Netflix execs harvest big paydays amid stock surge

Netflix has rewarded its top executives, including Chief Executive Officer Reed Hastings, with a bumper crop of pay raises, a decision that’s underpinned by the boom in the shares of Netflix, now near all-time highs.

Hastings harvested a compensation package in 2016 that brought the CEO $23.2 million in total direct pay, according to a regulatory filing this week from Netflix.

But what was really eye-popping in the filing: Hastings cashed in big time with a gain of $105.4 million through the sale of stock options that Netflix had previously granted the video-streaming company’s top boss.

The 2016 compensation package for Hastings amounted to a hefty increase of 39.5 percent in his total direct compensation compared to the $16.6 million in total pay the CEO corralled during 2015, the filing with the Securities and Exchange Commission shows.

Ted Sarandos, chief content officer with Netflix, landed $18.9 million in total direct pay in 2016, which was 35.3 percent higher than the rewards the company bestowed on him the year before.

Neil Hunt, chief product officer, received $8.8 million in total direct compensation in 2016, up 4.5 percent from 2015, the SEC documents show.

Greg Peters, international development officer, was awarded $8 million in 2016, a robust 43.1 percent increase from his compensation in 2015.

David Wells, Netflix’s chief financial officer, received $6.1 million, a 46.3 percent jump from his total direct pay the year before, according to the filing.

Sarandos also enjoyed a $5.6 million windfall from gains realized through the sale of stock options.

The basic salaries for Hastings, Hunt, Peters and Sarandos all declined, while Wells received an increase in his base salary. Hastings was paid a $900,000 salary, which was down 19.3 percent from his $1.1 million in salary in 2015.

The five executives listed in the filing realized their gains primarily by being awarded stock option packages.

Hastings captured stock option awards in 2016 that totaled $22.3 million, which represented a 43.8 percent gain from the equity package he received in 2015.

Of the five named in the filing, Sarandos had the second-largest option award, a $13.9 million package that was 28 percent higher than  the year before.

The increases in the pay packages were much greater, measured by percent gain, than the increase in Netflix shares during 2016.

Los Gatos-based Netflix experienced an 8.2 percent gain in its shares during 2016. Yet the Netflix stock managed to outperform, by a significant margin, the tech-focused Nasdaq Composite, which rose 7.5 percent.

So far in 2017, Netflix shares have soared 22 percent, well ahead of the Nasdaq, which is up a sturdy 12 percent.

 

Image: Screenshot from Netflix’s site.

 

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