Reed Hastings and Ted Sarandos are set to receive $35 million and $40 million, from Netflix in 2023
Netflix is changing how its top executives get paid to encourage them to take more of their compensation in stock with bonuses tied to performance.
In what is shaping up to be a pivotal year for Netflix, co-CEOs Reed Hastings and Ted Sarandos will receive pay packages of $34.65 million and $40 million in 2023.
This is consistent with their 2022 pay packages of $40 million for Sarandos and $34.6 million for Hastings; however, Netflix also said that it is modifying how it compensates its senior executives, providing less guaranteed income and subjecting their pay to the company’s performance.
Previously, Sarandos, Hastings, and other Netflix executives got a salary and a share of stock each year, with the ability to pick how much of each to take. Sarandos received a $20 million salary and a $20 million stock tranche last year, while Hastings received a $20 million salary and a $20 million stock tranche, while Hastings took a $65,000 stipend, with the remaining $34 million in stock.
In 2023, the business will pay its officers a salary, an annual target bonus, and a stock tranche, with a salary ceiling of $3 million and a stipulation that at least 50% of remuneration be in stock. While Hastings’ compensation remains intact at $650,000 per year plus $34 million in stock, Sarandos will receive a $3 million salary plus a $17 million target bonus and $20 million in shares.
Netflix releases its pay packages in December, but because much of the compensation is in the form of stock, the actual compensation varies depending on the company’s share price and is reported in the company’s annual proxy filing.
On Friday, the 2023 compensation revisions were submitted to the Securities and Exchange Commission on Friday afternoon.
Next year will be significant for Netflix, which has been caught off guard in 2022, with its share price plunging by roughly 50% year to date, two waves of layoffs, and big strategy pivots on password sharing and advertising.
That new advertising tier is viewed as a road to growth, both as a tool to recruit new or former members and as a landing pad for users affected by the password-sharing crackdown.
And Netflix COO Greg Peters is in charge of the company’s advertising drive, its fledgling gaming endeavors, and password-sharing crackdown. According to last year’s forecast, Peters will receive a $24 million salary package in 2023.