Netflix Chief Executive’s Salary Will Double In 2013
redOrbit Staff & Wire Reports — Your Universe Online
One year after taking a pay cut due in part to the controversial decision to raise subscription rates, the CEO of Netflix will see his pay double to $4 million in 2013, according to reports.
Reed Hastings, co-founder and chief executive of the online content streaming and DVD rental service, will receive a $2 million base salary plus stock options totaling $2 million in value, the Associated Press reported on Friday.
That’s an increase from the annual salary of $500,000 and $1.5 million in stock options he received this year, said Eric Volkman of The Motley Fool. Hastings’ salary was also $500,000 in 2011, but he received a reported $3 million in stock options that year, Volkman added.
“Hastings’ total pay for 2012 was down 43 percent from $3.5 million in 2011, when some controversial decisions, including a steep price hike on subscriptions, sent the stock spiraling. It fell from a high above $300 to a low below $70 per share,” the AP explained. “This year, shares are up 29 percent“¦ [and] the company expects to add around 5 million U.S. subscribers, to between 26.4 million and 27.1 million by the end of the year.”
“The compensation increase would seem to represent renewed confidence in Hastings, whose stock option allowance was reduced in December 2011 following a botched plan that year to split the company in two — a plan that upset investors and caused a subscriber revolt,” added CNET’s Steven Musil. “After a price hike led to a number of subscriber cancellations, the company announced plans to spin off its DVD-by-mail operations into a new company called Qwikster — plans that were scuttled after only three weeks.”
According to Reuters, the stock options vest on a monthly basis, and their actual value will depend upon how Netflix shares perform on Wall Street. The news organization also reported David Wells, the company’s Chief Financial Officer, will receive a modest raise to $1.1 million, including a base salary of $770,000.