 | 313.30 | 05/01/2028 | | | 4,906 | 280.29 | 04/02/2028 | | | 4,735 | 290.39 | 03/01/2028 | | | 5,187 | 265.07 | 02/01/2028 | | | 3,523 | 201.07 | 01/02/2028 | | | 3,791 | 186.82 | 12/01/2027 | | | 3,578 | 198.00 | 11/01/2027 | | | 4,001 | 177.01 | 10/02/2027 | | | 4,054 | 174.74 | 09/01/2027 | | | 3,891 | 182.03 | 08/01/2027 | | | 4,668 | 146.17 | 07/03/2027 | | | 4,186 | 162.99 | 06/01/2027 | | | 4,392 | 155.35 | 05/01/2027 | | | 4,644 | 146.92 | 04/03/2027 | | | 4,783 | 142.65 | 03/01/2027 | | | 4,846 | 140.78 | 02/01/2027 | | | 5,352 | 127.49 | 01/03/2027 | | | 5,821 | 117.22 | 12/01/2026 | | | 5,533 | 123.30 | 11/01/2026 | | | 6,648 | 102.63 | 10/03/2026 | | | 7,007 | 97.38 | 09/01/2026 | | | 7,230 | 94.37 | 08/01/2026 | | Spencer Neumann | 4,601 | 316.95 | 12/01/2032 | | | 5,086 | 286.75 | 11/01/2032 | | | 6,100 | 239.04 | 10/03/2032 | | | 6,340 | 230.04 | 09/01/2032 | | | 6,447 | 226.21 | 08/01/2032 | | | 8,104 | 179.95 | 07/01/2032 | | | 7,559 | 192.91 | 06/01/2032 |
Outstanding Equity Awards at Fiscal Year-End
| 2023 Proxy Statement | 63 |
Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | | Spencer Neumann (continued) | 7,313 | 199.46 | 05/02/2032 | | | 3,904 | 373.47 | 04/01/2032 | | | 3,776 | 386.24 | 03/01/2032 | | | 3,190 | 457.13 | 02/01/2032 | | | 1,936 | 597.37 | 01/03/2032 | | | 1,872 | 617.77 | 12/01/2031 | | | 1,697 | 681.17 | 11/01/2031 | | | 1,886 | 613.15 | 10/01/2031 | | | 1,986 | 582.07 | 09/01/2031 | | | 2,245 | 515.15 | 08/02/2031 | | | 2,167 | 533.54 | 07/01/2031 | | | 2,317 | 499.08 | 06/01/2031 | | | 2,271 | 509.11 | 05/03/2031 | | | 2,143 | 539.42 | 04/01/2031 | | | 2,100 | 550.64 | 03/01/2031 | | | 2,145 | 539.04 | 02/01/2031 | | | 2,192 | 522.86 | 01/04/2031 | | | 2,270 | 504.58 | 12/01/2030 | | | 2,367 | 484.12 | 11/02/2030 | | | 2,173 | 527.51 | 10/01/2030 | | | 2,058 | 556.55 | 09/01/2030 | | | 2,298 | 498.62 | 08/03/2030 | | | 2,360 | 485.64 | 07/01/2030 | | | 2,690 | 425.92 | 06/01/2030 | | | 2,759 | 415.27 | 05/01/2030 | | | 3,147 | 364.08 | 04/01/2030 | | | 3,007 | 381.05 | 03/02/2030 | | | 3,201 | 358.00 | 02/03/2030 | | | 3,158 | 329.81 | 01/02/2030 | | | 3,361 | 309.99 | 12/02/2029 | | | 3,632 | 286.81 | 11/01/2029 | | | 3,864 | 269.58 | 10/01/2029 | | | 3,601 | 289.29 | 09/03/2029 | | | 3,260 | 319.50 | 08/01/2029 | | | 2,781 | 374.60 | 07/01/2029 | | | 3,095 | 336.63 | 06/03/2029 | | | 2,750 | 378.81 | 05/01/2029 | | | 2,838 | 366.96 | 04/01/2029 | | | 2,916 | 357.32 | 03/01/2029 | | | 1,308 | 339.85 | 02/01/2029 |
Outstanding Equity Awards at Fiscal Year-End
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Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | | David Hyman | 3,287 | 316.95 | 12/01/2032 | | | 3,632 | 286.75 | 11/01/2032 | | | 4,358 | 239.04 | 10/03/2032 | | | 4,528 | 230.04 | 09/01/2032 | | | 4,605 | 226.21 | 08/01/2032 | | | 5,789 | 179.95 | 07/01/2032 | | | 5,400 | 192.91 | 06/01/2032 | | | 5,222 | 199.46 | 05/02/2032 | | | 2,789 | 373.47 | 04/01/2032 | | | 2,697 | 386.24 | 03/01/2032 | | | 2,279 | 457.13 | 02/01/2032 | | | 1,648 | 597.37 | 01/03/2032 | | | 1,594 | 617.77 | 12/01/2031 | | | 1,445 | 681.17 | 11/01/2031 | | | 1,605 | 613.15 | 10/01/2031 | | | 1,691 | 582.07 | 09/01/2031 | | | 1,911 | 515.15 | 08/02/2031 | | | 1,845 | 533.54 | 07/01/2031 | | | 1,972 | 499.08 | 06/01/2031 | | | 1,934 | 509.11 | 05/03/2031 | | | 1,825 | 539.42 | 04/01/2031 | | | 1,787 | 550.64 | 03/01/2031 | | | 1,827 | 539.04 | 02/01/2031 | | | 1,573 | 522.86 | 01/04/2031 | | | 1,631 | 504.58 | 12/01/2030 | | | 1,700 | 484.12 | 11/02/2030 | | | 1,560 | 527.51 | 10/01/2030 | | | 1,479 | 556.55 | 09/01/2030 | | | 1,650 | 498.62 | 08/03/2030 | | | 1,695 | 485.64 | 07/01/2030 | | | 1,932 | 425.92 | 06/01/2030 | | | 1,981 | 415.27 | 05/01/2030 | | | 2,260 | 364.08 | 04/01/2030 | | | 2,160 | 381.05 | 03/02/2030 | | | 2,299 | 358.00 | 02/03/2030 | | | 2,432 | 329.81 | 01/02/2030 | | | 2,587 | 309.99 | 12/02/2029 | | | 2,796 | 286.81 | 11/01/2029 | | | 2,976 | 269.58 | 10/01/2029 | | | 2,772 | 289.29 | 09/03/2029 |
Outstanding Equity Awards at Fiscal Year-End
| 2023 Proxy Statement | 65 |
Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | | David Hyman (continued) | 2,511 | 319.50 | 08/01/2029 | | | 2,141 | 374.60 | 07/01/2029 | | | 2,383 | 336.63 | 06/03/2029 | | | 2,117 | 378.81 | 05/01/2029 | | | 2,186 | 366.96 | 04/01/2029 | | | 2,245 | 357.32 | 03/01/2029 | | | 2,360 | 339.85 | 02/01/2029 | | | 2,549 | 267.66 | 01/02/2029 | | | 2,350 | 290.30 | 12/03/2028 | | | 2,150 | 317.38 | 11/01/2028 | | | 1,789 | 381.43 | 10/01/2028 | | | 1,876 | 363.60 | 09/04/2028 | | | 2,017 | 338.38 | 08/01/2028 | | | 1,713 | 398.18 | 07/02/2028 | | | 1,896 | 359.93 | 06/01/2028 | | | 2,177 | 313.30 | 05/01/2028 | | | 2,435 | 280.29 | 04/02/2028 | | | 2,349 | 290.39 | 03/01/2028 | | | 2,574 | 265.07 | 02/01/2028 | | | 1,259 | 201.07 | 01/02/2028 | | | 1,355 | 186.82 | 12/01/2027 | | | 1,278 | 198.00 | 11/01/2027 | | | 1,430 | 177.01 | 10/02/2027 | | | 1,449 | 174.74 | 09/01/2027 | | | 1,390 | 182.03 | 08/01/2027 | | | 1,732 | 146.17 | 07/03/2027 | | | 1,553 | 162.99 | 06/01/2027 | | | 1,630 | 155.35 | 05/01/2027 | | | 1,722 | 146.92 | 04/03/2027 | | | 1,775 | 142.65 | 03/01/2027 | | | 1,798 | 140.78 | 02/01/2027 | | | 3,276 | 127.49 | 01/03/2027 | | | 3,564 | 117.22 | 12/01/2026 | | | 3,387 | 123.30 | 11/01/2026 | | | 4,070 | 102.63 | 10/03/2026 | | | 4,290 | 97.38 | 09/01/2026 | | | 4,426 | 94.37 | 08/01/2026 | | | 4,321 | 96.67 | 07/01/2026 | | | 4,115 | 101.51 | 06/01/2026 | | | 4,487 | 93.11 | 05/02/2026 |
Outstanding Equity Awards at Fiscal Year-End
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Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | | David Hyman (continued) | 3,952 | 105.70 | 04/01/2026 | | | 4,249 | 98.30 | 03/01/2026 | | | 4,439 | 94.09 | 02/01/2026 | | | 2,274 | 109.96 | 01/04/2026 | | | 1,994 | 125.37 | 12/01/2025 | | | 2,322 | 107.64 | 11/02/2025 | | | 2,359 | 105.98 | 10/01/2025 | | | 2,363 | 105.79 | 09/01/2025 | | | 2,221 | 112.56 | 08/03/2025 | | | 2,667 | 93.64 | 07/01/2025 | | | 2,807 | 89.00 | 06/01/2025 | | | 3,143 | 79.58 | 05/01/2025 | | Rachel Whetstone | 658 | 316.95 | 12/01/2032 | | | 726 | 286.75 | 11/01/2032 | | | 872 | 239.04 | 10/03/2032 | | | 905 | 230.04 | 09/01/2032 | | | 921 | 226.21 | 08/01/2032 | | | 1,158 | 179.95 | 07/01/2032 | | | 1,080 | 192.91 | 06/01/2032 | | | 1,045 | 199.46 | 05/02/2032 | | | 558 | 373.47 | 04/01/2032 | | | 539 | 386.24 | 03/01/2032 | | | 456 | 457.13 | 02/01/2032 | | | 174 | 597.37 | 01/03/2032 | | | 169 | 617.77 | 12/01/2031 | | | 153 | 681.17 | 11/01/2031 | | | 170 | 613.15 | 10/01/2031 | | | 179 | 582.07 | 09/01/2031 | | | 202 | 515.15 | 08/02/2031 | | | 195 | 533.54 | 07/01/2031 | | | 209 | 499.08 | 06/01/2031 | | | 204 | 509.11 | 05/03/2031 | | | 194 | 539.42 | 04/01/2031 | | | 189 | 550.64 | 03/01/2031 | | | 193 | 539.04 | 02/01/2031 | | | 179 | 522.86 | 01/04/2031 | | | 186 | 504.58 | 12/01/2030 | | | 194 | 484.12 | 11/02/2030 | | | 177 | 527.51 | 10/01/2030 | | | 169 | 556.55 | 09/01/2030 |
Outstanding Equity Awards at Fiscal Year-End
| 2023 Proxy Statement | 67 |
Outstanding Equity Awards at Fiscal Year-End
| | Option Awards | | | | Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | | Rachel Whetstone (continued) | 188 | 498.62 | 08/03/2030 | | | 193 | 485.64 | 07/01/2030 | | | 220 | 425.92 | 06/01/2030 | | | 226 | 415.27 | 05/01/2030 | | | 257 | 364.08 | 04/01/2030 | | | 246 | 381.05 | 03/02/2030 | | | 262 | 358.00 | 02/03/2030 | | | 221 | 329.81 | 01/02/2030 | | | 235 | 309.99 | 12/02/2029 | | | 254 | 286.81 | 11/01/2029 | | | 271 | 269.58 | 10/01/2029 | | | 252 | 289.29 | 09/03/2029 | | | 228 | 319.50 | 08/01/2029 | | | 195 | 374.60 | 07/01/2029 | | | 217 | 336.63 | 06/03/2029 | | | 192 | 378.81 | 05/01/2029 | | | 199 | 366.96 | 04/01/2029 | | | 204 | 357.32 | 03/01/2029 | | | 214 | 339.85 | 02/01/2029 | | | 137 | 267.66 | 01/02/2029 | | | 20 | 290.30 | 12/03/2028 |
Option Exercises
Option Exercises There were no exercises of stock options by the Named Executive Officers during the year ended December 31, 2022.
Option Exercises
| 68 | |
Potential Payments upon Termination or Change-in-Control
Potential Payments upon Termination or Change-in-Control The Named Executive Officers are beneficiaries of our Severance Plan, as described in more detail above in “Compensation Discussion and Analysis—Termination-Based Compensation and Change in Control Retention Incentives.” The information below reflects the estimated value of the compensation to be paid by us to each of the Named Executive Officers in the event of termination or a change in control under the terms of the Severance Plan. The amounts shown below assume that termination or change in control was effective as of December 31, 2022 and is based on 2023 allocatable compensation, which went into effect prior to the end of the 2022 fiscal year. The actual amounts that would be paid can only be determined at the time of the actual triggering event.
Potential Payments upon Termination or Change-in-Control
| Name | Severance Benefit ($)(1) | Change in Control Benefit ($)(2) | | Reed Hastings | 34,650,000 | 34,650,000 | | Ted Sarandos | 40,000,000 | 40,000,000 | | Spencer Neumann | 14,000,000 | 14,000,000 | | Greg Peters | 24,000,000 | 24,000,000 | | David Hyman | 11,000,000 | 11,000,000 | | Rachel Whetstone | 6,500,000 | 6,500,000 |
Potential Payments upon Termination or Change-in-Control
| The amounts in this column correspond to lump sum payments in cash that are equal to twelve months of allocatable compensation. The amounts in this column would be payable upon a termination of employment (other than for cause, death, or permanent disability), so long as the Named Executive Officer signs a waiver and release of claims in a form reasonably satisfactory to us. The right to receive a severance benefit terminates upon a change in control transaction, so that the Named Executive Officers are not entitled to both a change in control benefit and a severance benefit.(1) |
Potential Payments upon Termination or Change-in-Control
| The amounts in this column correspond to lump sum payments in cash that are equal to twelve months of allocatable compensation for the Named Executive Officer as of December 31, 2022. These are single-trigger payments that would be made upon a change in control, provided that the Named Executive Officer had not previously received severance under the Severance Plan.(2) |
Pay Ratio Disclosure
Pay Ratio Disclosure As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of our Co-Chief Executive Officers in 2022, Messrs. Hastings and Sarandos. The pay ratio included in this information is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. As disclosed in the Summary Compensation Table, the 2022 annual total compensation as determined under Item 402 of Regulation S-K was $51,073,237 for Mr. Hastings and $50,299,296 for Mr. Sarandos, the co-Chief Executive Officers on December 31, 2022. The 2022 annual total compensation as determined under Item 402 of Regulation S-K for our median employee was $218,400. Based on the foregoing, our estimate of the ratio of our Co-Chief Executive Officers’ annual total compensation to our median employee’s annual total compensation for fiscal year 2022 is 234 to 1, in the case of Mr. Hastings, and 230 to 1, in the case of Mr. Sarandos.1 Given the different methodologies that various public companies will use to determine an estimate of their pay ratios, the estimated ratio reported above should not be used as a basis for comparison between companies. To identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of the “median employee,” the methodology and the material assumptions, adjustments, and estimates that we used were as follows: We selected December 31, 2022, which is within the last three months of 2022, as the date upon which we would identify the “median employee.” We also used December 31 as our measuring date in 2021. Consistent with the Summary Compensation Table, we examined total annual compensation for all employees (excluding Messrs. Hastings and Sarandos), which included: base salary, option awards consisting of stock options, and other compensation such as 401(k) matching contributions. We annualized the compensation of all full-time and part-time employees who were not employed by us for all of 2022. For employees outside the United States, we converted their compensation to U.S. dollars using the applicable average exchange rate for 2022.
Pay Ratio Disclosure
| While the 2022 allocatable compensation for Mr. Sarandos was higher than for Mr. Hastings, the total compensation amount determined under Item 402 of Regulation S-K and resulting pay ratios differ due to the accounting valuation attributable to their stock option grants.(1) |
Pay Ratio Disclosure
| 2023 Proxy Statement | 69 |
Pay Ratio Disclosure
In accordance with SEC rules, we have set forth below a stockholder proposal, along with the supporting statement of the stockholder proponent, for which we and our Board accept no responsibility. The stockholder proposal is required to be voted upon at our Annual Meeting only if properly presented at our Annual Meeting. As explained below, our Board unanimously recommends that you vote “AGAINST” the stockholder proposal. John Chevedden, 2215 Nelson Ave, No. 205, Redondo Beach, CA 90278, the beneficial owner of 10 shares of the Company’s common stock on the date the proposal was submitted, has notified the Company of his intent to present the following proposal at the Annual Meeting.
Table
| Year | Summary Compensation Table Total for Reed Hastings ($) | Summary Compensation Table Total for Ted Sarandos ($) | Compensation Actually Paid to Reed Hastings ($) (1) | Compensation Actually Paid to Ted Sarandos ($) (1) | Average Summary Compensation Table Total for Non-PEO NEOs ($) (2) | Average Compensation Actually Paid to Non-PEO NEOs ($) (1)(2) | Value of Initial Fixed $100 Investment Based On: | | Net Income ($ Thousands) | | | | | | | | | Total Shareholder Return ($) | Peer Group Total Shareholder Return ($) (3) | | | 2022 | 51,073,237 | 50,299,296 | 51,073,237 | 50,299,296 | 16,336,478 | 16,336,478 | 91.13 | 81.50 | 4,491,924 | | 2021 | 40,823,725 | 38,232,164 | 40,823,725 | 38,232,164 | 12,097,270 | 12,097,270 | 186.19 | 134.41 | 5,116,228 | | 2020 | 43,226,024 | 39,318,251 | 43,226,024 | 39,318,251 | 12,392,648 | 12,392,648 | 167.11 | 137.32 | 2,761,395 |