Netflix co-CEOs Reed Hastings and Ted Sarandos earned, respectively, $43.2 million and $39.3 million in 2020. The pay was up for both. Chairman and founder Hastings earned $38.6 million the year before, when Sarandos took home $34.7 million.
Hastings base salary was only $650,000 with the bulk of his compensation from a grant of options valued at $42.4 million, according to a proxy statement filed with the SEC.
Sarandos, instead, received a base salary of $20 million and an option grant worth $18.3 million. HE was named co-CEO last July, in addition to his role as chief content officer.
Netflix had a blowout 2020 as the quintessential stay-at-home stock as the world braved a global pandemic with Tiger King: Murder, Mayhem and Madness, The Queen’s Gambit and Bridgerton. On Tuesday, however, it reported lower than expected subscriber growth for the first quarter of 2021.
The company has an unusual approach to compensation with a program consisting solely of base salary and stock options — for executive officers and, it said, the majority of employees. It grants options on the first trading day of each month. It allows its top executives to chose how to allocate pay between salary and options.
A year ago, in December of 2019, Netflix anticipated that Hastings would see total 2020 compensation of $36.5 million for 2020 ($650,000 base salary, $34 million in annual stock options) and Sarandos would earn the same from $20 million in salary and $14.6 million in stock options. They both ended up earning more. In December of 2020, Netflix forecast earnings of $34 million for both in 2021..
In a note to shareholders in the proxy, lead independent director Jay Hoag looked back at 2020, when the company “had approximately 204 million paid memberships, achieved approximately $25 billion in revenue, representing 24% year-over-year growth, and approximately $4.6 billion of operating income, representing 76% year-over-year growth.”
“We prioritize creating long-term value for our stockholders,” he said.