NFLX – Netflix Chairman Reed Hastings Realized $612M From Stock Options Last Year

Netflix Inc (NASDAQ: NFLX) Chairman and Co-CEO realized about $612.1 million from stock options in 2020, a regulatory filing revealed.

What Happened: Hastings exercised his stock options to acquire a total of 1,327,634 shares of the subscription video-on-demand company through the year.

Ted Sarandos, who became co-CEO last year, acquired a total of 105,372 shares, realizing a total of $30.45 million from stock options in 2020.

Hastings’ 2020 total compensation was valued at $43.2 million, compared with $38.6 million in 2019 — while for Sarnados the compensation was $39.3 million, up from $34.7 million in 2019.

Netflix said stock price needs to appreciate 40% before the employee is better off allocating cash to stock options. The SVOD company added it does not use performance-based bonuses as it believes that they tend to incentivize specific, typically short-term-focused behavior rather than encourage long-term stockholder value creation.

See Also: It Seems Netflix Has Been Dethroned

Why It Matters: Netflix broke subscriber records in 2020, with 37 million net additions in the year, compared with its previous record gain of 28.6 million new subscribers in 2018. It reported 208 million paid subscribers at the end of Q1, a 14% year-over-year increase but below the guidance figure of 210 million. 

The SVOD company said in its first-quarter letter to shareholders that it believed “paid membership growth slowed due to the big Covid-19 pull forward in 2020 and a lighter content slate in the first half of this year, due to Covid-19 production delays.” 

While some uncertainty due to COVID-19 persists, Netflix expects a strong second half with the return of new seasons of its “biggest hits and an exciting film lineup.”

See Also: How Netflix Is Preparing To Combat The ‘Lighter Content Slate’ That Affected Q1 Growth

Price Action: Shares of Netflix closed 0.63% lower at $505.55 on Friday.

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