Executive OfficersStockholder Nominees
The Nominating and Governance Committee considers properly submitted stockholder nominations for candidates for membership on the Board as described above under “Identifying and Evaluating Nominees for Directors.” Any stockholder nominations proposed for consideration by the Nominating and Governance Committee should include the nominee’s name and qualifications for Board membership. In addition, they should be submitted within the time frame as specified under “Stockholder Proposals” above and mailed to: Netflix, Inc., 100 Winchester Circle, Los Gatos, California 95032, Attention: Secretary. Our bylaws provide a proxy access right for stockholders, pursuant to which a stockholder, or a group of up to 20 stockholders, owning at least three percent of outstanding shares of our common stock continuously for at least three years, may nominate and include in our annual meeting proxy materials director nominees constituting up to the greater of (a) two directors or (b) twenty percent of the Board, subject to certain limitations and provided that the stockholders and nominees satisfy the requirements specified in our bylaws. For information about Mr. Hastings, see “Proposal One – Election of Directors.” Our other executive officers are set forth below:
| | | | | | | Other Executive Officers
| | Age
| | | Position 2021 PROXY STATEMENT | | 19 |
OUR BOARD EVALUATION PROCESS Each year, our Board conducts a self-evaluation process to help assure and enhance its performance. This process is overseen by the Nominating and Governance Committee, and involves interviews of each director by our Chief Legal Officer. Feedback is sought primarily in the following areas: (a) the Board’s effectiveness, structure, culture and composition, (b) the quality of and access to information shared with the Board about our business and (c) performance of the directors and quality of Board discussions. How We Govern and are Governed OUR APPROACH TO CORPORATE GOVERNANCE Corporate Governance Philosophy Netflix operates in a dynamic industry and has been in a state of constant innovation since inception. We have redefined how people watch video—first through DVD-by-mail, then streaming video, and now as one of the world’s leading entertainment services with approximately 208 million memberships in 190 countries. Our success has not gone unnoticed, and we are seeing increasing competition, even as this dynamic market continues to evolve. Our corporate governance structure is built against this backdrop. Governance, in this context, means finding the right balance of rights and responsibilities among stockholders, the Board, and management, and ensuring that there are appropriate checks and balances in place. With the rapid evolution of technology and the changing media landscape, we are continually adjusting our service to meet the dynamic needs and desires of our consumers. Our governance structure is built to help us to do that. Our focus is on creating long-term value for our stockholders, and we have been successful at that – since our initial public offering in 2002, annualized total stockholder return through December 31, 2020 was 40%. Our governance structure is unconventional. We have several provisions that give our Board and our management team the freedom to be forward-thinking, such as making investments to build our own production studios and developing our own animation capabilities, with the confidence that they will be able to see those investments to fruition. At the same time, we have paid attention to our stockholders and increased our accountability to them by adopting provisions such as proxy access. We are proud of our governance structure, both because of how it has supported our success to date and for being innovative, such as the way that our Board has unfettered access to management and is able to seek information directly from employees all around the enterprise. We strive to stay in tune with our ownership base. Our Board and our management team engage directly with our stockholders, and our Board and its committees consider stockholders’ feedback in assessing our governance structure, including our compensation program. These discussions provide a good opportunity to share views and answer questions; the input from our stockholders will continue to inform our ongoing evaluation of our structure. We believe our approach to governance will continue to provide the greatest benefit to Netflix and our stockholders. We realize that elements of our structure may not fit within the standard corporate governance practices and that some stockholders take a different view. But we believe that Netflix’s long-term value is currently best optimized with our approach to governance. | | | | | Kelly Bennett 20 | | | | |
Stockholder Engagement and 2020 Stockholder Proposals At our 2020 annual meeting, stockholders presented three proposals for vote. One proposal requested additional disclosure around political spending, and the proposal did not receive majority support from stockholders. The second proposal requested that we lower the two-thirds supermajority requirement for amending our charter and bylaws to a simple majority. This proposal did receive majority support from stockholders. The third proposal sought a public report regarding our equal employment opportunity policy, and received less than 1% support from stockholders. We consider the voting results for stockholders proposals in our Board discussions and as we contemplate our governance structure. We also engaged with stockholders to solicit feedback on a broad range of topics, including these stockholder proposals. We held 10 virtual meetings in the fall of 2020 with stockholders representing approximately 25% of our common stock outstanding. Members of the Board, accompanied by Company representatives as appropriate, participated in each of these conversations. We also held numerous engagement meetings earlier in 2020, prior to our 2020 annual meeting. In addition to governance and compensation matters, our discussions in 2020 centered on our approach to environmental, social and governance (ESG) matters; diversity, equity and inclusion; our response to the COVID-19 pandemic; and our dual CEO management structure. Investors expressed a desire to see improved disclosure on environmental and social matters, which the recent hire of our Sustainability Officer is intended to help address. We have also recently increased our disclosure about these topics partly in response to investor feedback by publishing an Inclusion Report in January 2021 along with our EEO-1 and ESG reports. We also discussed our approach to governance, including our goal of ensuring that we are best able to execute our long-term vision, which we believe is in the best interests of all stockholders. Investors understood our rationale for our governance structure, even if they disagreed with it. While investors inquired about our dual CEO model and how it works for Netflix, none expressed that it was inappropriate for us. We explained that the dual CEO model formalized the prior working relationship between Reed and Ted, and was an effective leadership model to further support our continued growth and international expansion. Stockholders gave us high marks for our response to the COVID-19 pandemic, such as our focus on employee well-being and our efforts to support the creative industry through our establishment of hardship funds. The feedback on our compensation program was limited, with many investors understanding and supportive of our approach to compensation. While we did not hear thematic concerns about our compensation program during our meetings, one stockholder questioned some components of our compensation program, including the ability of our executives to allocate their compensation between cash and stock options. We further note that our current practice with respect to our supermajority provision is a mainstream practice. According to data from FactSet, more than forty percent of S&P 500 companies have supermajority provisions in place, and our threshold is common and among the lower thresholds that companies have adopted. After consideration of stockholder feedback, industry trend data, and our corporate governance philosophy, we decided at this point not to lower the voting requirement from its current supermajority level. A simple majority vote requirement already applies to most corporate matters submitted to a vote of our stockholders. We believe that in the current dynamic business environment, the supermajority we have in place is appropriate to increase stability in our operations, while still being set low enough for stockholders to have a voice on issues where there is strong consensus. We will continue to monitor and evaluate this issue. 46 | | | Chief Marketing Officer | | | | Jonathan Friedland
| | 2021 PROXY STATEMENT | | | 59 | | | Chief Communications Officer | | | | David Hyman
| | | 52 | | | General Counsel and Secretary | | | | Jessica Neal
| | | 41 | | | Chief Talent Officer | | | | Greg Peters
| | | 47 | | | Chief Product Officer | | | | Ted Sarandos
| | | 53 | | | Chief Content Officer | | | | David Wells
| | | 46 | | | Chief Financial Officer21 |
Kelly Bennett became Netflix’s Chief Marketing Officer in 2012 after nearly a decade at Warner Bros. where he was most recently Vice President Interactive, World Wide Marketing with the pictures group, leading international online campaigns for Warner Bros. movies. Before that, Mr. Bennett ran digital marketing for Warner Bros. Pictures in Europe, the Middle East and Africa and worked in promotion and business development at the company. He previously held executive positions at Dow Jones International and Ignition Media as well as being a partner in online marketing agency Cimex Media. The Canada-born Bennett is a graduate of Simon Fraser University.
Jonathan Friedland joined Netflix in 2011 from The Walt Disney Company, where he was SVP, Corporate Communications. Before that, he spent over 20 years as a foreign correspondent and editor, mainly with The Wall Street Journal, in the U.S., Asia and Latin America andco-founded the Diarios Rumbo chain of Spanish-language newspapers in Texas. Mr. Friedland, who has a MSc. Economics from the London School of Economics and a BA from Hampshire College, was a member of the WSJ team that won the Pulitzer Prize for its coverage of the 9/11 attacks.
David Hyman is General Counsel for Netflix, responsible for all legal and public policy matters for the Company. He has served in this capacity since 2002 and also serves as the Company’s Secretary.
Prior to Netflix, Mr. Hyman was the General Counsel of Webvan, an online internet retailer, having previously held the role of senior corporate counsel. He also practiced law at Morrison & Foerster in San Francisco and Arent Fox in Washington, DC.
Mr. Hyman earned his JD and Bachelor’s degrees from the University of Virginia.
Jessica Nealis a Netflix veteran, starting at the company in 2006 and has been heavily involved in improving the Netflix culture as the company grew.
In 2013 she left to become head of human resources at Coursera, which provides online access to the world’s best university courses, and, later, Chief People Officer at Scopely, a leading player in the mobile gaming industry.
She returned to Netflix in the first half of 2017, at first overseeing HR for the 2000-person product engineering team responsible for continuously improving the Netflix consumer experience before being promoted to her current role.
Ms. Neal also serves on the board of directors of the Association for Talent Development. She holds a B.A. in Fine Art from School of Visual Arts.
9
Greg Peters assumedTHE ROLE OF THE BOARD IN RISK OVERSIGHT
The Board’s role in our risk oversight process includes reviewing and discussing with members of management areas of material risk to the role of Chief Product Officer in July 2017Company, including strategic, operational, financial and leads the product team, which designs, buildslegal risks. The Board as a whole primarily deals with matters related to strategic and optimizes the Netflix experience. Previously, Greg was International Development Officer for Netflix, responsible for the global partnerships with consumer electronics companies, internet service providers and multi-channel video programming distributors that enable Netflix to deliver movies and TV shows across a full range of devices and platforms. Prior to joining Netflix in 2008, Mr. Peters was senior vice president of consumer electronics products for Macrovision Solutions Corp. (later renamed to Rovi Corporation) and previously held positions at digital entertainment software provider, Mediabolic Inc., Red Hat Network, the provider of Linux and Open Source technology, and online vendor Wine.com. Mr. Peters holds a degree in physics and astronomy from Yale University. Mr. Peters joined the board of 2U, Inc., a global leader in education technology, in March of 2018.
Ted Sarandos has led content acquisition for Netflix since 2000. With more than 20 years’ experience in home entertainment, Mr. Sarandos is recognized in the industry as an innovator in film acquisition and distribution.
Before Netflix, Mr. Sarandos was an executive at video distributor ETD and Video City / West Coast Video.
Mr. Sarandos is a Henry Crown Fellow at the Aspen Institute and serves on the board of Exploringoperational risk. The Arts, anon-profit focused on arts in schools. He also serves on the Film Advisory Board for Tribeca and Los Angeles Film Festival, is an American Cinematheque board member, an Executive Committee Member of the Academy of Television Arts & Sciences, and is a trustee of the American Film Institute.
David Wells has served as the Company’s Chief Financial Officer since 2010. His responsibilities include a number of operating duties such as customer service, real estate, and employee technology. Mr. Wells has been at Netflix since March 2004, serving in a variety of roles, most recently as VP of Financial Planning & Analysis. He spent two years, from July 2015 to July 2017, living and performing his global CFO role from the Netherlands as part of building up Netflix’s European operations.
Prior to joining Netflix, Mr. Wells served in progressive roles at Deloitte Consulting from August 1998 to March 2004 and at variousnon-profit organizations before getting his MBA.
Mr. Wells joined the board of The Trade Desk, a public company that provides a technology platform for ad buyers, in January 2016, and serves as Audit Committee Chairdeals with matters of financial and onlegal risk, including cybersecurity risk. The Compensation Committee addresses risks related to compensation and other talent-related matters. The Nominating and Governance Committee manages risks associated with Board independence and corporate governance. Committees report to the Compensation Committee.
Mr. Wells holds an MBAfull Board regarding their respective considerations and MPP from The University of Chicago and a Bachelor’s Degreeactions. Throughout 2020, in Commerce fromresponse to the University of Virginia.
There are no family relationships among anyCOVID-19 pandemic, management, with the support of our directors, nominees for directorBoard and executive officers.Audit Committee, engaged, assessed and led our efforts to mitigate operational, employee and other risks to our business associated with the pandemic.
Board Meetings and CommitteesHow We are Organized
BOARD MEETINGS AND COMMITTEES The Board held eightfive meetings during 2017.2020. Each Board member attended at least 75% of the aggregate of the total number of Board meetings in 2017. In 2017,and meetings of the Board had fourcommittees.
As of the date of this Proxy Statement, the Board has three standing committees: (1) the Compensation Committee; (2) the Audit Committee; and (3) the Nominating and Governance Committee; and (4) the Stock Option Committee. COMPENSATION COMMITTEE 10
Compensation Committee
TheIn 2020, the Compensation Committee of the Board consistsconsisted of fournon-employee directors: Messrs. Battle,Belmer, Döpfner, Haley (Chair), and Hoag and Ms. Sweeney. Ms. Sweeney was appointedMr. Hoag also served on the Compensation Committee until Mr. Döpfner’s appointment to the Compensation Committee in 2017.March 2020. Each member of the Compensation Committee is independent in compliance with the rules of the SEC and the listing standards of the NASDAQ Stock Market as they pertain to Compensation Committee members. Each of the Compensation Committee members is also anon-employee director under Rule16b-3 of the Exchange Act and an outside director under section 162(m) of the Internal Revenue Code of 1986, as amended. The Compensation Committee reviews and approves all forms of compensation to be provided to theour executive officers and directors of the Company. The Compensation Committee may not delegate these duties.directors. For a description of the role of the executive officers in recommending compensation and the role of any compensation consultants, please see the section entitled “Compensation Discussion and Analysis” below. The Compensation Committee held threefour meetings in 2017.2020. Each member attended at least 75% of the aggregate ofall the Compensation Committee meetings held in 2017, except for Ms. Sweeney who was absent from the only meeting that was held after her appointment.2020.
The Report of the Compensation Committee is included in this Proxy Statement. In addition, the Board has adopted a written charter for the Compensation Committee, which is available on the Company’sour Investor Relations website athttp:https://ir.netflix.com/governance.cfmir.netflix.net/governance/governance-docs/default.aspx. Audit CommitteeAUDIT COMMITTEE
The Audit Committee of the Board consists of threenon-employee directors: Mr. Barton, and Mses. Kilgore and Mather (Chair). In 2017, Ms. Kilgore replaced Mr. Haley on the Audit Committee. Each member, each of the Audit Committteewhom is independent in compliance with the rules of the SEC and the listing standards of the NASDAQ Stock Market as they pertain to audit committee members. The Board has determined that Ms. Mather is an audit committee financial expert as defined by Item 407(d)(5)(ii) of RegulationS-K of the Securities Act of 1933, as amended. | | | | | 22 | | | | |
The Audit Committee engages the Company’s independent registered public accounting firm, reviews the Company’s financial controls, evaluates the scope of the annual audit, reviews audit results, consults with management and the Company’s independent registered public accounting firm prior to the presentation of financial statements to stockholders and, as appropriate, initiates inquiries into aspects of the Company’s internal accounting controls and financial affairs. The Audit Committee met seven times in 2017.2020. Each member attended at least 75% of the aggregate of the Audit Committee meetings held in 2017 which occurred during their tenure on the Audit Committee, except Mr. Barton who attended at least 71% of such meetings.2020. The Report of the Audit Committee is included in this Proxy Statement. In addition, the Board has adopted a written charter for the Audit Committee, which is available on the Company’sour Investor Relations website athttp:https://ir.netflix.com/governance.cfmir.netflix.net/governance/governance-docs/default.aspx. Nominating and Governance CommitteeNOMINATING AND GOVERNANCE COMMITTEE
The Nominating and Governance Committee of the Board consists of threetwo non-employee directors, Messrs. Barton, Hoag (Chair) and Smith. Mr. Smith was appointed toAmbassador Rice served on the Nominating and Governance Committee in 2017.through her resignation date, January 20, 2021. Each member ofdirector serving on the Nominating and Governance Committee is independent under the listing standards of the NASDAQ Stock Market. The Nominating and Governance Committee reviews and approves candidates for election and to fill 11
vacancies on the Board, includingre-nominations of members whose terms are due to expire, and reviews and provides guidance to the Board on corporate governance matters. The Nominating and Governance Committee met two times in 2017. Messrs. Barton and Hoag2020. Each member attended all the Nominating and Governance Committee meetings andheld in 2020, other than Mr. Smith waswho did not a member of the Committee at the time of the meetings in 2017.attend one meeting. The Board has adopted a written charter for the Nominating and Governance Committee, which is available on the Company’s Investor Relationsour investor relations website athttp:https://ir.netflix.com/governance.cfmir.netflix.net/governance/governance-docs/default.aspx. Stock Option Committee
The Stock Option Committee of the Board consisted of one employee director in 2017: Mr. Hastings. The Stock Option Committee had authority to review and approve the stock options granted to employees, other than to directors or executive officers of the Company pursuant to the Company’s option grant program. The Board has also authorized certain executive officers to review and approve these stock options on behalf of the Stock Option Committee. The Board retained the power to adjust, eliminate or otherwise modify the Company’s option granting practices, any option allocation or portions thereof not previously granted, including without limitation the monthly option formula.
The Stock Option Committee did not hold meetings in 2017. The Stock Option Committee acts pursuant to powers delegated to it by the Board. The Board has not adopted a written charter for the Stock Option Committee. In 2018, the Board dissolved the Stock Option Committee.
Compensation Committee Interlocks and Insider Participation
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION None of the Company’sour executive officers serves on the board of directors or compensation committee of a company that has an executive officer that serves on the Company’sour Board or Compensation Committee. No member of the Company’sour Board is an executive officer of a company in which one of the Company’sour executive officers serves as a member of the board of directors or compensation committee of that company. TheIn 2020, the Compensation Committee consistsconsisted of Messrs. Battle,Belmer, Döpfner (from March 2020), Haley, and Hoag (through March 2020) and Ms. Sweeney, none of whom is currently or was formerly an officer or employee of the Company. None of Messrs. Battle,Belmer, Döpfner, Haley, or Hoag or Ms. Sweeney had a relationship with the Company that required disclosure under Item 404 of RegulationS-K. In addition to Messrs. Battle,Belmer, Döpfner, Haley, and Hoag and Ms. Sweeney, the Company’sour Co-Chief Executive Officer, Reed Hastings, and Chief ExecutiveTalent Officer participated in the executive compensation process for the year ended December 31, 2020 as described below in the section entitled “Compensation Discussion and Analysis.”
Director IndependencePOLICY REGARDING DIRECTOR ATTENDANCE AT THE ANNUAL MEETING
Our policy regarding directors’ attendance at the annual meetings of stockholders and their attendance record at last year’s annual meeting of stockholders can be found on our Investor Relations website at https://ir.netflix.net/governance/governance-docs/default.aspx.
THE BOARD’S LEADERSHIP STRUCTURE The Board combines the role of Chairman and Chief Executive. While the Board reassesses maintaining the combined role from time to time, the Board believes that Mr. Hastings, a Co-Chief Executive Officer, is best situated to serve as Chairman because he is the director most familiar with our business and industry and is therefore best able to identify the strategic priorities to be discussed by the Board. The Board also believes that combining the role of Chairman and Co-Chief Executive Officer facilitates information flow between management and the Board and fosters strategic development and execution. The Board has appointed Jay Hoag as its lead independent director. As lead independent director, Mr. Hoag’s responsibilities include: coordinating the activities of the independent directors, and authorization to call meetings of the independent directors; coordinating with the Co-Chief Executive Officers and corporate secretary to set the agenda for Board meetings, soliciting and taking into account suggestions from other members of the Board; chairing executive sessions of the independent directors; providing feedback and perspective to the Co-Chief Executive Officers about discussions among the independent directors; helping facilitate communication among the Co-Chief Executive Officers and the independent directors; presiding at Board meetings where the Chair is not present; and performing other duties assigned from time to time by the Board. In addition, the Board maintains effective independent oversight through a number of governance practices, including, open and direct communication with management, input on meeting agendas, annual performance evaluations and regular executive sessions. How to Communicate with Us COMMUNICATIONS WITH THE BOARD We provide a process for stockholders to send communications to the Board through the email address board@netflix.com. Information regarding stockholder communications with the Board can be found on the Company’s Investor Relations website at https://ir.netflix.net/governance/governance-docs/default.aspx. | | | | | 24 | | | | |
How We are Paid Since 2015, none of our directors receive cash for services they provide as directors or members of Board committees but may be reimbursed for their reasonable expenses for attending Board and Board committee meetings. Each non-employee director receives stock options pursuant to the Director Equity Compensation Plan. The Director Equity Compensation Plan provides for a monthly grant of stock options to each non-employee director of the Company in consideration for services provided to us and subject to the terms and conditions of our equity compensation plans. We believe that for our company, compensating directors only with options is appropriate and creates the right incentives and long-term value alignment with stockholders. Without long-term value creation, directors are not compensated as the intrinsic value of options on dates of grant is zero. The actual number of options granted each month to each of our directors is determined by the following formula: $25,000 / ([fair market value on the date of grant] x 0.40). Each monthly grant is made on the first trading day of the month, is fully vested upon grant and is exercisable at a strike price equal to the fair market value on the date of grant. The table below sets forth information concerning the compensation of our non-employee directors during 2020. In each of 2018 and 2019, Compensia advised the Board on our compensation program for our Board for the upcoming year, based on a comparison against our peer group’s board compensation programs and other compensation-related developments. The prior time Compensia reviewed our Board’s compensation program was in 2015, and we adjusted our Board’s compensation program in 2016. We have not made any changes to the compensation program for our Board since then. | | | | | | | | | Name | | Option Awards ($)(1) | | | Total ($) | | | | | Richard N. Barton | | | 376,943 | | | | 376,943 | (4) | | | | Rodolphe Belmer | | | 377,175 | | | | 377,175 | (5) | | | | Mathias Döpfner | | | 377,201 | | | | 377,201 | (6) | | | | Timothy M. Haley | | | 376,943 | | | | 376,943 | (7) | | | | Jay C. Hoag | | | 376,943 | | | | 376,943 | (8) | | | | Leslie Kilgore | | | 376,943 | | | | 376,943 | (9) | | | | Strive Masiyiwa(2) | | | — | | | | — | | | | | Ann Mather | | | 376,943 | | | | 376,943 | (10) | | | | Susan E. Rice(3) | | | 377,017 | | | | 377,017 | (11) | | | | Bradford L. Smith | | | 376,943 | | | | 376,943 | (12) | | | | Anne M. Sweeney | | | 376,943 | | | | 376,943 | (13) |
(1) | Option awards reflect the monthly grant of stock options to each non-employee director on the dates and at the aggregate grant date fair values computed in accordance with FASB ASC Topic 718 as shown below. Only options to purchase whole shares are granted with any remaining amount of the grant value carried over to the next monthly grant. The differences in option award values for each of Messrs. Belmer and Döpfner and Ambassador Rice reflect the different carryover amounts relating to the appointment month for each director. For a discussion of the assumptions made in the valuation reflected in the Option Awards column, refer to Note 9 to our consolidated financial statements for the fiscal year ended December 31, 2020 in our Form 10-K filed with the SEC on January 28, 2021. |
| | | | | | Grant Date | | Fair Value ($) | | | 1/2/2020 | | | | 29,336 | | | | 2/3/2020 | | | | 29,485 | | | | 3/2/2020 | | | | 29,407 | | | | 4/1/2020 | | | | 31,573 | | | | 5/1/2020 | | | | 31,800 | | | | 6/1/2020 | | | | 31,752 | | | | 7/1/2020 | | | | 32,038 | | | | 8/3/2020 | | | | 32,381 | | | | 9/1/2020 | | | | 32,127 | | | | 10/1/2020 | | | | 32,261 | | | | 11/2/2020 | | | | 32,618 | | | | 12/1/2020 | | | | 32,166 | |
(2) | Mr. Strive Masiyiwa was appointed to the Board on December 16, 2020 and did not receive a prorated grant of stock options. |
(3) | Ambassador Susan Rice served on the Board through January 20, 2021. |
(4) | Aggregate number of option awards outstanding held by Mr. Barton at December 31, 2020 was 31,411. |
(5) | Aggregate number of option awards outstanding held by Mr. Belmer at December 31, 2020 was 4,078. |
(6) | Aggregate number of option awards outstanding held by Mr. Döpfner at December 31, 2020 was 4,654. |
(7) | Aggregate number of option awards outstanding held by Mr. Haley at December 31, 2020 was 37,361. |
(8) | Aggregate number of option awards outstanding held by Mr. Hoag at December 31, 2020 was 34,162. |
(9) | Aggregate number of option awards outstanding held by Ms. Kilgore at December 31, 2020 was 11,240. |
(10) | Aggregate number of option awards outstanding held by Ms. Mather at December 31, 2020 was 16,401. |
(11) | Aggregate number of option awards outstanding held by Ms. Rice at December 31, 2020 was 4,426. |
(12) | Aggregate number of option awards outstanding held by Mr. Smith at December 31, 2020 was 23,407. |
(13) | Aggregate number of option awards outstanding held by Ms. Sweeney at December 31, 2020 was 8,240. |
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Certain Relationships and Related Transactions AGREEMENTS WITH DIRECTORS AND EXECUTIVE OFFICERS We have entered into indemnification agreements with each of our directors and executive officers. These agreements require us to indemnify such individuals, to the fullest extent permitted by Delaware law, for certain liabilities to which they may become subject as a result of their affiliation with us. PROCEDURES FOR APPROVAL OF RELATED PARTY TRANSACTIONS We have a written policy concerning the review and approval of related party transactions. Potential related party transactions are identified through an internal review process that includes a review of payments made in connection with transactions in which related persons may have had a direct or indirect material interest. Those transactions that are determined to be related party transactions under Item 404 of Regulation S-K are submitted for review by the Audit Committee for approval and to conduct a conflicts-of-interest analysis. The individual identified as the “related party” may not participate in any review or analysis of the related party transaction.
| | | | | | | Proposal 2 Our Auditors Ratification of Appointment of Independent Registered Public Accounting Firm | | | THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2021 | |
| | | |
The Audit Committee of the Board has selected Ernst & Young LLP (“Ernst & Young”), an independent registered public accounting firm, to audit the financial statements of the Company for the year ending December 31, 2021. We are submitting its selection of Ernst & Young for ratification by the stockholders at the Annual Meeting. A representative of Ernst & Young is expected to be present at the Annual Meeting, will have the opportunity to make a statement and is expected to be available to respond to appropriate questions. Ernst & Young has served as our independent registered public accounting firm since March 21, 2012. Neither applicable law nor our bylaws require that stockholders ratify the selection of Ernst & Young as our independent registered public accounting firm. However, we are submitting the selection of Ernst & Young to stockholders for ratification as a matter of good corporate practice. If stockholders do not ratify the selection, the Audit Committee will reconsider whether to retain Ernst & Young. Even if the selection is ratified, the Audit Committee, at its discretion, may change the appointment at any time during the year if they determine that such a change would be in the best interests of the Company and our stockholders. PRINCIPAL ACCOUNTANT FEES AND SERVICES During 2020 and 2019, fees for services provided by Ernst & Young was as follows (in thousands): | | | | | | | | | | | 2020 | | | 2019 | | | | | Audit Fees | | $ | 5,351 | | | $ | 4,936 | | | | | Audit-Related Fees | | | 70 | | | | — | | | | | Tax Fees | | | 2,096 | | | | 2,927 | | | | | Total | | $ | 7,517 | | | $ | 7,863 | |
Audit Fees include amounts related to the audit of our annual financial statements and internal control over financial reporting, and quarterly review of the financial statements included in our Quarterly Reports on Form 10-Q. Audit fees also include amounts related to accounting consultations and services rendered in connection with the Company’s issuance of senior notes in 2020 and 2019, respectively, as well as fees for statutory audit filings. Audit-Related Fees include fees related to assurance and related services that are reasonably related to the performance of the audit or review of our financial statements, including attestation services that are not required by statute or regulation. Tax Fees include fees billed for tax compliance, tax advice and tax planning services. There were no other fees billed by Ernst & Young for services rendered to us, other than the services described above, in 2020 and 2019. The Audit Committee has determined that eachthe rendering of Messrs. Barton, Battle, Belmer, Haley, Hoagnon-audit services by Ernst & Young was compatible with maintaining their independence. POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT SERVICES OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Audit Committee pre-approves all audit and Smith,permissible non-audit services provided by our independent registered public accounting firm. These services may include audit services, audit-related services, tax and Mses. Kilgore, Matherother services. Pre-approval is generally provided for up to one year, and Sweeneyany pre-approval is detailed as to the particular service or category of services. The independent registered public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent underregistered
public accounting firm in accordance with this pre-approval, and the applicable rulesfees for the services performed to date. The Audit Committee may also pre-approve particular services on a case-by-case basis. During 2020, services provided by Ernst & Young were pre-approved by the Audit Committee in accordance with this policy. Required Vote The affirmative vote of the SEC and the listing standardsmajority of the NASDAQ Stock Market;Votes Cast is required for ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2021. The vote is an advisory vote, and therefore every membernot binding. Netflix Recommendation | | | | | The Board unanimously recommends that the stockholders vote “FOR” the ratification of the appointment of Ernst & Young LLP as the company’s independent registered public accounting firm for the year ending December 31, 2021. |
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Report of the Audit Committee Compensation of the Board The Audit Committee engages and Nominatingsupervises the Company’s independent registered public accounting firm and Governanceoversees the Company’s financial reporting process on behalf of the Board. Management has the primary responsibility for the preparation of financial statements and the reporting process, including the systems of internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed the audited financial statements in the Company’s annual report on Form 10-K for the year ended December 31, 2020 with management, including a discussion of the quality of the accounting principles, the reasonableness of significant judgments made by management and the clarity of disclosures in the financial statements. The Audit Committee reviewed with Ernst & Young LLP (“Ernst��& Young”), the Company’s independent registered public accounting firm, who is responsible for expressing an independent directoropinion on the conformity of the Company’s audited financial statements with accounting principles generally accepted in accordancethe United States of America, its judgments as to the quality of the Company’s accounting principles and the other matters required to be discussed with those standards. See “Proceduresthe Audit Committee under the auditing standards generally accepted in the United States of America, including the matters required by Auditing Standard No. 1301, Communications with Audit Committees, issued by the Public Company Accounting Oversight Board (“PCAOB”). In addition, the Audit Committee has discussed with Ernst & Young its independence from management and the Company, including the written disclosures and the letter regarding its independence as required by PCAOB Rule 3526, Communication with Audit Committees Concerning Independence. The Audit Committee also reviewed the fees paid to Ernst & Young during the year ended December 31, 2020 for Approvalaudit and non-audit services, which fees are described under the heading “Principal Accountant Fees and Services.” The Audit Committee has determined that the rendering of Related Party Transactions”all non-audit services by Ernst & Young were compatible with maintaining its independence. The Audit Committee discussed with Ernst & Young the overall scope and plans for its audit. The Audit Committee met with Ernst & Young, with and without management present, to discuss the results of its examinations, its evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting. Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in this Proxy Statementthe annual report on Form 10-K for more information.the year ended December 31, 2020, for filing with the Securities and Exchange Commission. Audit Committee of the Board Richard N. Barton Leslie Kilgore Ann Mather 12
Consideration of Director Nominees
OUR COMPANY EXECUTIVE OFFICERS
Our executive officers as of April 23, 2021 are as follows: | | | | | Stockholder Nominees The Nominating and Governance Committee considers properly submitted stockholder nominations for candidates for membership on the Board as described belowabove under “Identifying and Evaluating Nominees for Directors.” Any stockholder nominations proposed for consideration by the Nominating and Governance Committee should include the nominee’s name and qualifications for Board membership. In addition, they should be submitted within the time frame as specified under “Stockholder Proposals” above and mailed to: Netflix, Inc., 100 Winchester Circle, Los Gatos, California 95032, Attention: Secretary. Director Qualifications
In discharging its responsibilitiesOur bylaws provide a proxy access right for stockholders, pursuant to which a stockholder, or a group of up to 20 stockholders, owning at least three percent of outstanding shares of our common stock continuously for at least three years, may nominate candidates for electionand include in our annual meeting proxy materials director nominees constituting up to the greater of (a) two directors or (b) twenty percent of the Board, subject to certain limitations and provided that the stockholders and nominees satisfy the requirements specified in our bylaws.
OUR BOARD EVALUATION PROCESS Each year, our Board conducts a self-evaluation process to help assure and enhance its performance. This process is overseen by the Nominating and Governance Committee, has not specified any minimum qualifications for serving onand involves interviews of each director by our Chief Legal Officer. Feedback is sought primarily in the Board. However,following areas: (a) the NominatingBoard’s effectiveness, structure, culture and Governance Committee endeavorscomposition, (b) the quality of and access to evaluate, propose and approve candidates with business experience, diversity as well as personal skills and knowledge with respect to technology, finance, marketing, financial reporting and any other areas that may be expected to contribute to an effective Board. With respect to diversity, the committee may consider such factors as differences in viewpoint, professional experience, education, skills and other individual qualifications and attributes that contribute to board heterogeneity, including characteristics such as gender, race and national origin. Identifying and Evaluating Nominees for Directors
The Nominating and Governance Committee utilizes a variety of methods for identifying and evaluating nominees for director. Candidates may come to the attention of the Nominating and Governance Committee through management, current Board members, stockholders or other persons. These candidates are evaluated at meetings of the Nominating and Governance Committee as necessary and discussed by the members of the Nominating and Governance Committee from time to time. Candidates may be considered at any point during the year. As described above, the Nominating and Governance Committee considers properly submitted stockholder nominations for candidates for the Board. Following verification of the stockholder status of persons proposing candidates, recommendations are aggregated and considered by the Nominating and Governance Committee. If any materials are provided by a stockholder in connection with the nomination of a director candidate, such materials are forwarded to the Nominating and Governance Committee. The Nominating and Governance Committee also reviews materials provided by professional search firms or other parties in connection with a nominee who is not proposed by a stockholder.
Communicationsinformation shared with the Board about our business and (c) performance of the directors and quality of Board discussions.
How We Govern and are Governed OUR APPROACH TO CORPORATE GOVERNANCE Corporate Governance Philosophy Netflix operates in a dynamic industry and has been in a state of constant innovation since inception. We have redefined how people watch video—first through DVD-by-mail, then streaming video, and now as one of the world’s leading entertainment services with approximately 208 million memberships in 190 countries. Our success has not gone unnoticed, and we are seeing increasing competition, even as this dynamic market continues to evolve. Our corporate governance structure is built against this backdrop. Governance, in this context, means finding the right balance of rights and responsibilities among stockholders, the Board, and management, and ensuring that there are appropriate checks and balances in place. With the rapid evolution of technology and the changing media landscape, we are continually adjusting our service to meet the dynamic needs and desires of our consumers. Our governance structure is built to help us to do that. Our focus is on creating long-term value for our stockholders, and we have been successful at that – since our initial public offering in 2002, annualized total stockholder return through December 31, 2020 was 40%. Our governance structure is unconventional. We have several provisions that give our Board and our management team the freedom to be forward-thinking, such as making investments to build our own production studios and developing our own animation capabilities, with the confidence that they will be able to see those investments to fruition. At the same time, we have paid attention to our stockholders and increased our accountability to them by adopting provisions such as proxy access. We are proud of our governance structure, both because of how it has supported our success to date and for being innovative, such as the way that our Board has unfettered access to management and is able to seek information directly from employees all around the enterprise. We strive to stay in tune with our ownership base. Our Board and our management team engage directly with our stockholders, and our Board and its committees consider stockholders’ feedback in assessing our governance structure, including our compensation program. These discussions provide a good opportunity to share views and answer questions; the input from our stockholders will continue to inform our ongoing evaluation of our structure. We believe our approach to governance will continue to provide the greatest benefit to Netflix and our stockholders. We realize that elements of our structure may not fit within the standard corporate governance practices and that some stockholders take a different view. But we believe that Netflix’s long-term value is currently best optimized with our approach to governance. The Company provides a process for stockholders to send communications to the Board. Information regarding stockholder communications with the Board can be found on the Company’s Investor Relations website athttp://ir.netflix.com/governance.cfm.
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Policy Regarding Director Attendance at the Annual MeetingStockholder Engagement and 2020 Stockholder Proposals
The Company’s policy regarding directors’ attendance at the annual meetings of stockholders and their attendance record at last year’sAt our 2020 annual meeting, stockholders presented three proposals for vote. One proposal requested additional disclosure around political spending, and the proposal did not receive majority support from stockholders. The second proposal requested that we lower the two-thirds supermajority requirement for amending our charter and bylaws to a simple majority. This proposal did receive majority support from stockholders. The third proposal sought a public report regarding our equal employment opportunity policy, and received less than 1% support from stockholders.
We consider the voting results for stockholders proposals in our Board discussions and as we contemplate our governance structure. We also engaged with stockholders to solicit feedback on a broad range of topics, including these stockholder proposals. We held 10 virtual meetings in the fall of 2020 with stockholders can be found on the Company’s Investor Relations website athttp://ir.netflix.com/governance.cfm. The Rolerepresenting approximately 25% of our common stock outstanding. Members of the Board, accompanied by Company representatives as appropriate, participated in Risk Oversighteach of these conversations. We also held numerous engagement meetings earlier in 2020, prior to our 2020 annual meeting.
In addition to governance and compensation matters, our discussions in 2020 centered on our approach to environmental, social and governance (ESG) matters; diversity, equity and inclusion; our response to the COVID-19 pandemic; and our dual CEO management structure. Investors expressed a desire to see improved disclosure on environmental and social matters, which the recent hire of our Sustainability Officer is intended to help address. We have also recently increased our disclosure about these topics partly in response to investor feedback by publishing an Inclusion Report in January 2021 along with our EEO-1 and ESG reports. We also discussed our approach to governance, including our goal of ensuring that we are best able to execute our long-term vision, which we believe is in the best interests of all stockholders. Investors understood our rationale for our governance structure, even if they disagreed with it. While investors inquired about our dual CEO model and how it works for Netflix, none expressed that it was inappropriate for us. We explained that the dual CEO model formalized the prior working relationship between Reed and Ted, and was an effective leadership model to further support our continued growth and international expansion. Stockholders gave us high marks for our response to the COVID-19 pandemic, such as our focus on employee well-being and our efforts to support the creative industry through our establishment of hardship funds. The feedback on our compensation program was limited, with many investors understanding and supportive of our approach to compensation. While we did not hear thematic concerns about our compensation program during our meetings, one stockholder questioned some components of our compensation program, including the ability of our executives to allocate their compensation between cash and stock options. We further note that our current practice with respect to our supermajority provision is a mainstream practice. According to data from FactSet, more than forty percent of S&P 500 companies have supermajority provisions in place, and our threshold is common and among the lower thresholds that companies have adopted. After consideration of stockholder feedback, industry trend data, and our corporate governance philosophy, we decided at this point not to lower the voting requirement from its current supermajority level. A simple majority vote requirement already applies to most corporate matters submitted to a vote of our stockholders. We believe that in the current dynamic business environment, the supermajority we have in place is appropriate to increase stability in our operations, while still being set low enough for stockholders to have a voice on issues where there is strong consensus. We will continue to monitor and evaluate this issue.
THE ROLE OF THE BOARD IN RISK OVERSIGHT The Board’s role in the Company’sour risk oversight process includes reviewing and discussing with members of management areas of material risk to the Company, including strategic, operational, financial and legal risks. The Board as a whole primarily deals with matters related to strategic and operational risk. The Audit Committee deals with matters of financial and legal risk, including reviewing periodically the Company’s exposure to cybersecurity risk. The Compensation Committee addresses risks related to compensation and other talent-related matters. The Nominating and Governance Committee manages risks associated with Board independence and corporate governance. Committees report to the full Board regarding their respective considerations and actions. Throughout 2020, in response to the COVID-19 pandemic, management, with the support of our Board and Audit Committee, engaged, assessed and led our efforts to mitigate operational, employee and other risks to our business associated with the pandemic. How We are Organized BOARD MEETINGS AND COMMITTEES The Board’s Leadership StructureBoard held five meetings during 2020. Each Board member attended at least 75% of the aggregate of the total number of Board meetings and meetings of the Board committees. As of the date of this Proxy Statement, the Board has three standing committees: (1) the Compensation Committee; (2) the Audit Committee; and (3) the Nominating and Governance Committee. COMPENSATION COMMITTEE In 2020, the Compensation Committee of the Board consisted of four non-employee directors: Messrs. Belmer, Döpfner, Haley (Chair), and Ms. Sweeney. Mr. Hoag also served on the Compensation Committee until Mr. Döpfner’s appointment to the Compensation Committee in March 2020. Each member of the Compensation Committee is independent in compliance with the rules of the SEC and the listing standards of the NASDAQ Stock Market as they pertain to Compensation Committee members. Each of the Compensation Committee members is also a non-employee director under Rule 16b-3 of the Exchange Act and an outside director under section 162(m) of the Internal Revenue Code of 1986, as amended. The Compensation Committee reviews and approves all forms of compensation to be provided to our executive officers and directors. For a description of the role of the executive officers in recommending compensation and the role of any compensation consultants, please see the section entitled “Compensation Discussion and Analysis” below. The Compensation Committee held four meetings in 2020. Each member attended all the Compensation Committee meetings held in 2020. The Report of the Compensation Committee is included in this Proxy Statement. In addition, the Board has adopted a written charter for the Compensation Committee, which is available on our Investor Relations website at https://ir.netflix.net/governance/governance-docs/default.aspx. AUDIT COMMITTEE The Audit Committee of the Board consists of three non-employee directors: Mr. Barton, and Mses. Kilgore and Mather (Chair), each of whom is independent in compliance with the rules of the SEC and the listing standards of the NASDAQ Stock Market as they pertain to audit committee members. The Board has determined that Ms. Mather is an audit committee financial expert as defined by Item 407(d)(5)(ii) of Regulation S-K of the Securities Act of 1933, as amended. | | | | | 22 | | | | |
The Audit Committee engages the Company’s independent registered public accounting firm, reviews the Company’s financial controls, evaluates the scope of the annual audit, reviews audit results, consults with management and the Company’s independent registered public accounting firm prior to the presentation of financial statements to stockholders and, as appropriate, initiates inquiries into aspects of the Company’s internal accounting controls and financial affairs. The Audit Committee met seven times in 2020. Each member attended at least 75% of the Audit Committee meetings held in 2020. The Report of the Audit Committee is included in this Proxy Statement. In addition, the Board has adopted a written charter for the Audit Committee, which is available on our Investor Relations website at https://ir.netflix.net/governance/governance-docs/default.aspx. NOMINATING AND GOVERNANCE COMMITTEE The Nominating and Governance Committee of the Board consists of two non-employee directors, Messrs. Hoag (Chair) and Smith. Ambassador Rice served on the Nominating and Governance Committee through her resignation date, January 20, 2021. Each director serving on the Nominating and Governance Committee is independent under the listing standards of the NASDAQ Stock Market. The Nominating and Governance Committee reviews and approves candidates for election and to fill vacancies on the Board, including re-nominations of members whose terms are due to expire, and reviews and provides guidance to the Board on corporate governance matters. The Nominating and Governance Committee met two times in 2020. Each member attended all the Nominating and Governance Committee meetings held in 2020, other than Mr. Smith who did not attend one meeting. The Board has adopted a written charter for the Nominating and Governance Committee, which is available on our investor relations website at https://ir.netflix.net/governance/governance-docs/default.aspx. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION None of our executive officers serves on the board of directors or compensation committee of a company that has an executive officer that serves on our Board or Compensation Committee. No member of our Board is an executive officer of a company in which one of our executive officers serves as a member of the board of directors or compensation committee of that company. In 2020, the Compensation Committee consisted of Messrs. Belmer, Döpfner (from March 2020), Haley, Hoag (through March 2020) and Ms. Sweeney, none of whom is currently or was formerly an officer or employee of the Company. None of Messrs. Belmer, Döpfner, Haley, or Hoag or Ms. Sweeney had a relationship with the Company that required disclosure under Item 404 of Regulation S-K. In addition to Messrs. Belmer, Döpfner, Haley, and Hoag and Ms. Sweeney, our Co-Chief Executive Officer, Reed Hastings, and Chief Talent Officer participated in the executive compensation process for the year ended December 31, 2020 as described below in the section entitled “Compensation Discussion and Analysis.” POLICY REGARDING DIRECTOR ATTENDANCE AT THE ANNUAL MEETING Our policy regarding directors’ attendance at the annual meetings of stockholders and their attendance record at last year’s annual meeting of stockholders can be found on our Investor Relations website at https://ir.netflix.net/governance/governance-docs/default.aspx.
THE BOARD’S LEADERSHIP STRUCTURE The Board combines the role of Chairman and Chief Executive. While the Board reassesses maintaining the combined role from time to time, the Board believes that the ChiefMr. Hastings, a Co-Chief Executive Officer, is best situated to serve as Chairman because he is the director most familiar with the Company’sour business and industry and is therefore best able to identify the strategic priorities to be discussed by the Board. The Board also believes that combining the role of Chairman and ChiefCo-Chief Executive Officer facilitates information flow between management and the Board and fosters strategic development and execution. The Board has appointed Jay Hoag as its lead independent director. As lead independent director, Mr. Hoag’s responsibilities include: coordinating the activities of the independent directors, and is authorizedauthorization to call meetings of the independent directors; coordinating with the chief executive officerCo-Chief Executive Officers and corporate secretary to set the agenda for Board meetings, soliciting and taking into account suggestions from other members of the Board; chairing executive sessions of the independent directors; providing feedback and perspective to the chief executive officerCo-Chief Executive Officers about discussions among the independent directors; helping facilitate communication betweenamong the chief executive officerCo-Chief Executive Officers and the independent directors; presiding at Board meetings where the Chair is not present; and
performing other duties assigned from time to time by the Board. In addition, the Board maintains effective independent oversight through a number of governance practices, including, open and direct communication with management, input on meeting agendas, annual performance evaluations and regular executive sessions. How to Communicate with Us 15COMMUNICATIONS WITH THE BOARD
We provide a process for stockholders to send communications to the Board through the email address board@netflix.com. Information regarding stockholder communications with the Board can be found on the Company’s Investor Relations website at https://ir.netflix.net/governance/governance-docs/default.aspx. | | | | | 24 | | | | |
How We are Paid Since 2015, none of our directors receive cash for services they provide as directors or members of Board committees but may be reimbursed for their reasonable expenses for attending Board and Board committee meetings. Each non-employee director receives stock options pursuant to the Director Equity Compensation Plan. The Director Equity Compensation Plan provides for a monthly grant of stock options to each non-employee director of the Company in consideration for services provided to us and subject to the terms and conditions of our equity compensation plans. We believe that for our company, compensating directors only with options is appropriate and creates the right incentives and long-term value alignment with stockholders. Without long-term value creation, directors are not compensated as the intrinsic value of options on dates of grant is zero. The actual number of options granted each month to each of our directors is determined by the following formula: $25,000 / ([fair market value on the date of grant] x 0.40). Each monthly grant is made on the first trading day of the month, is fully vested upon grant and is exercisable at a strike price equal to the fair market value on the date of grant. The table below sets forth information concerning the compensation of our non-employee directors during 2020. In each of 2018 and 2019, Compensia advised the Board on our compensation program for our Board for the upcoming year, based on a comparison against our peer group’s board compensation programs and other compensation-related developments. The prior time Compensia reviewed our Board’s compensation program was in 2015, and we adjusted our Board’s compensation program in 2016. We have not made any changes to the compensation program for our Board since then. | | | | | | | | | Name | | Option Awards ($)(1) | | | Total ($) | | | | | Richard N. Barton | | | 376,943 | | | | 376,943 | (4) | | | | Rodolphe Belmer | | | 377,175 | | | | 377,175 | (5) | | | | Mathias Döpfner | | | 377,201 | | | | 377,201 | (6) | | | | Timothy M. Haley | | | 376,943 | | | | 376,943 | (7) | | | | Jay C. Hoag | | | 376,943 | | | | 376,943 | (8) | | | | Leslie Kilgore | | | 376,943 | | | | 376,943 | (9) | | | | Strive Masiyiwa(2) | | | — | | | | — | | | | | Ann Mather | | | 376,943 | | | | 376,943 | (10) | | | | Susan E. Rice(3) | | | 377,017 | | | | 377,017 | (11) | | | | Bradford L. Smith | | | 376,943 | | | | 376,943 | (12) | | | | Anne M. Sweeney | | | 376,943 | | | | 376,943 | (13) |
(1) | Option awards reflect the monthly grant of stock options to each non-employee director on the dates and at the aggregate grant date fair values computed in accordance with FASB ASC Topic 718 as shown below. Only options to purchase whole shares are granted with any remaining amount of the grant value carried over to the next monthly grant. The differences in option award values for each of Messrs. Belmer and Döpfner and Ambassador Rice reflect the different carryover amounts relating to the appointment month for each director. For a discussion of the assumptions made in the valuation reflected in the Option Awards column, refer to Note 9 to our consolidated financial statements for the fiscal year ended December 31, 2020 in our Form 10-K filed with the SEC on January 28, 2021. |
| | | | | | PROPOSAL TWOGrant Date | | Fair Value ($) | | | 1/2/2020 | | | | 29,336 | | | | 2/3/2020 | | | | 29,485 | | | | 3/2/2020 | | | | 29,407 | | | | 4/1/2020 | | | | 31,573 | | | | 5/1/2020 | | | | 31,800 | | | | 6/1/2020 | | | | 31,752 | | | | 7/1/2020 | | | | 32,038 | | | | 8/3/2020 | | | | 32,381 | | | | 9/1/2020 | | | | 32,127 | | | | 10/1/2020 | | | | 32,261 | | | | 11/2/2020 | | | | 32,618 | | | | 12/1/2020 | | | | 32,166 | |
(2) | Mr. Strive Masiyiwa was appointed to the Board on December 16, 2020 and did not receive a prorated grant of stock options. |
(3) | Ambassador Susan Rice served on the Board through January 20, 2021. |
(4) | Aggregate number of option awards outstanding held by Mr. Barton at December 31, 2020 was 31,411. |
(5) | Aggregate number of option awards outstanding held by Mr. Belmer at December 31, 2020 was 4,078. |
(6) | Aggregate number of option awards outstanding held by Mr. Döpfner at December 31, 2020 was 4,654. |
(7) | Aggregate number of option awards outstanding held by Mr. Haley at December 31, 2020 was 37,361. |
(8) | Aggregate number of option awards outstanding held by Mr. Hoag at December 31, 2020 was 34,162. |
(9) | Aggregate number of option awards outstanding held by Ms. Kilgore at December 31, 2020 was 11,240. |
(10) | Aggregate number of option awards outstanding held by Ms. Mather at December 31, 2020 was 16,401. |
(11) | Aggregate number of option awards outstanding held by Ms. Rice at December 31, 2020 was 4,426. |
(12) | Aggregate number of option awards outstanding held by Mr. Smith at December 31, 2020 was 23,407. |
(13) | Aggregate number of option awards outstanding held by Ms. Sweeney at December 31, 2020 was 8,240. |
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Certain Relationships and Related Transactions AGREEMENTS WITH DIRECTORS AND EXECUTIVE OFFICERS We have entered into indemnification agreements with each of our directors and executive officers. These agreements require us to indemnify such individuals, to the fullest extent permitted by Delaware law, for certain liabilities to which they may become subject as a result of their affiliation with us. PROCEDURES FOR APPROVAL OF RELATED PARTY TRANSACTIONS We have a written policy concerning the review and approval of related party transactions. Potential related party transactions are identified through an internal review process that includes a review of payments made in connection with transactions in which related persons may have had a direct or indirect material interest. Those transactions that are determined to be related party transactions under Item 404 of Regulation S-K are submitted for review by the Audit Committee for approval and to conduct a conflicts-of-interest analysis. The individual identified as the “related party” may not participate in any review or analysis of the related party transaction.
| | | | | | | Proposal 2 Our Auditors Ratification of Appointment of Independent Registered Public Accounting Firm | | | THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2021 | |
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The Audit Committee of the Board of Directors has selected Ernst & Young LLP (“Ernst & Young”), an independent registered public accounting firm, to audit the financial statements of Netflix, Inc.the Company for the year ending December 31, 2018. The Company is2021. We are submitting its selection of Ernst & Young for ratification by the stockholders at the Annual Meeting. A representative of Ernst & Young is expected to be present at the Annual Meeting, will have the opportunity to make a statement and is expected to be available to respond to appropriate questions. Ernst & Young has served as our independent registered public accounting firm since March 21, 2012. Neither applicable law nor the Company’s Bylawsour bylaws require that stockholders ratify the selection of Ernst & Young as the Company’sour independent registered public accounting firm. However, the Company iswe are submitting the selection of Ernst & Young to stockholders for ratification as a matter of good corporate practice. If stockholders do not ratify the selection, the Audit Committee will reconsider whether to retain Ernst & Young. Even if the selection is ratified, the Audit Committee, at its discretion, may change the appointment at any time during the year if they determine that such a change would be in the best interests of the Company and itsour stockholders. Principal Accountant Fees and Services
PRINCIPAL ACCOUNTANT FEES AND SERVICES During 20172020 and 2016,2019, fees for services provided by Ernst & Young was as follows (in thousands): | | | | | | | 2020 | | | 2019 | | | | 2017 | | 2016 | | | Audit Fees | | $ | 3,957 | | | $ | 3,123 | | | $ | 5,351 | | | $ | 4,936 | | | Audit-Related Fees | | | | 70 | | | | — | | | Tax Fees | | 1,275 | | | 1,791 | | | | 2,096 | | | | 2,927 | | | | | | | | | | Total | | $ | 5,232 | | | $ | 4,914 | | | $ | 7,517 | | | $ | 7,863 | | | | | | | | | |
Audit Feesinclude amounts related to the audit of the Company’sour annual financial statements and internal control over financial reporting, and quarterly review of the financial statements included in the Company’sour Quarterly Reports onForm 10-Q. Audit fees also include amounts related to accounting consultations and services rendered in connection with the Company’s issuance of senior notes in 20172020 and 2016,2019, respectively, as well as fees for statutory audit filings. Audit-Related Fees include fees related to assurance and related services that are reasonably related to the performance of the audit or review of our financial statements, including attestation services that are not required by statute or regulation. Tax Fees include fees billed for tax compliance, tax advice and tax planning services.
There were no other fees billed by Ernst & Young for services rendered to the Company, other than the services described above, in 2017 and 2016.Required Vote
The Audit Committee has determined thatfour nominees receiving the renderinghighest number ofnon-audit services by Ernst & Young was compatible with maintaining their independence. affirmative Votes Cast will each be elected as Class I directors. Netflix Recommendation | | | | | The Board unanimously recommends that the stockholders vote “FOR” the nominees listed above.
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Policy on Audit CommitteeWho We Are
BOARD OVERVIEW Our Board is composed of 12 highly experienced, talented, and qualified directors with experience as board members and executives at some of the world’s most successful companies. We believe that the Board is well situated to navigate the changing competitive terrain that Netflix operates within. The Board has led Netflix through its evolution from a US Pre-ApprovalDVD-by-mail company to a global streaming company to one of Auditthe leading entertainment companies in the world, while effectively managing risk and PermissibleNon-Audit Services of Independent Registered Public Accounting Firmoverseeing management performance. By successfully navigating this evolution, our annualized total stockholder return since our initial public offering in 2002 through December 31, 2020 was 40%. | | | | | | | | | | | | | | | | | | | | | Board Tenure | | | | | | | | Gender Diversity | | | | Board balances fresh thinking, new perspectives, and emerging skill needs with institutional knowledge and stability | | | | A quarter of directors are women. | | | | | | | | | | | | | | | | | | |
The Audit Committeepre-approves all audit and permissiblenon-audit services provided by the Company’s independent registered public accounting firm. These services may include audit services, audit-related services, tax and other services.Pre-approval is generally provided for up to one year, and anypre-approval is detailed as to the particular service or category of services. The independent registered public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with thispre-approval, and the fees for the services performed to date. The Audit Committee may alsopre-approve particular services on acase-by-case basis. During 2017, services provided by Ernst & Young werepre-approved by the Audit Committee in accordance with this policy.
Required Vote
The affirmative vote of the majority of the Votes Cast is required
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OUR DIRECTORS Directors standing for ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2018. The vote is an advisory vote, and therefore not binding. Netflix Recommendationelection:
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| | | | RICHARD BARTON INDEPENDENT DIRECTOR DIRECTOR SINCE: 2002 CLASS: I AGE: 53 COMMITTEES: AUDIT Why this director is valuable to Netflix Having founded successful internet-based companies (including Zillow, Expedia and GlassDoor), Mr. Barton provides strategic and technical insight to the Board. In addition, Mr. Barton brings experience with respect to marketing products to consumers through the internet. Also... Mr. Barton was a venture partner at Benchmark, a venture capital firm that has been an early-stage investor in companies like Twitter, Instagram, Uber and Zillow, from 2005 until 2018. He has served on many public company boards. Mr. Barton holds a B.S. in general engineering: industrial economics from Stanford University. Career Snapshot: • Chief Executive and co-founder of Zillow-Group (since 2010) • Co-founder and Chairman of GlassDoor (2007-2018) • Founder and Chief Executive Officer of Expedia (1996-2003) Other Public Company Boards • Qurate (formerly Liberty Interactive) • Zillow Group • Altimeter Growth Corp. • Altimeter Growth Corp. 2 |
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2018.
| | | | | | | | | RODOLPHE BELMER INDEPENDENT DIRECTOR DIRECTOR SINCE: 2018 CLASS: I AGE: 51 COMMITTEES: COMPENSATION Why this director is valuable to Netflix As a media executive located in France, Mr. Belmer brings a unique international perspective to the Board. In addition, his media experience and business acumen provide the Board with valuable insight as it expands its global operations. Also... Mr. Belmer began his career in the marketing department of Procter & Gamble France before joining McKinsey in 1998. He is a graduate of France’s HEC business school. Career Snapshot: • CEO and director of Eutelsat, the leading satellite operator in Europe, the Middle East and Africa (since 2016) • CEO of Canal + Group (2012-2015); various additional roles since joining in 2001 Other Public Company Boards • None |
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| | | | | PROPOSAL THREE | | ADVISORY APPROVAL OF | | BRAD SMITH INDEPENDENT DIRECTOR DIRECTOR SINCE: 2015 CLASS: I AGE: 62 COMMITTEES: NOMINATING AND GOVERNANCE Why this director is valuable to Netflix With a leading role at Microsoft, Mr. Smith brings broad business and international experience on a variety of issues, including government affairs and public policy to the Board. Mr. Smith also brings experience playing a key role in representing Microsoft externally and in leading Microsoft’s work on a number of critical issues, including privacy, security, accessibility, environmental sustainability and digital inclusion, among others, which provides additional expertise to the Board. Also... Mr. Smith has led a push for diversity within Microsoft’s legal division, advocating for increasing employment of diverse employees at the company and associated law firms. Mr. Smith holds a B.A. in international relations and economics from Princeton, a J.D. from Columbia University School of Law and also studied international law and economics at the Graduate Institute of International Studies in Geneva. Career Snapshot: • President and Chief Legal Officer of Microsoft (since 2015); he originally joined Microsoft in 1993 • Associate and then Partner, Covington & Burling (1986-1993) Other Public Company Boards • None |
| | | | | | | | | ANNE SWEENEY INDEPENDENT DIRECTOR DIRECTOR SINCE: 2015 CLASS: I AGE: 63 COMMITTEES: COMPENSATION Why this director is valuable to Netflix Ms. Sweeney has held various senior positions with large entertainment companies, which provided her with broad strategic and operational experience. Her experience in the entertainment industry provides a unique business perspective to the Board as Netflix builds its global internet TV network. Also... Ms. Sweeney’s entertainment experience spans more than three decades, including her oversight of Disney’s cable, broadcast and satellite properties globally for 18 years. During that time, she was charged with launching and running over 118 Disney Channels in 164 countries in 34 languages, and had oversight over various ABC properties including ABC Television Network, ABC Studios and the Disney ABC Cable Networks Group. Prior to Disney, she was CEO of FX Networks, Inc. from 1993 to 1996 and spent more than 12 years at Viacom’s Nickelodeon Network. She holds an Ed. M. From Harvard University and a B.A. from the College of New Rochelle. Career Snapshot: • Co-chair of Disney Media Networks and President of Disney/ABC Television Group (1996-2015) • Chairman and CEO of FX Networks, part of the Fox Entertainment Group/21st Century Fox (1993-1996) Other Public Company Boards • None |
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Directors not standing for election: | | | | | | | | | REED HASTINGS CO-CHIEF EXECUTIVE OFFICER COMPENSATIONAND PRESIDENT OF THE COMPANY, AND CHAIRMAN OF THE BOARD DIRECTOR AND CHAIRMAN SINCE: 1997 CLASS: III (EXPIRES 2023) AGE: 60 COMMITTEES: NONE Why this director is valuable to Netflix Mr. Hastings, as co-founder and Co-Chief Executive Officer, deeply understands the technology and business of Netflix and brings strategic and operational insight to the Board. He is also a software engineer, holds an MSCS in Artificial Intelligence from Stanford University, and has unique management and industry insights. Also... Mr. Hastings is an active educational philanthropist: he served on the California State Board of education from 2000 to 2004, and after receiving his B.A. from Bowdoin College in 1983 served in the Peace Corps as a high school math teacher in Swaziland. Mr. Hastings previously served on the board of Facebook, Inc. from 2011-2019. Career Snapshot: • Founder, Co-Chief Executive Officer, President and Chairman of Netflix (since 1997) • Founder, Pure Software (1991) through IPO (1995) and ultimate sale to Rational Software Other Public Company Boards • None |
As required by section 14A of the Securities Exchange Act, as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), we are providing our stockholders with the opportunity to cast anon-binding advisory vote on the compensation of our named executive officers, as disclosed pursuant to the compensation disclosure rules of the SEC (also referred to as“say-on-pay”).
As described in our Compensation Discussion and Analysis, we have adopted an executive compensation philosophy designed to attract and retain outstanding performers. The Company’s compensation practices are guided by market rates and tailored to account for the specific needs and responsibilities of the particular position as well as the performance and unique qualifications of the individual employee, rather than by seniority or overall Company performance.
Required Vote
| | | | | | | | | JAY C. HOAG LEAD INDEPENDENT DIRECTOR DIRECTOR SINCE: 1999 CLASS: III (EXPIRES 2023) AGE: 62 COMMITTEES: NOMINATING AND GOVERNANCE (CHAIR) Why this director is valuable to Netflix As a venture capital investor, Mr. Hoag brings strategic insights and financial experience to the Board. He has evaluated, invested in and served as a board member on numerous companies, both public and private, and is familiar with a full range of corporate and board functions. His many years of experience in helping companies shape and implement strategy provide the Board with unique perspectives on matters such as risk management, corporate governance, talent selection and management. Also... Mr. Hoag has been a technology investor and venture capitalist for more than 38 years, involved in a large number of technology investments including Altiris (acquired by Symantec), CNET, Expedia, Facebook, Fandango (acquired by Comcast), Intuit, and Sybase. Mr. Hoag is on the Investment Advisory Committee at the University of Michigan, the Board of Trustees of Northwestern University, and the Board of Trust at Vanderbilt University. Previously, Mr. Hoag has served on the board of directors of numerous other public and private companies, including TechTarget, Inc. from 2004-2016. Mr. Hoag holds an M.B.A. from the University of Michigan and a B.A. from Northwestern University. Career Snapshot: • Founding General Partner at TCV (Technology Crossover Ventures), a venture capital firm (since 1995) Other Public Company Boards • Electronic Arts • Peloton Interactive • TCV Acquisition Corp. • TripAdvisor • Zillow Group |
The affirmative vote of the majority of the Votes Cast is required to approve the compensation of our named executive officers disclosed in this Proxy Statement. The vote is an advisory vote, and therefore not binding.
Netflix Recommendation
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE “FOR” APPROVAL OF OUR EXECUTIVE OFFICER COMPENSATION DISCLOSED IN THIS PROXY STATEMENT.
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| | | | | PROPOSAL FOUR | | STOCKHOLDER PROPOSAL FOR SPECIAL SHAREHOLDER MEETING | | MATHIAS DÖPFNER INDEPENDENT DIRECTOR DIRECTOR SINCE: 2018 CLASS: III (EXPIRES 2023) AGE: 58 COMMITTEES: COMPENSATION Why this director is valuable to Netflix As a media executive located in Germany, Mr. Döpfner brings international perspective, media experience and business acumen to the Board. Also... Mr. Döpfner has extensive experience in media and digital transformation and a strong track record of increasing revenues related to digital activities. He previously served on the boards of Vodafone Group plc (2015-2018) and Time Warner Inc. (2006-2018). Additionally, his relationships and honorary offices at entities including the American Academy, the American Jewish Committee and the European Publishers Council among many others provide him with relevant insight and perspective in international media. He studied Musicology, German and Theatrical Arts in Frankfurt and Boston. Career Snapshot: • Chairman and CEO, Axel Springer SE, Europe’s leading digital publishing house (since 2002) • His former roles at Axel Springer SE include editor-in-chief of Die Welt (1998-2000) and as a member of the Management Board (starting in 2000) • Visiting Professor in media at University of Cambridge, St. John’s College (2010) Other Public Company Boards • Warner Music Group |
In accordance with SEC rules, we have set forth below a stockholder proposal, along with the supporting statement of the stockholder proponent, for which we and our Board accept no responsibility. The stockholder proposal is required to be voted upon at our Annual Meeting only if properly presented at our Annual Meeting. As explained below, our Board unanimously recommends that you vote “AGAINST” the stockholder proposal.
Myra K. Young, 9295 Yorkship Court, Elk Grove, CA 95758, the beneficial owner of no less than 700 shares of the Company’s common stock on the date the proposal was submitted, has notified the Company of her intent to present the following proposal at the Annual Meeting.
RESOLVED: The shareholders of Netflix Inc. (‘Netflix’ or ‘Company’) hereby request that the Board of Directors take the steps necessary to amend our bylaws and each appropriate governing document to give holders with an aggregate of 15% net long of our outstanding common stock the power to call a special shareowner meeting. This proposal does not impact our board’s current power to call a special meeting.
Supporting Statement
| | | | | | | | | TIMOTHY HALEY INDEPENDENT DIRECTOR DIRECTOR SINCE: 1998 CLASS: II (EXPIRES 2022) AGE: 66 COMMITTEES: COMPENSATION (CHAIR) Why this director is valuable to Netflix As a venture capital investor, Mr. Haley brings strategic and financial experience to the Board. He has evaluated, invested in and served as a board member on numerous companies. His executive recruiting background also provides the Board with insight into talent selection and management. Also... Mr. Haley was President of Haley Associates, an executive recruiting firm serving the high technology industry from 1986 - 1998, and serves on the boards of several private companies. Mr. Haley holds a B.A. from Santa Clara University. Career Snapshot: • Managing Director, Redpoint Ventures, a venture capital firm (since 1999) • Managing Director, Institutional Venture Partners, a venture capital firm (since 1998) Other Public Company Boards • 2U, Inc. • ThredUp • Zuora |
Delaware law allows 10% of company shares to call a special meeting. A shareholder right to call a special meeting is a way to bring an important matter to the attention of both management and shareholders outside the annual meeting cycle. This is important because there could be15-months between annual meetings.
A shareholder right to act by written consent and to call a special meeting are two complimentary[sic] ways to bring an important matter to the attention of both management and shareholders outside the annual meeting cycle. Both are associated with increased governance quality and shareholder value. Our Company makes no provisions for either right.
Currently, 64% of S&P 500 companies have adopted company bylaws, articles of incorporation, or charter provisions to allow shareholders to call a special meeting. Even more than half of all S&P 1500 companies allow shareholders this right.
This proposal topic also won majority votes last year at Salesforce.com, NETGEAR, and United Rentals. It may be possible to adopt this proposal by simply incorporating this text into our governing documents:
“Special meetings of the stockholders, for any purpose or purposes, unless otherwise prescribed by statute, may be called by the Chairman of the Board or the President, and shall be called by the Chairman of the Board or President or Secretary upon the order in writing of a majority of or by resolution of the Board of Directors, or at the request in writing of stockholders owning 15% net long of the entire capital stock of the Corporation issued and outstanding and entitled to vote.”
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This proposal should be seen in the context that in 2017 a majority of shares voted to declassify the board, move to a majority vote standard for elect directors in uncontested elections and eliminate supermajority standards. To date, Netflix has failed to adoptanyof those initiatives.
We urge the Board to join the mainstream of major U.S. companies and establish a right for shareholders owning 15% of our outstanding common sock[sic] to call a special meeting.
Please vote for: Special Shareowner Meetings - Proposal 4
Netflix Opposing Statement
The Board has considered the stockholder proposal and, for the reasons described below, believes that the proposal is not in the best interests of Netflix and our stockholders.
The Board believes that maintaining the Company’s current requirements for calling special meetings is in the best interest of its stockholders. Each of the Company’s directors has a fiduciary duty to represent all stockholders when determining whether a matter is so pressing that it must be addressed at a special meeting. In contrast, stockholders do not have any fiduciary obligations to the Company or other stockholders. The foregoing proposal would permit a small group of stockholders who have a special interest to use the right to call a special meeting to serve their narrow self-interests that are not shared by the Company’s stockholders generally. With the Company’s current special meeting requirements, stockholders nonetheless have significant protections under state law, other regulations and the Company’s Amended and Restated Bylaws as stockholder approval is already required for a variety of fundamental corporate decisions, such as a merger or sale of substantially all of the Company’s assets or for issuing shares above a prescribed threshold. Lastly, it should be noted that for a company with as many stockholders as the Company, a special meeting of stockholders is a very expensive and time-consuming affair because of the legal costs in preparing required disclosure documents, printing and mailing costs, and the time commitment required of the Board and members of senior management to prepare for and conduct the meeting.
For the foregoing reasons, the Board unanimously believes that this proposal is not in the best interests of Netflix or our stockholders, and recommends that you vote “AGAINST” Proposal Four.
Required Vote
The affirmative vote of the majority of the Votes Cast is required to approve the stockholder proposal. The proposal is precatory and, accordingly, is not binding on the Board or the Company.
Netflix Recommendation
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “AGAINST” THE STOCKHOLDER PROPOSAL FOR A SPECIAL SHAREHOLDER MEETING.
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| | | | | PROPOSAL FIVE | | STOCKHOLDER PROPOSAL FOR PROXY ACCESS | | LESLIE KILGORE DIRECTOR DIRECTOR SINCE: 2012 (INDEPENDENT SINCE 2015) CLASS: II (EXPIRES 2022) AGE: 55 COMMITTEES: AUDIT Why this director is valuable to Netflix Ms. Kilgore’s experience as a marketing executive with internet retailers and consumer product companies provides a unique business perspective and her numerous managerial positions provide strategic and operational experience to the Board. Also... As our former Chief Marketing Officer, Ms. Kilgore deeply understands the Netflix business and is able to bring years of marketing experience to the Board. She holds an M.B.A. from the Stanford University Graduate School of Business and a B.S. from The Wharton School of Business at the University of Pennsylvania. She previously served on the board of LinkedIn Corp., and she currently serves on the boards of several other companies. Career Snapshot: • Chief Marketing Officer of Netflix (2000-2012) • Director of Marketing at Amazon (1999-2000) • Brand manager at The Procter & Gamble Company (1992-1999) Other Public Company Boards • Medallia • Pinterest |
In accordance with SEC rules, we have set forth below a stockholder proposal, along with the supporting statement of the stockholder proponent, for which we and our Board accept no responsibility. The stockholder proposal is required to be voted upon at our Annual Meeting only if properly presented at our Annual Meeting. As explained below, our Board unanimously recommends that you vote “AGAINST” the stockholder proposal.
The New York City Employees’ Retirement System, the New York City Fire Pension Fund, the New York City Teachers’ Retirement System, and the New York City Police Pension Fund and the New York City Board of Education Retirement System (the “Systems”), Municipal Building, One Centre Street, 8th Floor North, New York, N.Y. 10007-2341, the beneficial owners of an aggregate of 684,401 shares of the Company’s common stock on the date the proposal was submitted, has notified the Company of its intent to present the following proposal at the Annual Meeting.
The proposal isco-sponsored by the Connecticut Retirement Plans Trust Funds, the beneficial owner of shares of the Company’s common stock with a market value greater than $2,000.00 on the date the proposal was submitted.
RESOLVED: Shareholders of the Netflix, Inc. (the “Company”) ask the board of directors (the “Board”) to take the steps necessary to adopt a “proxy access” bylaw. Such a bylaw shall require the Company to include in proxy materials prepared for a shareholder meeting at which directors are to be elected the name, Disclosure and Statement (as defined herein) of any person nominated for election to the board by a shareholder or group (the “Nominator”) that meets the criteria established below. The Company shall allow shareholders to vote on such nominee on the Company’s proxy card.
The number of shareholder-nominated candidates appearing in proxy materials shall not exceed the larger of two or one quarter of the directors then serving. This bylaw, which shall supplement existing rights under Company bylaws, should provide that a Nominator must:
| a. | have beneficially owned 3% or more | | | | | | | STRIVE MASIYIWA INDEPENDENT DIRECTOR DIRECTOR SINCE: 2020 CLASS: II (EXPIRES 2022) AGE: 60 COMMITTEES: NONE Why this director is valuable to Netflix As the Chairman and founder of Econet Global, a telecommunications and technology group with operations and investments in 29 countries in Africa and Europe, Mr. Masiyiwa provides a unique international perspective to the Board. In addition, his experience in building businesses across Africa and the world provides the Company with valuable insight as it expands globally. Also... Mr. Masiyiwa serves on several international boards including Unilever Plc, National Geographic Society, Asia Society, and the Global Advisory boards of Bank of America, the Council on Foreign Relations (in the US), Stanford University, and the Prince of Wales Trust for Africa, and is a longstanding board member of the Company’s outstanding common stock continuouslyUnited States Holocaust Museum’s Committee on Conscience. A former board member of the Rockefeller Foundation for 15 years, he is Chairman Emeritus of the Alliance for a Green Revolution in Africa (AGRA) and African Union Special Envoy to the continent’s COVID response. He received a BSc in Electrical and Electronic Engineering from the University of Wales. Mr. Masiyiwa has received honorary doctorates from Morehouse College, Yale University, Nelson Mandela University and Cardiff University. Career Snapshot: • Founder and Executive Chairman of Econet Global (1993-Present) Other Public Company Boards • Unilever Plc |
| | | | | | | | | ANN MATHER INDEPENDENT DIRECTOR DIRECTOR SINCE: 2010 CLASS: II (EXPIRES 2022) AGE: 61 COMMITTEES: AUDIT (CHAIR, FINANCIAL EXPERT) Why this director is valuable to Netflix Ms. Mather’s experience as an executive with several major media companies provides a unique business perspective. As a former CFO and senior finance executive at least threemajor corporations, she brings more than 20 years before submittingof financial and accounting expertise to the nomination;Board. Additionally, Ms. Mather’s numerous managerial positions and service on public company boards provides strategic, operational and corporate governance experience. Also... Ms. Mather previously served on the board of Shutterfly, Inc., a photography and image-sharing company (2013-2019) and Glu Mobile Inc., a publisher of mobile games (2005-2021). She has also been an independent trustee to the board of trustees of Dodge & Cox Funds, a mutual fund, since May 2011. She received her M.A. from Cambridge University, and is an Honorary Fellow of Sidney Sussex College Cambridge. Career Snapshot: • Executive Vice President and CFO of Pixar (1999 - 2004) • Executive Vice President and CFO of Village Roadshow Pictures (1999) • Various executive positions at The Walt Disney Company (1993-1999) Other Public Company Boards • Alphabet (formerly Google) • Airbnb • Bumble • Arista Networks |
| b. | give | | | | | | | TED SARANDOS CO-CHIEF EXECUTIVE OFFICER AND CHIEF CONTENT OFFICER OF THE COMPANY DIRECTOR SINCE: 2020 CLASS: III (EXPIRES 2023) AGE: 56 COMMITTEES: NONE Why this director is valuable to Netflix Mr. Sarandos, as Co-Chief Executive Officer and Chief Content Officer, is integral to developing corporate strategy and oversees the Company, withinteams responsible for the time period identifiedacquisition, creation and promotion of all Netflix content including original series from around the world. His in-depth knowledge about Netflix and experience in its bylaws, written noticethe entertainment industry provide a unique business perspective to the Board. Also... Mr. Sarandos has been responsible for all content operations since 2000, and led the Company’s transition into original content production that began in 2013 with the launch of series such as House of Cards, Arrested Development and Orange is the New Black. With more than 20 years’ experience in home entertainment, he is recognized in the industry as an innovator in film acquisition and distribution and was named one of Time Magazine’s 100 Most Influential People of 2013. He is a Henry Crown Fellow at the Aspen Institute and serves on the board of Exploring The Arts, a nonprofit focused on arts in schools. Mr. Sarandos also serves on the Film Advisory Board for the Tribeca and Los Angeles Film Festivals, is an American Cinematheque board member, an Executive Committee Member of the information required byAcademy of Television Arts & Sciences and is a trustee of the bylawsAmerican Film Institute. Career Snapshot: • Co-Chief Executive Officer (since July 2020) and any SecuritiesChief Content Officer of Netflix (since 2000) • Executive at video distributor ETD and Exchange Commission rules about (i)Video City/West Coast video, a video rental retail chain • Producer/Executive Producer for award-winning and critically acclaimed documentaries and independent films including the nominee, including consent to being named in the proxy materialsEmmy-nominated Outrage and to serving as director if elected; and (ii) the Nominator, including proof it owns the required shares (the “Disclosure”); andTony Bennett: The Music Never Ends. Other Public Company Boards • Spotify |
| | | | | 16 | | c. | certify that (i) it will assume liability stemming from any legal or regulatory violation arising out of the Nominator’s communications with the Company shareholders, including the Disclosure and Statement; (ii) it will comply with all applicable laws and regulations if it uses soliciting material other than the Company’s proxy materials; and (iii) to the best of its knowledge, the required shares were acquired in the ordinary course of business and not to change or influence control at the Company. | |
The Nominator may submit with the Disclosure a statement not exceeding 500 words in support of each nominee (the “Statement”). The Board shall adopt procedures for promptly resolving disputes
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over whether noticeBOARD SKILLS AND EXPERIENCE
Our Board believes that having a diverse mix of directors with complementary skills, experience, and expertise is important to meeting its oversight responsibility. That diversity, combined with transparent and broad access to information and exposure to management beyond the executive officers, allows the Board to exercise effective management oversight and to ensure the care of our stockholders’ interests. Below are a nomination was timely, whether the Disclosure and Statement satisfy the bylaw and applicable federal regulations, and the prioritynumber of skills that our Board members bring to be givenNetflix. If an individual is not listed under a particular attribute, it does not signify a director’s lack of ability to multiple nominations exceeding theone-quarter limit. Supporting Statementcontribute in such area.
We believe proxy access will make directors more accountable and enhance shareholder value. A 2014 study by the CFA Institute concluded that proxy access could raise overall US market capitalization by up to $140.3 billion if adopted market-wide, “with little cost or disruption.” (http://www.cfapubs.org/doi/pdf/10.2469/ccb.v2014.n9.1)
The proposed terms are similar to those in vacated SEC Rule14a-11 (https://www.sec.gov/rules/final/2010/33-9136.pdf). The SEC, following extensive analysis and input from market participants, determined that those terms struck the proper balance of providing shareholders with viable proxy access while containing appropriate safeguards.
The proposed terms enjoy strong investor support and company acceptance. A similar shareholder proposal received at least 66.8% of votes cast at the Company in 2017 and more than 440 companies have enacted bylaws with similar terms.
We urge shareholders to vote FOR this proposal.
Netflix Opposing Statement
| | | | | | | | | | | Leadership | | | | | | Experience and expertise in identifying and developing opportunities for long-term value creation, including experience in driving innovation, opening markets, improving operations, identifying risks, and executing successfully. | | | | Richard Barton Rodolphe Belmer Mathias Döpfner Timothy Haley Reed Hastings Jay Hoag | | Leslie Kilgore Strive Masiyiwa Ann Mather Brad Smith Ted Sarandos Anne Sweeney | | | | | | | Strategy | | | | | | Experience and expertise in identifying and developing opportunities for long-term value creation, including experience in driving innovation, opening markets, improving operations, identifying risks, and executing successfully. | | | | Richard Barton Rodolphe Belmer Mathias Döpfner Timothy Haley Reed Hastings Jay Hoag | | Leslie Kilgore Strive Masiyiwa Ann Mather Ted Sarandos Brad Smith Anne Sweeney | | | | | | | Finance & Accounting | | | | | | Management or oversight of the finance function of an enterprise, resulting in proficiency in complex financial management, capital allocation, and financial reporting processes. | | | | Richard Barton Rodolphe Belmer Mathias Döpfner Timothy Haley Reed Hastings | | Jay Hoag Leslie Kilgore Ann Mather Anne Sweeney | | | | | | | Entertainment & Media | | | | | | Experience and expertise with the entertainment and media industry, resulting in a deep understanding of consumer expectations and innovations in content and delivery. | | | | Richard Barton Rodolphe Belmer Mathias Döpfner Reed Hastings | | Leslie Kilgore Ann Mather Ted Sarandos Anne Sweeney | | | | | | | Demographic Diversity | | | | | | Representation of gender, ethnic, race, geographic, cultural, or other perspectives that expand the Board’s understanding of the needs and viewpoints of our members, partners, employees, governments, and other stakeholders worldwide. | | | | Rodolphe Belmer Mathias Döpfner Leslie Kilgore | | Strive Masiyiwa Ann Mather Anne Sweeney |
| | | | | | | | | | | Global Business & Government Relations | | | | | | Expertise in global business cultures, consumer preferences, and /or government relations gained through local experience in international markets or senior positions overseeing public policy. | | | | Rodolphe Belmer Mathias Döpfner Strive Masiyiwa | | Ann Mather Brad Smith | | | | | | | Technology | | | | | | Experience and expertise in technology-related business or technology functions, resulting in knowledge of how to anticipate technological trends, understand and manage technology related risks, generate disruptive innovation, and extend or create new business models. | | | | Richard Barton Reed Hastings Jay Hoag | | Strive Masiyiwa Brad Smith | | | | | | | Marketing | | | | | | Experience and expertise developing strategies to grow market share, package and position product offerings, build brand awareness and equity, and enhance enterprise reputation. | | | | Richard Barton Rodolphe Belmer | | Leslie Kilgore Ted Sarandos | | | | | | | Human Capital Management | | | | | | Experience and expertise related to human resource issues such as attracting and retaining talent, succession planning, engagement of employees, and the development and evolution of culture, including the alignment of culture and long-term strategy. | | | | Timothy Haley Reed Hastings | | Ted Sarandos |
DIRECTOR INDEPENDENCE The Board has considereddetermined that each of Messrs. Barton, Belmer, Döpfner, Haley, Hoag, Masiyiwa and Smith, and Mses. Kilgore, Mather, and Sweeney are independent under the stockholder proposalapplicable rules of the SEC and for the reasons described below, believes thatlisting standards of the proposal is not inNASDAQ Stock Market; therefore, every member of the best interests of NetflixAudit Committee, Compensation Committee and our stockholders. The Nominating and Governance Committee is responsible for evaluating, proposingan independent director in accordance with those standards. In addition, the Board determined that Ambassador Rice was independent during the time she served on the Board.
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How We are Selected, Elected and approving nomineesEvaluated CONSIDERATION OF DIRECTOR NOMINEES Director Qualifications In discharging its responsibilities to nominate candidates for election to the Company’s Board, of Directors. In undertaking this responsibility, the committee has a fiduciary duty to act in the best interests of all stockholders. Stockholders who would be provided with access to the Company’s proxy via a proxy access bylaw do not have a similar fiduciary duty. These stockholders could nominate directors who advance their own specific agenda without regard to the best interest of the Company and its stockholders or to the overall composition of the Board, including independence, expertise and diversity considerations. In determining director nominees, the Nominating and Governance Committee takes into considerationhas not specified any minimum qualifications for serving on the Board. However, the Nominating and Governance Committee endeavors to evaluate, propose and approve candidates with business experience, diversity, as well as personal skills and knowledge with respect to technology, finance, marketing, financial reporting and any other areas that may be expected to contribute to an effective Board. With respect to diversity, the committee may consider such factors as diversity in viewpoint, professional experience, education, international experience, skills and other individual qualifications and attributes that contribute to board heterogeneity, including characteristics such as gender, race, and national origin. Identifying and Evaluating Nominees for Directors The Board believes thatNominating and Governance Committee utilizes a variety of methods for identifying and evaluating nominees for director. Candidates may come to the attention of the Nominating and Governance Committee is inthrough management, current Board members, stockholders or other persons. These candidates are evaluated at meetings of the best positionNominating and Governance Committee as necessary and discussed by the members of the Nominating and Governance Committee from time to evaluatetime. Candidates may be considered at any point during the year. The Nominating and propose director nominees and that providing access to the Company’s proxy forGovernance Committee considers properly submitted stockholder nominations not nominatedfor candidates for the Board. Following verification of the stockholder status of persons proposing candidates, recommendations are aggregated and considered by the Nominating and Governance Committee. If any materials are provided by a stockholder in connection with the nomination of a director candidate, such materials are forwarded to the Nominating and Governance Committee. The Nominating and Governance Committee will underminealso reviews materials provided by professional search firms or other parties in connection with a nominee who is not proposed by a stockholder. Stockholder Nominees The Nominating and Governance Committee considers properly submitted stockholder nominations for candidates for membership on the value to stockholders of this selectionBoard as described above under “Identifying and nomination process. Stockholders already have the opportunity to recommend director candidatesEvaluating Nominees for Directors.” Any stockholder nominations proposed for consideration by the Nominating and Governance Committee. Furthermore, ourCommittee should include the nominee’s name and qualifications for Board membership. In addition, they should be submitted within the time frame as specified under “Stockholder Proposals” above and mailed to: Netflix, Inc., 100 Winchester Circle, Los Gatos, California 95032, Attention: Secretary. Our bylaws also provide the opportunitya proxy access right for stockholders, pursuant to which a stockholder, or a group of up to 20 stockholders, owning at least three percent of outstanding shares of our common stock continuously for at least three years, may nominate and include in our annual meeting proxy materials director nominees constituting up to the greater of (a) two directors for consideration at annual meetingsor (b) twenty percent of the Board, subject to certain limitations and provided that the stockholders and to solicit proxiesnominees satisfy the requirements specified in favor of such nominees. In addition, the Board believes that the proxy access proposal espoused by the proponents could be detrimental to the Company for a number of other reasons, including the increased distraction causedour bylaws.
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to management and the Board from proxy contests, the short-term or special interest focus of directors elected through proxy access, and the increase in Board turnover, which could create a Board without the experience to lead the Company to achieve its long-term goals.
The proponents refer to a study by the CFA Institute to support the argument that proxy access would be beneficial and result in shareholder value. However, the CFA Institute’s study expressly excluded from its analysis two studies which concluded that increased proxy access is associated with negative economic impacts, on the basis that it deemed the methodology of those studies as faulty.
Lastly, proponents note that their proposal is similar to the vacated 2010 SEC proxy access rules. However, those rules were vacated in 2011 by the U.S. Court of Appeals for the District of Columbia Circuit, who found that the SEC was “arbitrary and capricious” in promulgating the Proxy Access Rule, stating that the SEC failed to adequately address the economic consequences of the Rule. Thus, the SEC’s adoption of the 2010 Proxy Access Rules provides poor support for this proposal.
For the foregoing reasons, the Board unanimously believes that this proposal is not in the best interests of Netflix or our stockholders, and recommends that you vote “AGAINST” Proposal Five.
Required Vote
The affirmative vote of the majority of the Votes Cast is required to approve the stockholder proposal. The proposal is precatory and, accordingly, is not binding on the Board or the Company.
Netflix Recommendation
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “AGAINST” THE STOCKHOLDER PROPOSAL TO ADOPT A PROXY ACCESS BYLAW.
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| | | | | PROPOSAL SIX | | STOCKHOLDER PROPOSAL TO ADOPT A CLAWBACK POLICY2021 PROXY STATEMENT | | 19 |
In accordance
OUR BOARD EVALUATION PROCESS Each year, our Board conducts a self-evaluation process to help assure and enhance its performance. This process is overseen by the Nominating and Governance Committee, and involves interviews of each director by our Chief Legal Officer. Feedback is sought primarily in the following areas: (a) the Board’s effectiveness, structure, culture and composition, (b) the quality of and access to information shared with SEC rules,the Board about our business and (c) performance of the directors and quality of Board discussions. How We Govern and are Governed OUR APPROACH TO CORPORATE GOVERNANCE Corporate Governance Philosophy Netflix operates in a dynamic industry and has been in a state of constant innovation since inception. We have redefined how people watch video—first through DVD-by-mail, then streaming video, and now as one of the world’s leading entertainment services with approximately 208 million memberships in 190 countries. Our success has not gone unnoticed, and we are seeing increasing competition, even as this dynamic market continues to evolve. Our corporate governance structure is built against this backdrop. Governance, in this context, means finding the right balance of rights and responsibilities among stockholders, the Board, and management, and ensuring that there are appropriate checks and balances in place. With the rapid evolution of technology and the changing media landscape, we are continually adjusting our service to meet the dynamic needs and desires of our consumers. Our governance structure is built to help us to do that. Our focus is on creating long-term value for our stockholders, and we have set forth below abeen successful at that – since our initial public offering in 2002, annualized total stockholder proposal, alongreturn through December 31, 2020 was 40%. Our governance structure is unconventional. We have several provisions that give our Board and our management team the freedom to be forward-thinking, such as making investments to build our own production studios and developing our own animation capabilities, with the supporting statementconfidence that they will be able to see those investments to fruition. At the same time, we have paid attention to our stockholders and increased our accountability to them by adopting provisions such as proxy access. We are proud of our governance structure, both because of how it has supported our success to date and for being innovative, such as the stockholder proponent, for which weway that our Board has unfettered access to management and is able to seek information directly from employees all around the enterprise. We strive to stay in tune with our ownership base. Our Board and our management team engage directly with our stockholders, and our Board accept no responsibility.and its committees consider stockholders’ feedback in assessing our governance structure, including our compensation program. These discussions provide a good opportunity to share views and answer questions; the input from our stockholders will continue to inform our ongoing evaluation of our structure. We believe our approach to governance will continue to provide the greatest benefit to Netflix and our stockholders. We realize that elements of our structure may not fit within the standard corporate governance practices and that some stockholders take a different view. But we believe that Netflix’s long-term value is currently best optimized with our approach to governance. | | | | | 20 | | | | |
Stockholder Engagement and 2020 Stockholder Proposals At our 2020 annual meeting, stockholders presented three proposals for vote. One proposal requested additional disclosure around political spending, and the proposal did not receive majority support from stockholders. The stockholdersecond proposal is requiredrequested that we lower the two-thirds supermajority requirement for amending our charter and bylaws to be voted upon ata simple majority. This proposal did receive majority support from stockholders. The third proposal sought a public report regarding our Annual Meeting only if properly presented at our Annual Meeting. As explained below,equal employment opportunity policy, and received less than 1% support from stockholders. We consider the voting results for stockholders proposals in our Board unanimously recommends that you vote “AGAINST”discussions and as we contemplate our governance structure. We also engaged with stockholders to solicit feedback on a broad range of topics, including these stockholder proposals. We held 10 virtual meetings in the stockholder proposal. The Cityfall of Philadelphia Public Employees Retirement System, Sixteenth Floor, Two Penn Center Plaza, Philadelphia, PA 19102-1712, the beneficial owner2020 with stockholders representing approximately 25% of shares of the Company’sour common stock with a market value greater than $2,000.00 on the date the proposal was submitted, has notified the Company of its intent to present the following proposal at the Annual Meeting.
RESOLVED, that shareholders of Netflix Inc. urge the Compensation Committeeoutstanding. Members of the Board, accompanied by Company representatives as appropriate, participated in each of Directors (the “Committee”)these conversations. We also held numerous engagement meetings earlier in 2020, prior to adoptour 2020 annual meeting.
In addition to governance and compensation matters, our discussions in 2020 centered on our approach to environmental, social and governance (ESG) matters; diversity, equity and inclusion; our response to the COVID-19 pandemic; and our dual CEO management structure. Investors expressed a clawback policydesire to providesee improved disclosure on environmental and social matters, which the recent hire of our Sustainability Officer is intended to help address. We have also recently increased our disclosure about these topics partly in response to investor feedback by publishing an Inclusion Report in January 2021 along with our EEO-1 and ESG reports. We also discussed our approach to governance, including our goal of ensuring that the Committee will review, and determine whetherwe are best able to seek recoupment of, incentive compensation paid, granted or awarded to a senior executive if, in the Committee’s judgment, (i) there has been misconduct resulting in a material violation of law or Netfilx’s[sic] policy that causes significant financial or reputational harm to Netflix, and (ii) the senior executive committed the misconduct or failed in his or her responsibility to manage or monitor conduct or risks; and disclose the circumstances of any recoupment if (i) required by law or regulation or (ii) the Committee determines that disclosureexecute our long-term vision, which we believe is in the best interests of all stockholders. Investors understood our rationale for our governance structure, even if they disagreed with it. While investors inquired about our dual CEO model and how it works for Netflix, none expressed that it was inappropriate for us. We explained that the dual CEO model formalized the prior working relationship between Reed and its shareholders. “Recoupment” is (a) recoveryTed, and was an effective leadership model to further support our continued growth and international expansion. Stockholders gave us high marks for our response to the COVID-19 pandemic, such as our focus on employee well-being and our efforts to support the creative industry through our establishment of compensation already paid and (b) forfeiture, recapture, reduction or cancellation of amounts awarded or granted over which Netflix retains control. These amendments should operate prospectively and be implemented so as not to violate any contract, compensation plan, law or regulation.
Supporting Statement
hardship funds. The adoptionfeedback on our compensation program was limited, with many investors understanding and supportive of a clawback policy would recoup incentive pay when there has been misconduct by a senior executive or whoour approach to compensation. While we did not commit misconduct but who failed in his or her management or monitoring responsibility. We also believehear thematic concerns about our compensation program during our meetings, one stockholder questioned some components of our compensation program, including the Company should publicly disclose whether it recouped pay so investors know whether the policy is being enforced. We are sensitiveability of our executives to privacy concernsallocate their compensation between cash and urge that the revised policy provide for disclosure that does not violate privacy expectations (subject to laws requiring fuller disclosure). Finally, our proposal does not mandate a clawback; rather, it gives the Committee discretion to decide whether recoupment is appropriate in particular circumstances.stock options.
We urge shareholders to vote FOR this proposal. Netflix Opposing Statement
The Board has considered the stockholder proposal and, for the reasons described below, believes that the proposal is not in the best interests of Netflix and our stockholders.
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We hold all our employees, particularly our executive officers, to high standards of legal and ethical conduct, which standards are an integral part of Netflix culture. These standards are embodied, in part, in our Code of Ethics, by which each of our executive officers as well as our directors, officers and other employees to act and perform their duties ethically and honestly and with the utmost integrity. Any violation of our Code of Ethics or other policies may result in disciplinary action, including termination, and if warranted, legal proceedings for damages. The Board also opposes this proposal because the proposal is vague and implementing the proposal may create standards for incentive compensation recoupment that are inconsistent with existing and pending legal requirements, which may harm our ability to attract and retain high-quality executive talent.
Section 304 of the Sarbanes-Oxley Act of 2002 already requires recoupment of incentive awards from our Chief Executive Officer and Chief Financial Officer if we are required to restate our financial statements due to material noncompliance with any financial reporting requirements as a result of misconduct. The proposal seeks to apply a clawback policy to all “senior executives,” a term that is not defined in the proposal. Section 954 of the Dodd-Frank Act mandates the SEC to create a rule requiring listed companies to adopt policies for recouping certain compensation or become ineligible for listing on the national stock exchanges. Rather than adopt a clawback policy at this time that may ultimately vary from the SEC’s interpretation of the requirements set forth in Section 954, the Board has determined that it is appropriate and in the best interests of Netflix and our stockholders to wait for the SEC’s rules to be finalized.
In light of our existing policies and governance culture, the Board believes that we achieve the underlying purpose of this proposal for promoting honest and ethical behavior without subjecting the Company to uncertainties introduced by this proposal that could negatively impact our ability to compete for talent.
For the foregoing reasons, the Board unanimously believes that this proposal is not in the best interests of Netflix or our stockholders, and recommends that you vote “AGAINST” Proposal Six.
Required Vote
The affirmative vote of the majority of the Votes Cast is required to approve the stockholder proposal. The proposal is precatory and, accordingly, is not binding on the Board or the Company.
Netflix Recommendation
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “AGAINST” THE STOCKHOLDER PROPOSAL TO ADOPT A CLAWBACK POLICY.
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| | | PROPOSAL SEVEN | | STOCKHOLDER PROPOSAL FOR A SHAREHOLDER RIGHT TO ACT BY WRITTEN CONSENT |
In accordance with SEC rules, we have set forth below a stockholder proposal, along with the supporting statement of the stockholder proponent, for which we and our Board accept no responsibility. The stockholder proposal is required to be voted upon at our Annual Meeting only if properly presented at our Annual Meeting. As explained below, our Board unanimously recommends that you vote “AGAINST” the stockholder proposal.
John Chevedden, 2215 Nelson Avenue, No. 205, Redondo Beach, CA 90278, the beneficial owner of no less than 20 shares of the Company’s common stock on the date the proposal was submitted, has notified the Company of his intent to present the following proposal at the Annual Meeting.
RESOLVED, shareholders requestfurther note that our board of directors undertake such steps as may be necessary to permit written consent by shareholders entitled to cast the minimum number of votes that would be necessary to authorize the action at a meeting at which all shareholders entitled to vote thereon were present and voting. This written consent is to be consistent with applicable law and consistent with giving shareholders the fullest power to act by written consent consistent with applicable law. This includes shareholder ability to initiate any topic for written consent consistent with applicable law.
Supporting Statement
This proposal topic won majority shareholder support at 13 major companies in a single year. This included 67%-support at both Allstate and Sprint. Hundreds of major companies enable shareholder action by written consent. It might have received a still higher vote than 67% if small shareholders had the advantage of the same access to independent corporate governance recommendations as large shareholders. It might have received a still higher vote if the voting turnout of small shareholders equaled that of large shareholders.
Taking action by written consent in lieu of a meeting is a means shareholders can use to raise important matters outside the normal annual meeting cycle. A shareholder right to act by written consent is a way to bring an important matter to the attention of both management and shareholders outside the annual meeting cycle.
Netflix shareholders have no right to act by written consent. Shareholders of companies incorporated in Delaware, like NFLX, automatically have the right to act by written consent. However the NFLX took an extra effort to strip shareholders of this important right. NFLX shareholders also do not have any right to call a special meeting. It is all the more important to vote in favor of this proposal, which give shareholders an important right, when NFLX governing documents give its shareholders so little in rights compared to the vast majority of companies.
For instance the 3 directors who stood for election in 2017 received up to 48% in negative votes each. Shareholders should be able to vote every year on a director who gets a 48% negative vote instead of having such a director entrenched for3-years.
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Netflix shareholders approved annual election of each director at 4 Netflix annual meeting starting in 2012. The impressiveyes-votes ranged from 75% to88%.Yet arrogant Netflix directors ignored this overwhelming voice of its shareholders. It is a question of how long will Netflix directors ignore shareholders in the face of increased high-stake competition with compeletiors [sic] such as abulked-up Disney.
Please vote to improve director accountability to shareholders:Shareholder Right to Act by Written Consent- Proposal 7
Netflix Opposing Statement
The Board has considered the stockholder proposal and, for the reasons described below, believes that the proposal is not in the best interests of Netflix and our stockholders.
The Board opposes this proposal because it could have adverse consequences to Netflix and its stockholders, including potential abuse, disenfranchisement of minority stockholders, lack of transparency and accountability to our stockholders, and the undermining of an orderly governance process for taking significant corporate actions.
The Board believes that permitting action at a meeting (whether the annual meeting or a special meeting) is a fairer process than the action by written consent process as it provides all stockholders the opportunity to participate and vote. Meetings are held at a time, date and venue announced publicly in advance, and all stockholders receive prior notice of the meeting and are invited to attend the meeting and make their views known. Approval of proposals at a stockholder meeting ensures that proposals are widely disseminated to our stockholders through the proxy statement and any additional soliciting materials, which must contain information about the proposed action as specified by the Securities and Exchange Commission. If a meeting is convened, the Board is provided with an opportunity to present an analysis of such proposals and can present its recommendations to our stockholders. The proxy statement and any additional soliciting materials must be distributed to all stockholders of record in advance of the meeting, providing stockholders with sufficient time and opportunity to consider the proposals and make a decision regarding how to vote or direct their proxies. Such procedural protections provide all stockholders the opportunity to fully consider, discuss and deliberate the merits of a proposed action prior to voting.
By contrast, action by less than unanimous written consent at any time does not guarantee any of these protections or advantages. In general, stockholders are not entitled to receive notice of actions to be taken by written consent and, thus, may not be given sufficient time or opportunity to evaluate the proposed action. Further, the Board does not have the opportunity to analyze and provide a recommendation with respect to a proposed action by written consent, potentially preventing stockholders from receiving accurate and complete information on important pending actions, and proponents of the proposed action need not provide any information regarding themselves or their interests in the proposed action to other stockholders or Netflix. This stockholder proposal could allow stockholders owning slightly over 50 percent of the Company’s outstanding shares to act on a significant matter without prior notice of the meeting to all stockholders and without affording all stockholders the opportunity to present their views. This would disenfranchise stockholders who are not given the chance to participate. This is of particular concern in cases involving significant corporate actions and in the context of contests for corporate control of Netflix.
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In addition, the action by written consent process could result in duplicative or contradictory written consents being circulated at the same time by multiple stockholder groups, creating substantial confusion and disruption among stockholders. Moreover, because proponents of an action by written consent need not satisfy any holding requirementscurrent practice with respect to our common stock, market participants engagingsupermajority provision is a mainstream practice. According to data from FactSet, more than forty percent of S&P 500 companies have supermajority provisions in short-term speculation could potentially determine the outcome of any particular issue. Subsets of stockholders with special interests would be able to use a written consent procedure at any time and as frequently as they choose to act on a variety of potentially significant matters without notice to all stockholders and without a meeting or another forum at which all stockholders would have a fair opportunity to discuss the merits of a proposed action and question management and the proponent on the basis for their respective positions. Such stockholders may not act in the interests of longer-term holders of our common stock, which may lead to fundamental corporate changes that cater to special or short-term interests.
For the foregoing reasons, the Board unanimously believes that this proposal is not in the best interests of Netflix or our stockholders, and recommends that you vote “AGAINST” Proposal Seven.
Required Vote
The affirmative vote of the majority of the Votes Cast is required to approve the stockholder proposal. The proposal is precatory and, accordingly, is not binding on the Board or the Company.
Netflix Recommendation
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “AGAINST” THE STOCKHOLDER PROPOSAL FOR A SHAREHOLDER RIGHT TO ACT BY WRITTEN CONSENT.
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| | | PROPOSAL EIGHT | | STOCKHOLDER PROPOSAL FOR SIMPLE MAJORITY VOTE |
In accordance with SEC rules, we have set forth below a stockholder proposal, along with the supporting statement of the stockholder proponent, for which weplace, and our Board accept no responsibility. Thethreshold is common and among the lower thresholds that companies have adopted. After consideration of stockholder proposal is requiredfeedback, industry trend data, and our corporate governance philosophy, we decided at this point not to be voted upon at our Annual Meeting only if properly presented at our Annual Meeting. As explained below, our Board unanimously recommends that you vote “AGAINST”lower the stockholder proposal.
California State Teachers’ Retirement System (“CalSTRS”), 100 Waterfront Place,MS-04, West Sacramento, CA 95605-2807, the beneficial owner of shares of the Company’s common stock with a market value greater than $2,000.00 on the date the proposal was submitted, has notified the Company of its intent to present the following proposal at the Annual Meeting.
RESOLVED: Shareholders of Netflix, Inc. (the “Company”) request that our board take the steps necessary so that each voting requirement in our charter and bylaws that calls for a greater than simple majority vote be eliminated, and replaced by a requirement for a majority of the votes cast for and against applicable proposals, or a simple majority in compliance with applicable laws. If necessary this means the closest standard to a majority of the votes cast for and against such proposals consistent with applicable laws.
Supporting Statement
Under Delaware law, stockholders are entitled to amend a company’s bylaws. The Company’s bylaws contain several provisions that make effective stockholder oversight difficult. These include election of directors by plurality voting, as well asfrom its current supermajority voting requirements for stockholders to amend certain portions of the bylaws relating to director elections and qualifications and the removal of directors.
In 2017, stockholders voted on a binding stockholder proposal to amendthe-Company’s bylaws that would have replaced the election of directors by plurality voting with a majority vote standard. While stockholders gave this proposal 64.6% support, it failed to reach the supermajority vote requirement.
Stockholders have repeatedly asked the Company to take the steps necessary to eliminate the supermajority voting provisions. Since 2013, stockholders have approved proposals on this topic four times. Despite greater than 80% stockholder support for these proposals in 2013, 2015, and 2016, and 63% support last year, the board has refused to act on stockholders’ clear directive.
Under Delaware law, in order to allow stockholders to amend the Company’s bylaws by majority vote, the board must take the necessary-steps to initiate the process to amend the Netflix charter.
We believe that it is important to institute simple majority voting at Netflix in order to enable effective stockholder oversight of our company.
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Netflix Opposing Statement
The Board has considered the stockholder proposal and, for the reasons described below, believes that the proposal is not in the best interests of Netflix and our stockholders.
The Board believes that this stockholder proposal seeking to adopt a simple majority vote in all cases requiring more than a simple majority would not be in the best interests of the Company and its stockholders.level. A simple majority vote requirement already applies to most corporate matters submitted to a vote of our stockholders. We believe that in the current dynamic business environment, the supermajority we have in place is appropriate to increase stability in our operations, while still being set low enough for stockholders to have a voice on issues where there is strong consensus. We will continue to monitor and evaluate this issue.
THE ROLE OF THE BOARD IN RISK OVERSIGHT The Board’s role in our risk oversight process includes reviewing and discussing with members of management areas of material risk to the Company, including strategic, operational, financial and legal risks. The Board as a whole primarily deals with matters related to strategic and operational risk. The Audit Committee deals with matters of financial and legal risk, including cybersecurity risk. The Compensation Committee addresses risks related to compensation and other talent-related matters. The Nominating and Governance Committee manages risks associated with Board independence and corporate governance. Committees report to the full Board regarding their respective considerations and actions. Throughout 2020, in response to the COVID-19 pandemic, management, with the support of our Board and Audit Committee, engaged, assessed and led our efforts to mitigate operational, employee and other risks to our business associated with the pandemic. How We are Organized BOARD MEETINGS AND COMMITTEES The Board held five meetings during 2020. Each Board member attended at least 75% of the aggregate of the total number of Board meetings and meetings of the Board committees. As of the date of this Proxy Statement, the Board has three standing committees: (1) the Compensation Committee; (2) the Audit Committee; and (3) the Nominating and Governance Committee. COMPENSATION COMMITTEE In 2020, the Compensation Committee of the Board consisted of four non-employee directors: Messrs. Belmer, Döpfner, Haley (Chair), and Ms. Sweeney. Mr. Hoag also served on the Compensation Committee until Mr. Döpfner’s appointment to the Compensation Committee in March 2020. Each member of the Compensation Committee is independent in compliance with the rules of the SEC and the listing standards of the NASDAQ Stock Market as they pertain to Compensation Committee members. Each of the Compensation Committee members is also a non-employee director under Rule 16b-3 of the Exchange Act and an outside director under section 162(m) of the Internal Revenue Code of 1986, as amended. The Compensation Committee reviews and approves all forms of compensation to be provided to our executive officers and directors. For a description of the role of the executive officers in recommending compensation and the role of any compensation consultants, please see the section entitled “Compensation Discussion and Analysis” below. The Compensation Committee held four meetings in 2020. Each member attended all the Compensation Committee meetings held in 2020. The Report of the Compensation Committee is included in this Proxy Statement. In addition, the Board has adopted a written charter for the Compensation Committee, which is available on our Investor Relations website at https://ir.netflix.net/governance/governance-docs/default.aspx. AUDIT COMMITTEE The Audit Committee of the Board consists of three non-employee directors: Mr. Barton, and Mses. Kilgore and Mather (Chair), each of whom is independent in compliance with the rules of the SEC and the listing standards of the NASDAQ Stock Market as they pertain to audit committee members. The Board has determined that Ms. Mather is an audit committee financial expert as defined by Item 407(d)(5)(ii) of Regulation S-K of the Securities Act of 1933, as amended. | | | | | 22 | | | | |
The Audit Committee engages the Company’s independent registered public accounting firm, reviews the Company’s financial controls, evaluates the scope of the annual audit, reviews audit results, consults with management and the Company’s independent registered public accounting firm prior to the presentation of financial statements to stockholders and, as appropriate, initiates inquiries into aspects of the Company’s internal accounting controls and financial affairs. The Audit Committee met seven times in 2020. Each member attended at least 75% of the Audit Committee meetings held in 2020. The Report of the Audit Committee is included in this Proxy Statement. In addition, the Board has adopted a written charter for the Audit Committee, which is available on our Investor Relations website at https://ir.netflix.net/governance/governance-docs/default.aspx. NOMINATING AND GOVERNANCE COMMITTEE The Nominating and Governance Committee of the Board consists of two non-employee directors, Messrs. Hoag (Chair) and Smith. Ambassador Rice served on the Nominating and Governance Committee through her resignation date, January 20, 2021. Each director serving on the Nominating and Governance Committee is independent under the listing standards of the NASDAQ Stock Market. The Nominating and Governance Committee reviews and approves candidates for election and to fill vacancies on the Board, including re-nominations of members whose terms are due to expire, and reviews and provides guidance to the Board on corporate governance matters. The Nominating and Governance Committee met two times in 2020. Each member attended all the Nominating and Governance Committee meetings held in 2020, other than Mr. Smith who did not attend one meeting. The Board has adopted a written charter for the Nominating and Governance Committee, which is available on our investor relations website at https://ir.netflix.net/governance/governance-docs/default.aspx. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION None of our executive officers serves on the board of directors or compensation committee of a company that has an executive officer that serves on our Board or Compensation Committee. No member of our Board is an executive officer of a company in which one of our executive officers serves as a member of the board of directors or compensation committee of that company. In 2020, the Compensation Committee consisted of Messrs. Belmer, Döpfner (from March 2020), Haley, Hoag (through March 2020) and Ms. Sweeney, none of whom is currently or was formerly an officer or employee of the Company. None of Messrs. Belmer, Döpfner, Haley, or Hoag or Ms. Sweeney had a relationship with the Company that required disclosure under Item 404 of Regulation S-K. In addition to Messrs. Belmer, Döpfner, Haley, and Hoag and Ms. Sweeney, our Co-Chief Executive Officer, Reed Hastings, and Chief Talent Officer participated in the executive compensation process for the year ended December 31, 2020 as described below in the section entitled “Compensation Discussion and Analysis.” POLICY REGARDING DIRECTOR ATTENDANCE AT THE ANNUAL MEETING Our policy regarding directors’ attendance at the annual meetings of stockholders and their attendance record at last year’s annual meeting of stockholders can be found on our Investor Relations website at https://ir.netflix.net/governance/governance-docs/default.aspx.
THE BOARD’S LEADERSHIP STRUCTURE The Board combines the role of Chairman and Chief Executive. While the Board reassesses maintaining the combined role from time to time, the Board believes that Mr. Hastings, a Co-Chief Executive Officer, is best situated to serve as Chairman because he is the director most familiar with our business and industry and is therefore best able to identify the strategic priorities to be discussed by the Board. The Board also believes that combining the role of Chairman and Co-Chief Executive Officer facilitates information flow between management and the Board and fosters strategic development and execution. The Board has appointed Jay Hoag as its lead independent director. As lead independent director, Mr. Hoag’s responsibilities include: coordinating the activities of the independent directors, and authorization to call meetings of the independent directors; coordinating with the Co-Chief Executive Officers and corporate secretary to set the agenda for Board meetings, soliciting and taking into account suggestions from other members of the Board; chairing executive sessions of the independent directors; providing feedback and perspective to the Co-Chief Executive Officers about discussions among the independent directors; helping facilitate communication among the Co-Chief Executive Officers and the independent directors; presiding at Board meetings where the Chair is not present; and performing other duties assigned from time to time by the Board. In addition, the Board maintains effective independent oversight through a number of governance practices, including, open and direct communication with management, input on meeting agendas, annual performance evaluations and regular executive sessions. How to Communicate with Us COMMUNICATIONS WITH THE BOARD We provide a process for stockholders to send communications to the Board through the email address board@netflix.com. Information regarding stockholder communications with the Board can be found on the Company’s Investor Relations website at https://ir.netflix.net/governance/governance-docs/default.aspx. | | | | | 24 | | | | |
How We are Paid Since 2015, none of our directors receive cash for services they provide as directors or members of Board committees but may be reimbursed for their reasonable expenses for attending Board and Board committee meetings. Each non-employee director receives stock options pursuant to the Director Equity Compensation Plan. The Director Equity Compensation Plan provides for a monthly grant of stock options to each non-employee director of the Company in consideration for services provided to us and subject to the terms and conditions of our equity compensation plans. We believe that for our company, compensating directors only with options is appropriate and creates the right incentives and long-term value alignment with stockholders. Without long-term value creation, directors are not compensated as the intrinsic value of options on dates of grant is zero. The Company’s Restated Certificateactual number of Incorporationoptions granted each month to each of our directors is determined by the following formula: $25,000 / ([fair market value on the date of grant] x 0.40). Each monthly grant is made on the first trading day of the month, is fully vested upon grant and Bylaws do, however, requireis exercisable at a 66 2/3% “supermajority” votestrike price equal to the fair market value on the date of grant. The table below sets forth information concerning the compensation of our non-employee directors during 2020. In each of 2018 and 2019, Compensia advised the Board on our compensation program for certain fundamentalour Board for the upcoming year, based on a comparison against our peer group’s board compensation programs and other compensation-related developments. The prior time Compensia reviewed our Board’s compensation program was in 2015, and we adjusted our Board’s compensation program in 2016. We have not made any changes to the corporate governance posturecompensation program for our Board since then. | | | | | | | | | Name | | Option Awards ($)(1) | | | Total ($) | | | | | Richard N. Barton | | | 376,943 | | | | 376,943 | (4) | | | | Rodolphe Belmer | | | 377,175 | | | | 377,175 | (5) | | | | Mathias Döpfner | | | 377,201 | | | | 377,201 | (6) | | | | Timothy M. Haley | | | 376,943 | | | | 376,943 | (7) | | | | Jay C. Hoag | | | 376,943 | | | | 376,943 | (8) | | | | Leslie Kilgore | | | 376,943 | | | | 376,943 | (9) | | | | Strive Masiyiwa(2) | | | — | | | | — | | | | | Ann Mather | | | 376,943 | | | | 376,943 | (10) | | | | Susan E. Rice(3) | | | 377,017 | | | | 377,017 | (11) | | | | Bradford L. Smith | | | 376,943 | | | | 376,943 | (12) | | | | Anne M. Sweeney | | | 376,943 | | | | 376,943 | (13) |
(1) | Option awards reflect the monthly grant of stock options to each non-employee director on the dates and at the aggregate grant date fair values computed in accordance with FASB ASC Topic 718 as shown below. Only options to purchase whole shares are granted with any remaining amount of the grant value carried over to the next monthly grant. The differences in option award values for each of Messrs. Belmer and Döpfner and Ambassador Rice reflect the different carryover amounts relating to the appointment month for each director. For a discussion of the assumptions made in the valuation reflected in the Option Awards column, refer to Note 9 to our consolidated financial statements for the fiscal year ended December 31, 2020 in our Form 10-K filed with the SEC on January 28, 2021. |
| | | | | | Grant Date | | Fair Value ($) | | | 1/2/2020 | | | | 29,336 | | | | 2/3/2020 | | | | 29,485 | | | | 3/2/2020 | | | | 29,407 | | | | 4/1/2020 | | | | 31,573 | | | | 5/1/2020 | | | | 31,800 | | | | 6/1/2020 | | | | 31,752 | | | | 7/1/2020 | | | | 32,038 | | | | 8/3/2020 | | | | 32,381 | | | | 9/1/2020 | | | | 32,127 | | | | 10/1/2020 | | | | 32,261 | | | | 11/2/2020 | | | | 32,618 | | | | 12/1/2020 | | | | 32,166 | |
(2) | Mr. Strive Masiyiwa was appointed to the Board on December 16, 2020 and did not receive a prorated grant of stock options. |
(3) | Ambassador Susan Rice served on the Board through January 20, 2021. |
(4) | Aggregate number of option awards outstanding held by Mr. Barton at December 31, 2020 was 31,411. |
(5) | Aggregate number of option awards outstanding held by Mr. Belmer at December 31, 2020 was 4,078. |
(6) | Aggregate number of option awards outstanding held by Mr. Döpfner at December 31, 2020 was 4,654. |
(7) | Aggregate number of option awards outstanding held by Mr. Haley at December 31, 2020 was 37,361. |
(8) | Aggregate number of option awards outstanding held by Mr. Hoag at December 31, 2020 was 34,162. |
(9) | Aggregate number of option awards outstanding held by Ms. Kilgore at December 31, 2020 was 11,240. |
(10) | Aggregate number of option awards outstanding held by Ms. Mather at December 31, 2020 was 16,401. |
(11) | Aggregate number of option awards outstanding held by Ms. Rice at December 31, 2020 was 4,426. |
(12) | Aggregate number of option awards outstanding held by Mr. Smith at December 31, 2020 was 23,407. |
(13) | Aggregate number of option awards outstanding held by Ms. Sweeney at December 31, 2020 was 8,240. |
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Certain Relationships and Related Transactions AGREEMENTS WITH DIRECTORS AND EXECUTIVE OFFICERS We have entered into indemnification agreements with each of our directors and executive officers. These agreements require us to indemnify such individuals, to the fullest extent permitted by Delaware law, for certain liabilities to which they may become subject as a result of their affiliation with us. PROCEDURES FOR APPROVAL OF RELATED PARTY TRANSACTIONS We have a written policy concerning the review and approval of related party transactions. Potential related party transactions are identified through an internal review process that includes a review of payments made in connection with transactions in which related persons may have had a direct or indirect material interest. Those transactions that are determined to be related party transactions under Item 404 of Regulation S-K are submitted for review by the Audit Committee for approval and to conduct a conflicts-of-interest analysis. The individual identified as the “related party” may not participate in any review or analysis of the Company, including the procedures for calling stockholder meetings, altering the sizerelated party transaction.
| | | | | | | Proposal 2 Our Auditors Ratification of Appointment of Independent Registered Public Accounting Firm | | | THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2021 | |
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The Audit Committee of the Board and removing directors. The supermajority voting requirements were adopted by our stockholders and were intendedhas selected Ernst & Young LLP (“Ernst & Young”), an independent registered public accounting firm, to preserve and maximizeaudit the valuefinancial statements of the Company for allthe year ending December 31, 2021. We are submitting its selection of Ernst & Young for ratification by the stockholders at the Annual Meeting. A representative of Ernst & Young is expected to be present at the Annual Meeting, will have the opportunity to make a statement and is expected to provide protectionbe available to respond to appropriate questions. Ernst & Young has served as our independent registered public accounting firm since March 21, 2012. Neither applicable law nor our bylaws require that stockholders ratify the selection of Ernst & Young as our independent registered public accounting firm. However, we are submitting the selection of Ernst & Young to stockholders for allratification as a matter of good corporate practice. If stockholders against self-interested actions by one ordo not ratify the selection, the Audit Committee will reconsider whether to retain Ernst & Young. Even if the selection is ratified, the Audit Committee, at its discretion, may change the appointment at any time during the year if they determine that such a few large stockholders. The Board continues to believe these requirements are appropriate and in the best interest of all stockholders; therefore, the Board opposes this stockholder proposal. For the foregoing reasons, the Board unanimously believes that this proposal is notchange would be in the best interests of Netflix or our stockholders, and recommends that you vote “AGAINST” Proposal Eight.
Required Vote
The affirmative vote of the majority of the Votes Cast is required to approve the stockholder proposal. The proposal is precatory and, accordingly, is not binding on the Board or the Company.
Netflix Recommendation
THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “AGAINST” THE STOCKHOLDER PROPOSAL FOR SIMPLE MAJORITY VOTE.
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| | | PROPOSAL NINE | | STOCKHOLDER PROPOSAL TO AMEND SECTIONS 2.8 AND 3.3 OF THE BYLAWS TO MAJORITY VOTE |
In accordance with SEC rules, we have set forth below a stockholder proposal, along with the supporting statement of the stockholder proponent, for which we and our Board accept no responsibility. The stockholder proposal is required to be voted upon at our Annual Meeting only if properly presented at our Annual Meeting. As explained below, our Board unanimously recommends that you vote “AGAINST” the stockholder proposal.
Services Employees International Union (“SEIU”), 800 Massachusetts Ave., NW, Washington, DC 20036, the beneficial owner of no less than 271 shares of the Company’s common stock on the date the proposal was submitted, has notified the Company of its intent to present the following proposal at the Annual Meeting.
RESOLVED, that the stockholders of Netflix, Inc. (“Netflix”) hereby amend the bylaws by
(a) replacing the first sentence of the third paragraph of Article III, Section 3.3, which provides for directors to be elected by a plurality of shares voted, with the following:
“Elections of directors at all meetings of the stockholders at which directors are to be elected shall be by ballot. Subject to the rights of the holders of any Preferred Stock of the corporation to elect additional directors under specified circumstances, directors shall be elected by the affirmative vote of the majority of the shares represented in person or by proxy and entitled to vote on the subject matter, provided that if the number of nominees exceeds the number of directors to be elected, the directors shall be elected by the vote of a plurality of the shares represented in person or by proxy at any such meeting.”;
(b) adding at the end of that Section 3.3 the following new paragraph:
“If an incumbent director is running uncontested and is not elected, such director shall promptly offer to tender his or her irrevocable resignation to the Board. A committee designated by the Board, will recommend to the Board whether to accept or reject the resignation, or whether other action should be taken.
The Board will act on the Committee’s recommendation and publicly disclose its decision and the rationale behind it within ninety (90) days following the date of the certification of the election results. The director who tenders his or her resignation will not participate in the Board’s decision with respect to such resignation.”;
and
(c) deleting from the first sentence of the final paragraph of Article II, Section 2.8 the phrase “other than the election of directors and” and deleting the final sentence of that Section 2.8, which states: “Directors shall be elected by a pluralityofthe votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors.”
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Supporting Statement
This proposal would amend Netflix’s bylaws so that directors in uncontested elections would be elected by a majority of shares voted. We view a majority vote standard as long overdue at Netflix. Ninety percent of S&P 500 companies have majority voting in place, according to ISS. Netflix shareholders cast a majority of yes/no votes in favor of a majority vote standard in 2013, 2014, 2016, and 2017, yet Netflix has not acted.
Shareholder support for current Netflix directors is low. Director Barton failed to receive majority support in his last election. Directors Mather and Hoag were last elected with under 60% support. By contrast, average support in S&P 500 director elections in 2017 was 97%.
Board composition is also an issue. Half of Netflix’s independent directors have tenures of at least 12 years and the board lacks racial diversity.
Netflix Opposing Statement
The Board has considered the stockholder proposal and, for the reasons described below, believes that the proposal is not in the best interests of Netflix and our stockholders.
The Board does not believe that majority votingPRINCIPAL ACCOUNTANT FEES AND SERVICES
During 2020 and 2019, fees for services provided by Ernst & Young was as follows (in thousands): | | | | | | | | | | | 2020 | | | 2019 | | | | | Audit Fees | | $ | 5,351 | | | $ | 4,936 | | | | | Audit-Related Fees | | | 70 | | | | — | | | | | Tax Fees | | | 2,096 | | | | 2,927 | | | | | Total | | $ | 7,517 | | | $ | 7,863 | |
Audit Fees include amounts related to the audit of our annual financial statements and internal control over financial reporting, and quarterly review of the financial statements included in the uncontested election of directors augments the role of stockholdersour Quarterly Reports on Form 10-Q. Audit fees also include amounts related to accounting consultations and services rendered in the election of directors. Netflix has had plurality voting in place sinceconnection with the Company’s initial public offering,issuance of senior notes in 2020 and the Board believes that this practice has served the Company2019, respectively, as well in electing highly-qualifiedas fees for statutory audit filings. Audit-Related Fees include fees related to assurance and independent directors. We expect our directors to support policiesrelated services that are inreasonably related to the long-term best interestsperformance of Netflix and our stockholders, even if such choices could lead to “withhold” vote campaigns against qualified directors. This is particularly important for our stockholders as Netflix operates in a highly competitive and extremely dynamic marketplace. As a Board, we strongly believe that a majority voting policy, and the potential distraction that ensues therefrom, does not enhance the abilityaudit or review of our directors to act in the long-term best interests of Netflix and our stockholders.financial statements, including attestation services that are not required by statute or regulation. Plurality voting is the default standard under Delaware law for the election of directors and, accordingly, the rules governing plurality voting are well-established over many decades of experience and precedent. Deviating from the Delaware standard is unnecessary given that under the plurality voting standard, stockholders have the ability to express disapproval of corporate policies, strategy or director candidates through the use of withhold votes. Institutional and retail investors successfully utilize withhold vote campaigns to influence corporate policies and director elections. The use of withhold votes provides the Board with flexibility in appropriately responding to stockholder dissatisfaction, while continuing to empower the Board to fulfill its fiduciary duty to act in the best interests of all stockholders. In addition, stockholders who are truly dissatisfied with director candidates have the ability to nominate alternative candidates and also may make recommendations for nominations directly to the Company’s Nominating and Governance committee.
For the foregoing reasons, the Board unanimously believes that this proposal is not in the best interests of Netflix or our stockholders, and recommends that you vote “AGAINST” Proposal Nine.
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Required Vote This binding proposal would amend Sections 2.8 and 3.3The four nominees receiving the highest number of the Company’s bylaws. As such, the affirmative vote of at leastsixty-six andtwo-thirds percent (66 2/3%) of the voting power of the then outstanding shares of voting stock entitled to vote generally in the election of directors, votingVotes Cast will each be elected as a single class, is required to approve the stockholder proposal.Class I directors.
Netflix Recommendation THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “AGAINST” THE STOCKHOLDER PROPOSAL TO AMEND SECTIONS 2.8 AND 3.3 OF THE BYLAWS TO MAJORITY VOTE.
| | | | | The Board unanimously recommends that the stockholders vote “FOR” the nominees listed above.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTWho We Are
The following table sets forth certain information known toBOARD OVERVIEW
Our Board is composed of 12 highly experienced, talented, and qualified directors with experience as board members and executives at some of the Company with respect to beneficial ownership of our common stock as of April 9, 2018 by (i) each stockholderworld’s most successful companies. We believe that the Company knowsBoard is well situated to navigate the beneficial ownerchanging competitive terrain that Netflix operates within. The Board has led Netflix through its evolution from a US DVD-by-mail company to a global streaming company to one of more than 5%the leading entertainment companies in the world, while effectively managing risk and overseeing management performance. By successfully navigating this evolution, our annualized total stockholder return since our initial public offering in 2002 through December 31, 2020 was 40%. | | | | | | | | | | | | | | | | | | | | | Board Tenure | | | | | | | | Gender Diversity | | | | Board balances fresh thinking, new perspectives, and emerging skill needs with institutional knowledge and stability | | | | A quarter of directors are women. | | | | | | | | | | | | | | | | | | |
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OUR DIRECTORS Directors standing for election: | | | | |
| | | | RICHARD BARTON INDEPENDENT DIRECTOR DIRECTOR SINCE: 2002 CLASS: I AGE: 53 COMMITTEES: AUDIT Why this director is valuable to Netflix Having founded successful internet-based companies (including Zillow, Expedia and GlassDoor), Mr. Barton provides strategic and technical insight to the Board. In addition, Mr. Barton brings experience with respect to marketing products to consumers through the internet. Also... Mr. Barton was a venture partner at Benchmark, a venture capital firm that has been an early-stage investor in companies like Twitter, Instagram, Uber and Zillow, from 2005 until 2018. He has served on many public company boards. Mr. Barton holds a B.S. in general engineering: industrial economics from Stanford University. Career Snapshot: • Chief Executive and co-founder of Zillow-Group (since 2010) • Co-founder and Chairman of GlassDoor (2007-2018) • Founder and Chief Executive Officer of Expedia (1996-2003) Other Public Company Boards • Qurate (formerly Liberty Interactive) • Zillow Group • Altimeter Growth Corp. • Altimeter Growth Corp. 2 |
| | | | | | | | | RODOLPHE BELMER INDEPENDENT DIRECTOR DIRECTOR SINCE: 2018 CLASS: I AGE: 51 COMMITTEES: COMPENSATION Why this director is valuable to Netflix As a media executive located in France, Mr. Belmer brings a unique international perspective to the Board. In addition, his media experience and business acumen provide the Board with valuable insight as it expands its global operations. Also... Mr. Belmer began his career in the marketing department of Procter & Gamble France before joining McKinsey in 1998. He is a graduate of France’s HEC business school. Career Snapshot: • CEO and director of Eutelsat, the leading satellite operator in Europe, the Middle East and Africa (since 2016) • CEO of Canal + Group (2012-2015); various additional roles since joining in 2001 Other Public Company Boards • None |
| | | | | | | | | BRAD SMITH INDEPENDENT DIRECTOR DIRECTOR SINCE: 2015 CLASS: I AGE: 62 COMMITTEES: NOMINATING AND GOVERNANCE Why this director is valuable to Netflix With a leading role at Microsoft, Mr. Smith brings broad business and international experience on a variety of issues, including government affairs and public policy to the Board. Mr. Smith also brings experience playing a key role in representing Microsoft externally and in leading Microsoft’s work on a number of critical issues, including privacy, security, accessibility, environmental sustainability and digital inclusion, among others, which provides additional expertise to the Board. Also... Mr. Smith has led a push for diversity within Microsoft’s legal division, advocating for increasing employment of diverse employees at the company and associated law firms. Mr. Smith holds a B.A. in international relations and economics from Princeton, a J.D. from Columbia University School of Law and also studied international law and economics at the Graduate Institute of International Studies in Geneva. Career Snapshot: • President and Chief Legal Officer of Microsoft (since 2015); he originally joined Microsoft in 1993 • Associate and then Partner, Covington & Burling (1986-1993) Other Public Company Boards • None |
| | | | | | | | | ANNE SWEENEY INDEPENDENT DIRECTOR DIRECTOR SINCE: 2015 CLASS: I AGE: 63 COMMITTEES: COMPENSATION Why this director is valuable to Netflix Ms. Sweeney has held various senior positions with large entertainment companies, which provided her with broad strategic and operational experience. Her experience in the entertainment industry provides a unique business perspective to the Board as Netflix builds its global internet TV network. Also... Ms. Sweeney’s entertainment experience spans more than three decades, including her oversight of Disney’s cable, broadcast and satellite properties globally for 18 years. During that time, she was charged with launching and running over 118 Disney Channels in 164 countries in 34 languages, and had oversight over various ABC properties including ABC Television Network, ABC Studios and the Disney ABC Cable Networks Group. Prior to Disney, she was CEO of FX Networks, Inc. from 1993 to 1996 and spent more than 12 years at Viacom’s Nickelodeon Network. She holds an Ed. M. From Harvard University and a B.A. from the College of New Rochelle. Career Snapshot: • Co-chair of Disney Media Networks and President of Disney/ABC Television Group (1996-2015) • Chairman and CEO of FX Networks, part of the Fox Entertainment Group/21st Century Fox (1993-1996) Other Public Company Boards • None |
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Directors not standing for election: | | | | | | | | | REED HASTINGS CO-CHIEF EXECUTIVE OFFICER AND PRESIDENT OF THE COMPANY, AND CHAIRMAN OF THE BOARD DIRECTOR AND CHAIRMAN SINCE: 1997 CLASS: III (EXPIRES 2023) AGE: 60 COMMITTEES: NONE Why this director is valuable to Netflix Mr. Hastings, as co-founder and Co-Chief Executive Officer, deeply understands the technology and business of Netflix and brings strategic and operational insight to the Board. He is also a software engineer, holds an MSCS in Artificial Intelligence from Stanford University, and has unique management and industry insights. Also... Mr. Hastings is an active educational philanthropist: he served on the California State Board of education from 2000 to 2004, and after receiving his B.A. from Bowdoin College in 1983 served in the Peace Corps as a high school math teacher in Swaziland. Mr. Hastings previously served on the board of Facebook, Inc. from 2011-2019. Career Snapshot: • Founder, Co-Chief Executive Officer, President and Chairman of Netflix (since 1997) • Founder, Pure Software (1991) through IPO (1995) and ultimate sale to Rational Software Other Public Company Boards • None |
| | | | | | | | | JAY C. HOAG LEAD INDEPENDENT DIRECTOR DIRECTOR SINCE: 1999 CLASS: III (EXPIRES 2023) AGE: 62 COMMITTEES: NOMINATING AND GOVERNANCE (CHAIR) Why this director is valuable to Netflix As a venture capital investor, Mr. Hoag brings strategic insights and financial experience to the Board. He has evaluated, invested in and served as a board member on numerous companies, both public and private, and is familiar with a full range of corporate and board functions. His many years of experience in helping companies shape and implement strategy provide the Board with unique perspectives on matters such as risk management, corporate governance, talent selection and management. Also... Mr. Hoag has been a technology investor and venture capitalist for more than 38 years, involved in a large number of technology investments including Altiris (acquired by Symantec), CNET, Expedia, Facebook, Fandango (acquired by Comcast), Intuit, and Sybase. Mr. Hoag is on the Investment Advisory Committee at the University of Michigan, the Board of Trustees of Northwestern University, and the Board of Trust at Vanderbilt University. Previously, Mr. Hoag has served on the board of directors of numerous other public and private companies, including TechTarget, Inc. from 2004-2016. Mr. Hoag holds an M.B.A. from the University of Michigan and a B.A. from Northwestern University. Career Snapshot: • Founding General Partner at TCV (Technology Crossover Ventures), a venture capital firm (since 1995) Other Public Company Boards • Electronic Arts • Peloton Interactive • TCV Acquisition Corp. • TripAdvisor • Zillow Group |
| | | | | | | | | MATHIAS DÖPFNER INDEPENDENT DIRECTOR DIRECTOR SINCE: 2018 CLASS: III (EXPIRES 2023) AGE: 58 COMMITTEES: COMPENSATION Why this director is valuable to Netflix As a media executive located in Germany, Mr. Döpfner brings international perspective, media experience and business acumen to the Board. Also... Mr. Döpfner has extensive experience in media and digital transformation and a strong track record of increasing revenues related to digital activities. He previously served on the boards of Vodafone Group plc (2015-2018) and Time Warner Inc. (2006-2018). Additionally, his relationships and honorary offices at entities including the American Academy, the American Jewish Committee and the European Publishers Council among many others provide him with relevant insight and perspective in international media. He studied Musicology, German and Theatrical Arts in Frankfurt and Boston. Career Snapshot: • Chairman and CEO, Axel Springer SE, Europe’s leading digital publishing house (since 2002) • His former roles at Axel Springer SE include editor-in-chief of Die Welt (1998-2000) and as a member of the Management Board (starting in 2000) • Visiting Professor in media at University of Cambridge, St. John’s College (2010) Other Public Company Boards • Warner Music Group |
| | | | | | | | | TIMOTHY HALEY INDEPENDENT DIRECTOR DIRECTOR SINCE: 1998 CLASS: II (EXPIRES 2022) AGE: 66 COMMITTEES: COMPENSATION (CHAIR) Why this director is valuable to Netflix As a venture capital investor, Mr. Haley brings strategic and financial experience to the Board. He has evaluated, invested in and served as a board member on numerous companies. His executive recruiting background also provides the Board with insight into talent selection and management. Also... Mr. Haley was President of Haley Associates, an executive recruiting firm serving the high technology industry from 1986 - 1998, and serves on the boards of several private companies. Mr. Haley holds a B.A. from Santa Clara University. Career Snapshot: • Managing Director, Redpoint Ventures, a venture capital firm (since 1999) • Managing Director, Institutional Venture Partners, a venture capital firm (since 1998) Other Public Company Boards • 2U, Inc. • ThredUp • Zuora |
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| | | | | | | | | LESLIE KILGORE DIRECTOR DIRECTOR SINCE: 2012 (INDEPENDENT SINCE 2015) CLASS: II (EXPIRES 2022) AGE: 55 COMMITTEES: AUDIT Why this director is valuable to Netflix Ms. Kilgore’s experience as a marketing executive with internet retailers and consumer product companies provides a unique business perspective and her numerous managerial positions provide strategic and operational experience to the Board. Also... As our former Chief Marketing Officer, Ms. Kilgore deeply understands the Netflix business and is able to bring years of marketing experience to the Board. She holds an M.B.A. from the Stanford University Graduate School of Business and a B.S. from The Wharton School of Business at the University of Pennsylvania. She previously served on the board of LinkedIn Corp., and she currently serves on the boards of several other companies. Career Snapshot: • Chief Marketing Officer of Netflix (2000-2012) • Director of Marketing at Amazon (1999-2000) • Brand manager at The Procter & Gamble Company (1992-1999) Other Public Company Boards • Medallia • Pinterest |
| | | | | | | | | STRIVE MASIYIWA INDEPENDENT DIRECTOR DIRECTOR SINCE: 2020 CLASS: II (EXPIRES 2022) AGE: 60 COMMITTEES: NONE Why this director is valuable to Netflix As the Chairman and founder of Econet Global, a telecommunications and technology group with operations and investments in 29 countries in Africa and Europe, Mr. Masiyiwa provides a unique international perspective to the Board. In addition, his experience in building businesses across Africa and the world provides the Company with valuable insight as it expands globally. Also... Mr. Masiyiwa serves on several international boards including Unilever Plc, National Geographic Society, Asia Society, and the Global Advisory boards of Bank of America, the Council on Foreign Relations (in the US), Stanford University, and the Prince of Wales Trust for Africa, and is a longstanding board member of the United States Holocaust Museum’s Committee on Conscience. A former board member of the Rockefeller Foundation for 15 years, he is Chairman Emeritus of the Alliance for a Green Revolution in Africa (AGRA) and African Union Special Envoy to the continent’s COVID response. He received a BSc in Electrical and Electronic Engineering from the University of Wales. Mr. Masiyiwa has received honorary doctorates from Morehouse College, Yale University, Nelson Mandela University and Cardiff University. Career Snapshot: • Founder and Executive Chairman of Econet Global (1993-Present) Other Public Company Boards • Unilever Plc |
| | | | | | | | | ANN MATHER INDEPENDENT DIRECTOR DIRECTOR SINCE: 2010 CLASS: II (EXPIRES 2022) AGE: 61 COMMITTEES: AUDIT (CHAIR, FINANCIAL EXPERT) Why this director is valuable to Netflix Ms. Mather’s experience as an executive with several major media companies provides a unique business perspective. As a former CFO and senior finance executive at major corporations, she brings more than 20 years of financial and accounting expertise to the Board. Additionally, Ms. Mather’s numerous managerial positions and service on public company boards provides strategic, operational and corporate governance experience. Also... Ms. Mather previously served on the board of Shutterfly, Inc., a photography and image-sharing company (2013-2019) and Glu Mobile Inc., a publisher of mobile games (2005-2021). She has also been an independent trustee to the board of trustees of Dodge & Cox Funds, a mutual fund, since May 2011. She received her M.A. from Cambridge University, and is an Honorary Fellow of Sidney Sussex College Cambridge. Career Snapshot: • Executive Vice President and CFO of Pixar (1999 - 2004) • Executive Vice President and CFO of Village Roadshow Pictures (1999) • Various executive positions at The Walt Disney Company (1993-1999) Other Public Company Boards • Alphabet (formerly Google) • Airbnb • Bumble • Arista Networks |
| | | | | | | | | TED SARANDOS CO-CHIEF EXECUTIVE OFFICER AND CHIEF CONTENT OFFICER OF THE COMPANY DIRECTOR SINCE: 2020 CLASS: III (EXPIRES 2023) AGE: 56 COMMITTEES: NONE Why this director is valuable to Netflix Mr. Sarandos, as Co-Chief Executive Officer and Chief Content Officer, is integral to developing corporate strategy and oversees the teams responsible for the acquisition, creation and promotion of all Netflix content including original series from around the world. His in-depth knowledge about Netflix and experience in the entertainment industry provide a unique business perspective to the Board. Also... Mr. Sarandos has been responsible for all content operations since 2000, and led the Company’s transition into original content production that began in 2013 with the launch of series such as House of Cards, Arrested Development and Orange is the New Black. With more than 20 years’ experience in home entertainment, he is recognized in the industry as an innovator in film acquisition and distribution and was named one of Time Magazine’s 100 Most Influential People of 2013. He is a Henry Crown Fellow at the Aspen Institute and serves on the board of Exploring The Arts, a nonprofit focused on arts in schools. Mr. Sarandos also serves on the Film Advisory Board for the Tribeca and Los Angeles Film Festivals, is an American Cinematheque board member, an Executive Committee Member of the Academy of Television Arts & Sciences and is a trustee of the American Film Institute. Career Snapshot: • Co-Chief Executive Officer (since July 2020) and Chief Content Officer of Netflix (since 2000) • Executive at video distributor ETD and Video City/West Coast video, a video rental retail chain • Producer/Executive Producer for award-winning and critically acclaimed documentaries and independent films including the Emmy-nominated Outrage and Tony Bennett: The Music Never Ends. Other Public Company Boards • Spotify |
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BOARD SKILLS AND EXPERIENCE Our Board believes that having a diverse mix of our common stock, (ii) each directordirectors with complementary skills, experience, and nominee for director, (iii) each ofexpertise is important to meeting its oversight responsibility. That diversity, combined with transparent and broad access to information and exposure to management beyond the executive officers, named inallows the “Summary Executive Compensation” table, which we referBoard to asexercise effective management oversight and to ensure the Named Executive Officers, and (iv) all executive officers and directors ascare of our stockholders’ interests. Below are a group. The Company has relied upon information provided to the Company by its directors and Named Executive Officers and copies of documents sent to the Company that have been filed with the SEC by others for purposes of determining the number of sharesskills that our Board members bring to Netflix. If an individual is not listed under a particular attribute, it does not signify a director’s lack of ability to contribute in such area. | | | | | | | | | | | Leadership | | | | | | Experience and expertise in identifying and developing opportunities for long-term value creation, including experience in driving innovation, opening markets, improving operations, identifying risks, and executing successfully. | | | | Richard Barton Rodolphe Belmer Mathias Döpfner Timothy Haley Reed Hastings Jay Hoag | | Leslie Kilgore Strive Masiyiwa Ann Mather Brad Smith Ted Sarandos Anne Sweeney | | | | | | | Strategy | | | | | | Experience and expertise in identifying and developing opportunities for long-term value creation, including experience in driving innovation, opening markets, improving operations, identifying risks, and executing successfully. | | | | Richard Barton Rodolphe Belmer Mathias Döpfner Timothy Haley Reed Hastings Jay Hoag | | Leslie Kilgore Strive Masiyiwa Ann Mather Ted Sarandos Brad Smith Anne Sweeney | | | | | | | Finance & Accounting | | | | | | Management or oversight of the finance function of an enterprise, resulting in proficiency in complex financial management, capital allocation, and financial reporting processes. | | | | Richard Barton Rodolphe Belmer Mathias Döpfner Timothy Haley Reed Hastings | | Jay Hoag Leslie Kilgore Ann Mather Anne Sweeney | | | | | | | Entertainment & Media | | | | | | Experience and expertise with the entertainment and media industry, resulting in a deep understanding of consumer expectations and innovations in content and delivery. | | | | Richard Barton Rodolphe Belmer Mathias Döpfner Reed Hastings | | Leslie Kilgore Ann Mather Ted Sarandos Anne Sweeney | | | | | | | Demographic Diversity | | | | | | Representation of gender, ethnic, race, geographic, cultural, or other perspectives that expand the Board’s understanding of the needs and viewpoints of our members, partners, employees, governments, and other stakeholders worldwide. | | | | Rodolphe Belmer Mathias Döpfner Leslie Kilgore | | Strive Masiyiwa Ann Mather Anne Sweeney |
| | | | | | | | | | | Global Business & Government Relations | | | | | | Expertise in global business cultures, consumer preferences, and /or government relations gained through local experience in international markets or senior positions overseeing public policy. | | | | Rodolphe Belmer Mathias Döpfner Strive Masiyiwa | | Ann Mather Brad Smith | | | | | | | Technology | | | | | | Experience and expertise in technology-related business or technology functions, resulting in knowledge of how to anticipate technological trends, understand and manage technology related risks, generate disruptive innovation, and extend or create new business models. | | | | Richard Barton Reed Hastings Jay Hoag | | Strive Masiyiwa Brad Smith | | | | | | | Marketing | | | | | | Experience and expertise developing strategies to grow market share, package and position product offerings, build brand awareness and equity, and enhance enterprise reputation. | | | | Richard Barton Rodolphe Belmer | | Leslie Kilgore Ted Sarandos | | | | | | | Human Capital Management | | | | | | Experience and expertise related to human resource issues such as attracting and retaining talent, succession planning, engagement of employees, and the development and evolution of culture, including the alignment of culture and long-term strategy. | | | | Timothy Haley Reed Hastings | | Ted Sarandos |
DIRECTOR INDEPENDENCE The Board has determined that each person beneficially owns. Beneficial ownership is determined in accordance withof Messrs. Barton, Belmer, Döpfner, Haley, Hoag, Masiyiwa and Smith, and Mses. Kilgore, Mather, and Sweeney are independent under the applicable rules and regulations of the SEC and generally includesthe listing standards of the NASDAQ Stock Market; therefore, every member of the Audit Committee, Compensation Committee and Nominating and Governance Committee is an independent director in accordance with those persons who have voting or investment powerstandards. In addition, the Board determined that Ambassador Rice was independent during the time she served on the Board. | | | | | 18 | | | | |
How We are Selected, Elected and Evaluated CONSIDERATION OF DIRECTOR NOMINEES Director Qualifications In discharging its responsibilities to nominate candidates for election to the Board, the Nominating and Governance Committee has not specified any minimum qualifications for serving on the Board. However, the Nominating and Governance Committee endeavors to evaluate, propose and approve candidates with business experience, diversity, as well as personal skills and knowledge with respect to the securities. Except as otherwise indicated,technology, finance, marketing, financial reporting and subjectany other areas that may be expected to applicable community property laws, the persons named in the table have sole voting and investment power withcontribute to an effective Board. With respect to all sharesdiversity, the committee may consider such factors as diversity in viewpoint, professional experience, education, international experience, skills and other individual qualifications and attributes that contribute to board heterogeneity, including characteristics such as gender, race, and national origin. Identifying and Evaluating Nominees for Directors The Nominating and Governance Committee utilizes a variety of methods for identifying and evaluating nominees for director. Candidates may come to the attention of the Company’s common stock beneficially owned by them. SharesNominating and Governance Committee through management, current Board members, stockholders or other persons. These candidates are evaluated at meetings of the Company’s common stock subject to options that are currently exercisable or exercisable within 60 days of April 9, 2018 are also deemed outstanding for purposes of calculatingNominating and Governance Committee as necessary and discussed by the percentage ownership of that person, and if applicable, the percentage ownershipmembers of the executive officersNominating and directors as a group, but are not treated as outstandingGovernance Committee from time to time. Candidates may be considered at any point during the year. The Nominating and Governance Committee considers properly submitted stockholder nominations for candidates for the purposeBoard. Following verification of calculating the percentage ownershipstockholder status of persons proposing candidates, recommendations are aggregated and considered by the Nominating and Governance Committee. If any materials are provided by a stockholder in connection with the nomination of a director candidate, such materials are forwarded to the Nominating and Governance Committee. The Nominating and Governance Committee also reviews materials provided by professional search firms or other person. Unless otherwise indicated,parties in connection with a nominee who is not proposed by a stockholder. Stockholder Nominees The Nominating and Governance Committee considers properly submitted stockholder nominations for candidates for membership on the addressBoard as described above under “Identifying and Evaluating Nominees for eachDirectors.” Any stockholder listed innominations proposed for consideration by the table below is c/oNominating and Governance Committee should include the nominee’s name and qualifications for Board membership. In addition, they should be submitted within the time frame as specified under “Stockholder Proposals” above and mailed to: Netflix, Inc., 100 Winchester Circle, Los Gatos, CA 95032.California 95032, Attention: Secretary. Our bylaws provide a proxy access right for stockholders, pursuant to which a stockholder, or a group of up to 20 stockholders, owning at least three percent of outstanding shares of our common stock continuously for at least three years, may nominate and include in our annual meeting proxy materials director nominees constituting up to the greater of (a) two directors or (b) twenty percent of the Board, subject to certain limitations and provided that the stockholders and nominees satisfy the requirements specified in our bylaws. | | | | | | | | | Name and Address | | Number of Shares Beneficially Owned | | | Percent of Class | | Capital Research Global Investors(1) 333 South Hope Street Los Angeles, CA 90071 | | | 44,954,952 | | | | 10.34% | | The Vanguard Group, Inc.(2) 100 Vanguard Blvd Malvern, PA 19355 | | | 28,913,685 | | | | 6.65% | | BlackRock, Inc.(3) 55 East 52nd Street New York, NY 10055 | | | 25,799,694 | | | | 5.94% | | FMR LLC(4) 245 Summer Street Boston, MA 02210 | | | 24,810,211 | | | | 5.71% | | The Growth Fund of America(5) 6455 Irvine Center Drive Irvine, CA 92618 | | | 22,546,471 | | | | 5.19% | | Reed Hastings(6) | | | 10,759,989 | | | | 2.48% | | Jay C. Hoag(7) 528 Ramona Street Palo Alto, CA 94301 | | | 4,987,752 | | | | 1.15% | | Neil Hunt(8) | | | 1,245,937 | | | | * | | Ted Sarandos(9) | | | 497,699 | | | | * | | David Hyman (10) | | | 211,911 | | | | * | |
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| | | | | | | | | Name and Address | | Number of Shares Beneficially Owned | | | Percent of Class | | David Wells(11) | | | 210,815 | | | | * | | Greg Peters (12) | | | 207,928 | | | | * | | A. George (Skip) Battle(13) | | | 158,276 | | | | * | | Richard N. Barton(14) | | | 87,909 | | | | * | | Timothy M. Haley(15) c/o Redpoint Ventures 3000 Sand Hill Road Building 2, Suite 290 Menlo Park, CA 94025 | | | 65,687 | | | | * | | Leslie Kilgore(16) | | | 51,589 | | | | * | | Ann Mather(17) | | | 36,735 | | | | * | | Bradford L. Smith(18) | | | 17,867 | | | | * | | Anne M. Sweeney(19) | | | 17,867 | | | | * | | Rodolphe Belmer(20) | | | 673 | | | | * | | Susan E. Rice(21) | | | 222 | | | | * | | All directors and executive officers as a group (19 persons)(22) | | | 18,632,785 | | | | 4.29% | | | | | | | | | | |
OUR BOARD EVALUATION PROCESS Each year, our Board conducts a self-evaluation process to help assure and enhance its performance. This process is overseen by the Nominating and Governance Committee, and involves interviews of each director by our Chief Legal Officer. Feedback is sought primarily in the following areas: (a) the Board’s effectiveness, structure, culture and composition, (b) the quality of and access to information shared with the Board about our business and (c) performance of the directors and quality of Board discussions. How We Govern and are Governed OUR APPROACH TO CORPORATE GOVERNANCE Corporate Governance Philosophy Netflix operates in a dynamic industry and has been in a state of constant innovation since inception. We have redefined how people watch video—first through DVD-by-mail, then streaming video, and now as one of the world’s leading entertainment services with approximately 208 million memberships in 190 countries. Our success has not gone unnoticed, and we are seeing increasing competition, even as this dynamic market continues to evolve. Our corporate governance structure is built against this backdrop. Governance, in this context, means finding the right balance of rights and responsibilities among stockholders, the Board, and management, and ensuring that there are appropriate checks and balances in place. With the rapid evolution of technology and the changing media landscape, we are continually adjusting our service to meet the dynamic needs and desires of our consumers. Our governance structure is built to help us to do that. Our focus is on creating long-term value for our stockholders, and we have been successful at that – since our initial public offering in 2002, annualized total stockholder return through December 31, 2020 was 40%. Our governance structure is unconventional. We have several provisions that give our Board and our management team the freedom to be forward-thinking, such as making investments to build our own production studios and developing our own animation capabilities, with the confidence that they will be able to see those investments to fruition. At the same time, we have paid attention to our stockholders and increased our accountability to them by adopting provisions such as proxy access. We are proud of our governance structure, both because of how it has supported our success to date and for being innovative, such as the way that our Board has unfettered access to management and is able to seek information directly from employees all around the enterprise. We strive to stay in tune with our ownership base. Our Board and our management team engage directly with our stockholders, and our Board and its committees consider stockholders’ feedback in assessing our governance structure, including our compensation program. These discussions provide a good opportunity to share views and answer questions; the input from our stockholders will continue to inform our ongoing evaluation of our structure. We believe our approach to governance will continue to provide the greatest benefit to Netflix and our stockholders. We realize that elements of our structure may not fit within the standard corporate governance practices and that some stockholders take a different view. But we believe that Netflix’s long-term value is currently best optimized with our approach to governance. * | Less than 1% of the Company’s outstanding shares of common stock. | | | | 20 | | | | |
Stockholder Engagement and 2020 Stockholder Proposals At our 2020 annual meeting, stockholders presented three proposals for vote. One proposal requested additional disclosure around political spending, and the proposal did not receive majority support from stockholders. The second proposal requested that we lower the two-thirds supermajority requirement for amending our charter and bylaws to a simple majority. This proposal did receive majority support from stockholders. The third proposal sought a public report regarding our equal employment opportunity policy, and received less than 1% support from stockholders. We consider the voting results for stockholders proposals in our Board discussions and as we contemplate our governance structure. We also engaged with stockholders to solicit feedback on a broad range of topics, including these stockholder proposals. We held 10 virtual meetings in the fall of 2020 with stockholders representing approximately 25% of our common stock outstanding. Members of the Board, accompanied by Company representatives as appropriate, participated in each of these conversations. We also held numerous engagement meetings earlier in 2020, prior to our 2020 annual meeting. In addition to governance and compensation matters, our discussions in 2020 centered on our approach to environmental, social and governance (ESG) matters; diversity, equity and inclusion; our response to the COVID-19 pandemic; and our dual CEO management structure. Investors expressed a desire to see improved disclosure on environmental and social matters, which the recent hire of our Sustainability Officer is intended to help address. We have also recently increased our disclosure about these topics partly in response to investor feedback by publishing an Inclusion Report in January 2021 along with our EEO-1 and ESG reports. We also discussed our approach to governance, including our goal of ensuring that we are best able to execute our long-term vision, which we believe is in the best interests of all stockholders. Investors understood our rationale for our governance structure, even if they disagreed with it. While investors inquired about our dual CEO model and how it works for Netflix, none expressed that it was inappropriate for us. We explained that the dual CEO model formalized the prior working relationship between Reed and Ted, and was an effective leadership model to further support our continued growth and international expansion. Stockholders gave us high marks for our response to the COVID-19 pandemic, such as our focus on employee well-being and our efforts to support the creative industry through our establishment of hardship funds. The feedback on our compensation program was limited, with many investors understanding and supportive of our approach to compensation. While we did not hear thematic concerns about our compensation program during our meetings, one stockholder questioned some components of our compensation program, including the ability of our executives to allocate their compensation between cash and stock options. We further note that our current practice with respect to our supermajority provision is a mainstream practice. According to data from FactSet, more than forty percent of S&P 500 companies have supermajority provisions in place, and our threshold is common and among the lower thresholds that companies have adopted. After consideration of stockholder feedback, industry trend data, and our corporate governance philosophy, we decided at this point not to lower the voting requirement from its current supermajority level. A simple majority vote requirement already applies to most corporate matters submitted to a vote of our stockholders. We believe that in the current dynamic business environment, the supermajority we have in place is appropriate to increase stability in our operations, while still being set low enough for stockholders to have a voice on issues where there is strong consensus. We will continue to monitor and evaluate this issue. (1) | As of December 29, 2017, based on information provided by Capital Research Global Investors in the Schedule 13G filed February 14, 2018. Of the shares beneficially owned, Capital Research Global Investors reported that it has sole dispositive power and sole voting power with respect to all of the shares. | | | | | | 2021 PROXY STATEMENT | | 21 |
(2) | As of December 31, 2017, based on information provided by The Vanguard Group, Inc. in the Schedule 13G filed February 9, 2018. Of the shares beneficially owned, The Vanguard Group, Inc. reported that it has sole dispositive power with respect to 28,222,829 shares, shared dispositive power with respect to 690,856 shares, sole voting power with respect to 614,092 shares and shared voting power with respect to 92,889 shares. |
(3) | As of December 31, 2017, based on information provided by BlackRock, Inc. in the Schedule 13G filed February 8, 2018. Of the shares beneficially owned, BlackRock, Inc. reported that it has sole dispositive power with respect to all of the shares and sole voting power with respect to 22,290,287 shares. |
(4) | As of December 31, 2017, based on information provided by FMR LLC in the Schedule 13G filed on February 13, 2018. Of the shares beneficially owned, FMR LLC reported that it has sole voting power with respect to 3,389,323 and sole dispositive power with respect to all of the shares. |
(5) | As of December 29, 2017, based on information provided by The Growth Fund of America in the Schedule 13G filed February 14, 2018. According to information in that filing, these shares may also be reflected in the filing made by Capital Research Global Investors. The Growth Fund of America has no sole or shared dispositive or voting power with respect to the shares beneficially owned. |
(6) | Includes options to purchase 5,201,042 shares. Mr. Hastings is a trustee of the Hastings-Quillin Family Trust, which is the holder of 5,558,947 of the Company’s shares. |
(7) | Includes (i) 2,313,810 common shares that are directly held by TCV VII, L.P. (“TCV VII”), (ii) 1,201,602 common shares that are directly held by TCV VII (A), L.P. (“TCV VII (A)”), (iii) 20,008 common shares that are directly held by TCV Member Fund, L.P. (“Member Fund”), (iv) 640,434
THE ROLE OF THE BOARD IN RISK OVERSIGHT The Board’s role in our risk oversight process includes reviewing and discussing with members of management areas of material risk to the Company, including strategic, operational, financial and legal risks. The Board as a whole primarily deals with matters related to strategic and operational risk. The Audit Committee deals with matters of financial and legal risk, including cybersecurity risk. The Compensation Committee addresses risks related to compensation and other talent-related matters. The Nominating and Governance Committee manages risks associated with Board independence and corporate governance. Committees report to the full Board regarding their respective considerations and actions. Throughout 2020, in response to the COVID-19 pandemic, management, with the support of our Board and Audit Committee, engaged, assessed and led our efforts to mitigate operational, employee and other risks to our business associated with the pandemic. How We are Organized BOARD MEETINGS AND COMMITTEES The Board held five meetings during 2020. Each Board member attended at least 75% of the aggregate of the total number of Board meetings and meetings of the Board committees. As of the date of this Proxy Statement, the Board has three standing committees: (1) the Compensation Committee; (2) the Audit Committee; and (3) the Nominating and Governance Committee. COMPENSATION COMMITTEE In 2020, the Compensation Committee of the Board consisted of four non-employee directors: Messrs. Belmer, Döpfner, Haley (Chair), and Ms. Sweeney. Mr. Hoag also served on the Compensation Committee until Mr. Döpfner’s appointment to the Compensation Committee in March 2020. Each member of the Compensation Committee is independent in compliance with the rules of the SEC and the listing standards of the NASDAQ Stock Market as they pertain to Compensation Committee members. Each of the Compensation Committee members is also a non-employee director under Rule 16b-3 of the Exchange Act and an outside director under section 162(m) of the Internal Revenue Code of 1986, as amended. The Compensation Committee reviews and approves all forms of compensation to be provided to our executive officers and directors. For a description of the role of the executive officers in recommending compensation and the role of any compensation consultants, please see the section entitled “Compensation Discussion and Analysis” below. The Compensation Committee held four meetings in 2020. Each member attended all the Compensation Committee meetings held in 2020. The Report of the Compensation Committee is included in this Proxy Statement. In addition, the Board has adopted a written charter for the Compensation Committee, which is available on our Investor Relations website at https://ir.netflix.net/governance/governance-docs/default.aspx. AUDIT COMMITTEE The Audit Committee of the Board consists of three non-employee directors: Mr. Barton, and Mses. Kilgore and Mather (Chair), each of whom is independent in compliance with the rules of the SEC and the listing standards of the NASDAQ Stock Market as they pertain to audit committee members. The Board has determined that Ms. Mather is an audit committee financial expert as defined by Item 407(d)(5)(ii) of Regulation S-K of the Securities Act of 1933, as amended. |
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The Audit Committee engages the Company’s independent registered public accounting firm, reviews the Company’s financial controls, evaluates the scope of the annual audit, reviews audit results, consults with management and the Company’s independent registered public accounting firm prior to the presentation of financial statements to stockholders and, as appropriate, initiates inquiries into aspects of the Company’s internal accounting controls and financial affairs. The Audit Committee met seven times in 2020. Each member attended at least 75% of the Audit Committee meetings held in 2020. The Report of the Audit Committee is included in this Proxy Statement. In addition, the Board has adopted a written charter for the Audit Committee, which is available on our Investor Relations website at https://ir.netflix.net/governance/governance-docs/default.aspx. NOMINATING AND GOVERNANCE COMMITTEE The Nominating and Governance Committee of the Board consists of two non-employee directors, Messrs. Hoag (Chair) and Smith. Ambassador Rice served on the Nominating and Governance Committee through her resignation date, January 20, 2021. Each director serving on the Nominating and Governance Committee is independent under the listing standards of the NASDAQ Stock Market. The Nominating and Governance Committee reviews and approves candidates for election and to fill vacancies on the Board, including re-nominations of members whose terms are due to expire, and reviews and provides guidance to the Board on corporate governance matters. The Nominating and Governance Committee met two times in 2020. Each member attended all the Nominating and Governance Committee meetings held in 2020, other than Mr. Smith who did not attend one meeting. The Board has adopted a written charter for the Nominating and Governance Committee, which is available on our investor relations website at https://ir.netflix.net/governance/governance-docs/default.aspx. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION None of our executive officers serves on the board of directors or compensation committee of a company that has an executive officer that serves on our Board or Compensation Committee. No member of our Board is an executive officer of a company in which one of our executive officers serves as a member of the board of directors or compensation committee of that company. In 2020, the Compensation Committee consisted of Messrs. Belmer, Döpfner (from March 2020), Haley, Hoag (through March 2020) and Ms. Sweeney, none of whom is currently or was formerly an officer or employee of the Company. None of Messrs. Belmer, Döpfner, Haley, or Hoag or Ms. Sweeney had a relationship with the Company that required disclosure under Item 404 of Regulation S-K. In addition to Messrs. Belmer, Döpfner, Haley, and Hoag and Ms. Sweeney, our Co-Chief Executive Officer, Reed Hastings, and Chief Talent Officer participated in the executive compensation process for the year ended December 31, 2020 as described below in the section entitled “Compensation Discussion and Analysis.” POLICY REGARDING DIRECTOR ATTENDANCE AT THE ANNUAL MEETING Our policy regarding directors’ attendance at the annual meetings of stockholders and their attendance record at last year’s annual meeting of stockholders can be found on our Investor Relations website at https://ir.netflix.net/governance/governance-docs/default.aspx.
THE BOARD’S LEADERSHIP STRUCTURE The Board combines the role of Chairman and Chief Executive. While the Board reassesses maintaining the combined role from time to time, the Board believes that Mr. Hastings, a Co-Chief Executive Officer, is best situated to serve as Chairman because he is the director most familiar with our business and industry and is therefore best able to identify the strategic priorities to be discussed by the Board. The Board also believes that combining the role of Chairman and Co-Chief Executive Officer facilitates information flow between management and the Board and fosters strategic development and execution. The Board has appointed Jay Hoag as its lead independent director. As lead independent director, Mr. Hoag’s responsibilities include: coordinating the activities of the independent directors, and authorization to call meetings of the independent directors; coordinating with the Co-Chief Executive Officers and corporate secretary to set the agenda for Board meetings, soliciting and taking into account suggestions from other members of the Board; chairing executive sessions of the independent directors; providing feedback and perspective to the Co-Chief Executive Officers about discussions among the independent directors; helping facilitate communication among the Co-Chief Executive Officers and the independent directors; presiding at Board meetings where the Chair is not present; and performing other duties assigned from time to time by the Board. In addition, the Board maintains effective independent oversight through a number of governance practices, including, open and direct communication with management, input on meeting agendas, annual performance evaluations and regular executive sessions. How to Communicate with Us COMMUNICATIONS WITH THE BOARD We provide a process for stockholders to send communications to the Board through the email address board@netflix.com. Information regarding stockholder communications with the Board can be found on the Company’s Investor Relations website at https://ir.netflix.net/governance/governance-docs/default.aspx. | | | | | 24 | | | | |
How We are Paid Since 2015, none of our directors receive cash for services they provide as directors or members of Board committees but may be reimbursed for their reasonable expenses for attending Board and Board committee meetings. Each non-employee director receives stock options pursuant to the Director Equity Compensation Plan. The Director Equity Compensation Plan provides for a monthly grant of stock options to each non-employee director of the Company in consideration for services provided to us and subject to the terms and conditions of our equity compensation plans. We believe that for our company, compensating directors only with options is appropriate and creates the right incentives and long-term value alignment with stockholders. Without long-term value creation, directors are not compensated as the intrinsic value of options on dates of grant is zero. The actual number of options granted each month to each of our directors is determined by the following formula: $25,000 / ([fair market value on the date of grant] x 0.40). Each monthly grant is made on the first trading day of the month, is fully vested upon grant and is exercisable at a strike price equal to the fair market value on the date of grant. The table below sets forth information concerning the compensation of our non-employee directors during 2020. In each of 2018 and 2019, Compensia advised the Board on our compensation program for our Board for the upcoming year, based on a comparison against our peer group’s board compensation programs and other compensation-related developments. The prior time Compensia reviewed our Board’s compensation program was in 2015, and we adjusted our Board’s compensation program in 2016. We have not made any changes to the compensation program for our Board since then. | | | | | | | | | Name | | Option Awards ($)(1) | | | Total ($) | | | | | Richard N. Barton | | | 376,943 | | | | 376,943 | (4) | | | | Rodolphe Belmer | | | 377,175 | | | | 377,175 | (5) | | | | Mathias Döpfner | | | 377,201 | | | | 377,201 | (6) | | | | Timothy M. Haley | | | 376,943 | | | | 376,943 | (7) | | | | Jay C. Hoag | | | 376,943 | | | | 376,943 | (8) | | | | Leslie Kilgore | | | 376,943 | | | | 376,943 | (9) | | | | Strive Masiyiwa(2) | | | — | | | | — | | | | | Ann Mather | | | 376,943 | | | | 376,943 | (10) | | | | Susan E. Rice(3) | | | 377,017 | | | | 377,017 | (11) | | | | Bradford L. Smith | | | 376,943 | | | | 376,943 | (12) | | | | Anne M. Sweeney | | | 376,943 | | | | 376,943 | (13) |
(1) | common shares that are directly held by Orange Investor, L.P. (“Orange Investor”), (v) 172,704 common shares that are directly held by Orange Investor (A), L.P. (“Orange Investor (A)”), (vi) 39,777 common shares that are directly held by Orange Investor (B), L.P. (“Orange Investor (B)”), (vii) 47,085 common shares that are directly held by Orange (MF) Investor, L.P. (“Orange Investor (MF)”), (viii)Option awards reflect the monthly grant of stock options to each non-employee director on the dates and at the aggregate grant date fair values computed in accordance with FASB ASC Topic 718 as shown below. Only options to purchase 49,741 commonwhole shares are granted with any remaining amount of the grant value carried over to the next monthly grant. The differences in option award values for each of Messrs. Belmer and Döpfner and Ambassador Rice reflect the different carryover amounts relating to the appointment month for each director. For a discussion of the assumptions made in the valuation reflected in the Option Awards column, refer to Note 9 to our consolidated financial statements for the fiscal year ended December 31, 2020 in our Form 10-K filed with the SEC on January 28, 2021. |
| | | | | | Grant Date | | Fair Value ($) | | | 1/2/2020 | | | | 29,336 | | | | 2/3/2020 | | | | 29,485 | | | | 3/2/2020 | | | | 29,407 | | | | 4/1/2020 | | | | 31,573 | | | | 5/1/2020 | | | | 31,800 | | | | 6/1/2020 | | | | 31,752 | | | | 7/1/2020 | | | | 32,038 | | | | 8/3/2020 | | | | 32,381 | | | | 9/1/2020 | | | | 32,127 | | | | 10/1/2020 | | | | 32,261 | | | | 11/2/2020 | | | | 32,618 | | | | 12/1/2020 | | | | 32,166 | |
(2) | Mr. Strive Masiyiwa was appointed to the Board on December 16, 2020 and did not receive a prorated grant of stock options. |
(3) | Ambassador Susan Rice served on the Board through January 20, 2021. |
(4) | Aggregate number of option awards outstanding held by Jay C. Hoag, (ix) 421,836 common sharesMr. Barton at December 31, 2020 was 31,411. |
(5) | Aggregate number of option awards outstanding held by the Hoag Family Trust U/A Dtd 8/2/94 (the “Hoag Family Trust”), and (x) 80,755 common sharesMr. Belmer at December 31, 2020 was 4,078. |
(6) | Aggregate number of option awards outstanding held by Hamilton Investments Limited Partnership (“Hamilton Investments”).Mr. Döpfner at December 31, 2020 was 4,654. |
(7) | Aggregate number of option awards outstanding held by Mr. Haley at December 31, 2020 was 37,361. |
(8) | Aggregate number of option awards outstanding held by Mr. Hoag at December 31, 2020 was 34,162. |
(9) | Aggregate number of option awards outstanding held by Ms. Kilgore at December 31, 2020 was 11,240. |
(10) | Aggregate number of option awards outstanding held by Ms. Mather at December 31, 2020 was 16,401. |
(11) | Aggregate number of option awards outstanding held by Ms. Rice at December 31, 2020 was 4,426. |
(12) | Aggregate number of option awards outstanding held by Mr. Smith at December 31, 2020 was 23,407. |
(13) | Aggregate number of option awards outstanding held by Ms. Sweeney at December 31, 2020 was 8,240. |
Jay C. Hoag
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Certain Relationships and eight other individuals (the “Class A Directors”) are Class A Directors of Technology Crossover Management VII, Ltd. (“Management VII”) and limited partners of Technology Crossover Management VII, L.P. (“TCM VII”) and Member Fund. Management VII is the general partner of TCM VII, which is the general partner of TCV VII and TCV VII (A). Management VII is also a general partner of Member Fund. The Class A Directors of Management VII and TCM VII may be deemed to beneficially own the securities held by TCV VII, TCV VII (A) and Member Fund, but Related Transactions AGREEMENTS WITH DIRECTORS AND EXECUTIVE OFFICERS We have entered into indemnification agreements with each of our directors and executive officers. These agreements require us to indemnify such individuals, to the Classfullest extent permitted by Delaware law, for certain liabilities to which they may become subject as a result of their affiliation with us. PROCEDURES FOR APPROVAL OF RELATED PARTY TRANSACTIONS We have a written policy concerning the review and approval of related party transactions. Potential related party transactions are identified through an internal review process that includes a review of payments made in connection with transactions in which related persons may have had a direct or indirect material interest. Those transactions that are determined to be related party transactions under Item 404 of Regulation S-K are submitted for review by the Audit Committee for approval and to conduct a conflicts-of-interest analysis. The individual identified as the “related party” may not participate in any review or analysis of the related party transaction.
| | | | | | | Proposal 2 Our Auditors Ratification of Appointment of Independent Registered Public Accounting Firm | | | THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF ERNST & YOUNG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE YEAR ENDING DECEMBER 31, 2021 | |
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The Audit Committee of the Board has selected Ernst & Young LLP (“Ernst & Young”), an independent registered public accounting firm, to audit the financial statements of the Company for the year ending December 31, 2021. We are submitting its selection of Ernst & Young for ratification by the stockholders at the Annual Meeting. A Directors, Management VIIrepresentative of Ernst & Young is expected to be present at the Annual Meeting, will have the opportunity to make a statement and TCM VII disclaim beneficial ownershipis expected to be available to respond to appropriate questions. Ernst & Young has served as our independent registered public accounting firm since March 21, 2012. Neither applicable law nor our bylaws require that stockholders ratify the selection of Ernst & Young as our independent registered public accounting firm. However, we are submitting the selection of Ernst & Young to stockholders for ratification as a matter of good corporate practice. If stockholders do not ratify the selection, the Audit Committee will reconsider whether to retain Ernst & Young. Even if the selection is ratified, the Audit Committee, at its discretion, may change the appointment at any time during the year if they determine that such securities excepta change would be in the best interests of the Company and our stockholders. PRINCIPAL ACCOUNTANT FEES AND SERVICES During 2020 and 2019, fees for services provided by Ernst & Young was as follows (in thousands): | | | | | | | | | | | 2020 | | | 2019 | | | | | Audit Fees | | $ | 5,351 | | | $ | 4,936 | | | | | Audit-Related Fees | | | 70 | | | | — | | | | | Tax Fees | | | 2,096 | | | | 2,927 | | | | | Total | | $ | 7,517 | | | $ | 7,863 | |
Audit Fees include amounts related to the audit of our annual financial statements and internal control over financial reporting, and quarterly review of the financial statements included in our Quarterly Reports on Form 10-Q. Audit fees also include amounts related to accounting consultations and services rendered in connection with the Company’s issuance of senior notes in 2020 and 2019, respectively, as well as fees for statutory audit filings. Audit-Related Fees include fees related to assurance and related services that are reasonably related to the performance of the audit or review of our financial statements, including attestation services that are not required by statute or regulation. Tax Fees include fees billed for tax compliance, tax advice and tax planning services. There were no other fees billed by Ernst & Young for services rendered to us, other than the services described above, in 2020 and 2019. The Audit Committee has determined that the rendering of non-audit services by Ernst & Young was compatible with maintaining their independence. POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT SERVICES OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Audit Committee pre-approves all audit and permissible non-audit services provided by our independent registered public accounting firm. These services may include audit services, audit-related services, tax and other services. Pre-approval is generally provided for up to one year, and any pre-approval is detailed as to the particular service or category of services. The independent registered public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of their pecuniary interest therein.services provided by the independent registered Mr. Hoag and seven other individuals are Class A Directors of Technology Crossover Management VIII, Ltd. (“Management VIII”) and a limited partners of Technology Crossover Management VIII, L.P. (“TCM VIII”). Management VIII is the sole general partner of TCM VIII, which
public accounting firm in turn is the sole general partner of TCV VIII, L.P., which in turn is the sole member of Orange Investor GP, LLC (“Orange GP”), which in turn is the sole general partner of Orange Investor, Orange (A) Investor, Orange (B) Investor, and Orange (MF) Investor. The Class A Directors of Management VIII and TCM VIII may be deemed to beneficially own the shares held by Orange Investor, Orange (A) Investor, Orange (B) Investor, and Orange (MF) Investor but disclaim beneficial ownership of such shares except to the extent of their pecuniary interest therein. The shares held by Orange Investor, Orange (A) Investor, Orange (B) Investor, and Orange (MF) Investor are also pledged as collateral for a third party debt facility. Mr. Hoag has the sole power to dispose and direct the disposition of the options and any shares issuable upon exercise of the options,accordance with this pre-approval, and the sole powerfees for the services performed to directdate. The Audit Committee may also pre-approve particular services on a case-by-case basis. During 2020, services provided by Ernst & Young were pre-approved by the Audit Committee in accordance with this policy.
Required Vote The affirmative vote of the sharesmajority of common stockthe Votes Cast is required for ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2021. The vote is an advisory vote, and therefore not binding. Netflix Recommendation | | | | | The Board unanimously recommends that the stockholders vote “FOR” the ratification of the appointment of Ernst & Young LLP as the company’s independent registered public accounting firm for the year ending December 31, 2021. |
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Report of the Audit Committee of the Board The Audit Committee engages and supervises the Company’s independent registered public accounting firm and oversees the Company’s financial reporting process on behalf of the Board. Management has the primary responsibility for the preparation of financial statements and the reporting process, including the systems of internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed the audited financial statements in the Company’s annual report on Form 10-K for the year ended December 31, 2020 with management, including a discussion of the quality of the accounting principles, the reasonableness of significant judgments made by management and the clarity of disclosures in the financial statements. The Audit Committee reviewed with Ernst & Young LLP (“Ernst��& Young”), the Company’s independent registered public accounting firm, who is responsible for expressing an opinion on the conformity of the Company’s audited financial statements with accounting principles generally accepted in the United States of America, its judgments as to the quality of the Company’s accounting principles and the other matters required to be received upon exercisediscussed with the Audit Committee under the auditing standards generally accepted in the United States of America, including the matters required by Auditing Standard No. 1301, Communications with Audit Committees, issued by the Public Company Accounting Oversight Board (“PCAOB”). In addition, the Audit Committee has discussed with Ernst & Young its independence from management and the Company, including the written disclosures and the letter regarding its independence as required by PCAOB Rule 3526, Communication with Audit Committees Concerning Independence. The Audit Committee also reviewed the fees paid to Ernst & Young during the year ended December 31, 2020 for audit and non-audit services, which fees are described under the heading “Principal Accountant Fees and Services.” The Audit Committee has determined that the rendering of all non-audit services by Ernst & Young were compatible with maintaining its independence. The Audit Committee discussed with Ernst & Young the overall scope and plans for its audit. The Audit Committee met with Ernst & Young, with and without management present, to discuss the results of its examinations, its evaluations of the options. However, with respectCompany’s internal controls, and the overall quality of the Company’s financial reporting. Based on the reviews and discussions referred to above, the Audit Committee recommended to the options, Mr. Hoag has transferred to TCV VII Management, L.L.C. (“TCV VII Management”)Board that the audited financial statements be included in the annual report on Form 10-K for the year ended December 31, 2020, for filing with the Securities and TCV VIII Management, L.L.C. (“TCV VIII Management”) 100%Exchange Commission. Audit Committee of the pecuniary interest in such options and any shares to be issued upon exercise of such options. Mr. Hoag is a member of TCV VII Management and TCV VIII Management but disclaims beneficial ownership of such options and any shares to be received upon exercise of such options except to the extent of his pecuniary interest therein.Board Mr. Hoag is a trustee of the Hoag Family Trust and may be deemed to have the sole power to dispose or direct the disposition of the shares held by the Hoag Family Trust. Mr. Hoag disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein.Richard N. Barton
Mr. Hoag is the sole general partner and a limited partner of Hamilton Investments and may be deemed to have the sole power to dispose or direct the disposition of the shares held by Hamilton Investments. Mr. Hoag disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein.Leslie Kilgore
Ann Mather 36
OUR COMPANY EXECUTIVE OFFICERS
Our executive officers as of April 23, 2021 are as follows: | | | | | Executive Officers | | | | Position | | | | Reed Hastings | | 60 | | Co-Chief Executive Officer, President, and Chairman of the Board | | | | David Hyman | | 55 | | Chief Legal Officer and Secretary | | | | Jessica Neal(1) | | 44 | | Chief Talent Officer | | | | Spencer Neumann | | 51 | | Chief Financial Officer | | | | Greg Peters | | 50 | | Chief Operating Officer and Chief Product Officer | | | | Bozoma Saint John | | 44 | | Chief Marketing Officer | | | | Ted Sarandos | | 56 | | Co-Chief Executive Officer and Chief Content Officer | | | | Rachel Whetstone | | 53 | | Chief Communications Officer |
For more information about Messrs. Hastings and Sarandos, see “Proposal One: Our Board of Directors—Election of Directors—Who We Are.” Information about our other executive officers is set forth below: | | | | | | | | | | | | | DAVID HYMAN CHIEF LEGAL OFFICER AGE: 55 About: As Chief Legal Officer, David is responsible for all legal and public policy matters for the Company. He also serves as the Company’s Secretary. Also... David practiced law at Morrison & Foerster in San Francisco and Arent Fox in Washington, DC. He earned his JD and Bachelor’s degrees from the University of Virginia. Career Snapshot: • Chief Legal Officer and Secretary of Netflix (since 2002) Prior: • General Counsel of Webvan, an online internet retailer |
| | | | | | | | | | | | | JESSICA NEAL CHIEF TALENT OFFICER AGE: 44 About: Jessica leads the team that maintains the Company’s unique corporate culture, hires new talent and keeps the organization lean and flexible despite enormous growth. Also... Jessica is a Netflix veteran, starting at the company in 2006 when DVD was king and streaming just a dream, and has been heavily involved in improving the Netflix culture as the company grew. After roles at Coursera and Scopley, she rejoined the Netflix team in her current role. Jessica joined the JFrog board in 2020 and served as a board member for the Association of Talent Development from 2016 to 2019. Career Snapshot: • Chief Talent Officer at Netflix (since 2017) Prior: • Chief People Officer at Scopely, a leading player in the mobile gaming industry (2015-2017) • Head of Human Resources at Coursera, which provides online access to the world’s best university courses |
(1) | Ms. Neal will be departing from the Company in May 2021. |
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8. | Includes options | | | |
| | | | SPENCER NEUMANN CHIEF FINANCIAL OFFICER AGE: 51 About: Spencer was named CFO of Netflix in January of 2019, utilizing his finance, strategy, and accounting experience in media, entertainment and service oriented companies to purchase 844,641 shares. |
9. | Includes optionscontinue to purchase 497,699 shares. |
10. | Includes options to purchase 180,301 shares. |
11. | Includes options to purchase 210,815 shares. |
12. | Includes options to purchase 194,838 shares. |
13. | Includes options to purchase 102,276 shares. Mr. Battlebuild on the company’s track record of success and innovation.Also... Spencer also worked at the private equity firms of Providence Equity Partners and Summit Partners. Additional positions at The Walt Disney Company, which he initially joined in 1992, included executive vice president of the ABC Televisions Network and CFO of the Walt Disney Internet Group. He is a trusteemember of the A. George Battle 2012 Separate Property Trust,national board of directors of Make-A-Wish America. Spencer holds both a B.A. in economics and an M.B.A. from Harvard University. Career Snapshot: • CFO of Netflix (since 2019) Prior: • CFO of Activision Blizzard, a video gaming company (2017-2019) • CFO and executive vice president of Global Guest Experience of Walt Disney Parks and Resorts, among other positions at the Walt Disney Company, a diversified multinational media and entertainment company (2012-2017) |
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| | | | GREG PETERS CHIEF OPERATING OFFICER AND CHIEF PRODUCT OFFICER AGE: 50 About: As Chief Operating Officer and Chief Product Officer, Greg oversees global operations and leads the product team, which isdesigns, builds and optimizes the holderNetflix experience including applications and user interfaces. Also... Greg previously held positions at digital entertainment software provider, Mediabolic Inc., Red Hat Network, the provider of 56,000Linux and Open Source technology, and online vendor Wine.com. He holds a degree in physics and astronomy from Yale University. Greg joined the board of the Company’s shares. |
14. | Includes options to purchase 60,866 shares. Mr. Barton is2U, Inc., a trusteeglobal leader in education technology, in March of the Barton Family Foundation, which is the holder2018.Career Snapshot: • Chief Operating Officer (since July 2020) and Chief Product Officer of 20,000Netflix (since 2017) Prior: • International Development Officer of the Company’s shares. |
15. | Includes options to purchase 65,687 shares. |
16. | Includes options to purchase 16,393 shares. |
17. | Includes options to purchase 36,735 shares. |
18. | Includes options to purchase 17,867 shares. |
19. | Includes options to purchase 17,867 shares. |
20. | Includes options to purchase 673 shares. |
21. | Includes options to purchase 222 shares. |
22. | Includes, without duplication, the sharesNetflix (2015-2017)• Chief Streaming and options listed in footnotes (6) through (21) above.Partnerships Officer of Netflix • Senior Vice President of consumer electronics products for Macrovision Solutions Corp. (later renamed Rovi Corporation), a technology company |
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| | | | | | | | | BOZOMA SAINT JOHN CHIEF MARKETING OFFICER AGE: 44 About: Bozoma was appointed Chief Marketing Officer in August 2020. Also... Bozoma has been recognized for her breakthrough work by both the industry and her peers, having been inducted into the American Advertising Federation Hall of Achievement in 2014. Additionally, Bozoma serves on the boards of Girls Who Code and Vital Voices and in March 2017, she was named as a Henry Crown Fellow by the Aspen Institute. She holds a BA in English and African American Studies from Wesleyan University. Career Snapshot: • Chief Marketing Officer of Netflix (since August 2020) Prior: • Chief Marketing Officer of Endeavor, a talent and media agency (2018-2020) • Chief Brand Officer at Uber, a multinational ride-sharing company (2017-2018) • Head of Global Consumer Marketing, Apple Music & iTunes (2014-2017) |
| | | | | | | | | RACHEL WHETSTONE CHIEF COMMUNICATIONS OFFICER AGE: 53 About: Rachel leads our public relations globally. Also... Rachel has spent the last 20 years working on communications and policy issues for US companies. She also serves as a director of Udacity. Rachel is a graduate of Bristol University and spent the first half of her career working as a policy advisor for the UK Conservative Party. Career Snapshot: • Chief Communications Officer at Netflix (since 2018) Prior: • Vice President of Communications at Facebook, a social media and technology company (2017-2018) • Senior Vice President of Communications & Public Policy at Uber, a multinational ride-sharing company (2015-2017) • Senior Vice President of Communications & Public Policy at Google, an internet-related services and products company (2005-2015) |
There are no family relationships among any of our directors, nominees for director and executive officers. | | | | | 36 | | | | |
| | | | | | | Proposal 3 Our Pay Advisory Approval of Executive Officer Compensation | | | THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “FOR” APPROVAL OF OUR EXECUTIVE OFFICER COMPENSATION DISCLOSED IN THIS PROXY STATEMENT. | |
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COMPENSATION DISCUSSION AND ANALYSISAs required by section 14A of the Securities Exchange Act, as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), we are providing our stockholders with the opportunity to cast a non-binding advisory vote on the compensation of our Named Executive Officers, as disclosed pursuant to the compensation disclosure rules of the SEC (also referred to as “say-on-pay”).
PhilosophyWe currently hold our advisory say-on-pay vote every year. Stockholders will have an opportunity to cast an advisory vote on the frequency of say-on-pay votes at least every six years. We currently expect that the next advisory vote on the frequency of the say-on-pay votes will occur at the 2023 annual meeting of stockholders.
The Company’sAs described in our Compensation Discussion and Analysis, we have adopted an executive compensation philosophy is premised on the Company’s desiredesigned to attract and retain outstanding performers. Our compensation practices are guided by market rates and tailored to account for the specific needs and responsibilities of the particular position, as well as the performance and unique qualifications of the individual employee, rather than by seniority or overall Company performance.
Required Vote The affirmative vote of the majority of the Votes Cast is required to approve the compensation of our Named Executive Officers disclosed in this Proxy Statement. The vote is an advisory vote, and therefore not binding. Netflix Recommendation | | | | | The Board unanimously recommends that the stockholders vote “FOR” approval of our executive officer compensation disclosed in this Proxy Statement. |
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COMPENSATION DISCUSSION AND ANALYSIS
A MESSAGE FROM THE COMPENSATION COMMITTEE CHAIR 2020 presented unprecedented challenges, with effects of the COVID-19 pandemic felt around the world by nearly every business. Our executive officers demonstrated strong leadership in navigating the pandemic, acting quickly to implement measures to care for the health and safety of our employees, to continue providing great content for our members, and to promote the financial strength of our company for our stockholders. In response to stockholder feedback, we aimed to more clearly explain our compensation program in our compensation disclosures last year and updated our insider trading policy to prohibit certain hedging and pledging transactions. The Board, alongside management, continued to actively engage with stockholders throughout 2020 to ensure we are addressing relevant questions and concerns, to seek input, and to provide perspective on our policies and practices. We discussed a broad spectrum of topics, including environmental, social and governance matters; diversity, equity and inclusion; and our executive compensation program. We have heard from a number of our stockholders that the enhanced disclosures and information have been helpful to stockholders and resulted in a better understanding of our compensation program. The Board and Compensation Committee considered the input from our stockholders and the results of our annual Say-on-Pay vote and continue to strongly believe that our compensation program’s design is a significant contributor to Netflix’s success and is highly aligned with stockholder interests. Therefore, we are not making material changes to the executive compensation program for 2021. The Compensation Committee will continue to explore ways that we can implement changes to the program desired by some stockholders while preserving the program’s general design and value to Netflix and our stockholders. We will also continue to provide transparent disclosures about our compensation program and to solicit input from our stockholders. Thank you for being a stockholder and joining us on this journey to change the way people are entertained. We appreciate your commitment to Netflix and we will continue to endeavor to make your commitment worthwhile. Tim Haley Compensation Committee Chairperson OUR COMPANY AND 2020 PERFORMANCE Netflix is one of the world’s leading entertainment services with approximately 208 million paid memberships in over 190 countries. We launched our streaming service in 2007, and have since added increasing amounts of content that enable consumers to enjoy entertainment directly on their internet-connected screens. Our content is increasingly exclusive and curated and includes our own original programming. We believe that Netflix remains a growth venture, even though we have been a public company for nearly 20 years. We added a record 37 million paid memberships in 2020, representing an increase of 31% over the prior year and achieved approximately $25 billion in revenue, representing 24% year-over-year growth. Our profitability also improved, with operating income rising 76% year over year while operating margins increased from 13% to 18%. We manage our business for the long term with a focus on stockholder value creation. Consistent with this approach, our annualized total stockholder return since our initial public offering in 2002 through December 31, 2020 was 40%. In 2020, we continued to invest heavily in content to great success. As noted in our investor letters, some of our big hits included new series like Tiger King: Murder, Mayhem and Madness, The Queen’s Gambit, and Bridgerton. Season four of the critically acclaimed The Crown was its biggest season so far and new seasons of Ozark and La Casa de Papel (aka, Money Heist) continued to entertain our members. Original films premiered a wide variety of successes such as The Old Guard, Extraction, and The Midnight Sky. We continued to expand our local language | | | | | 40 | | | | |
content, which was not only impactful in the home country but was enjoyed around the globe. As a testament to the quality of our programming, our titles were nominated for 160 Emmys and an industry-leading 36 Academy Award nominations within the last year. We’re also proud to lead the industry in nominations at both the 2021 NAACP Image Awards (53 nominations) and the GLAAD Media Awards (26 nominations). We are also producing content from countries all over the world as we believe great stories can come from anywhere and can be enjoyed everywhere. STOCKHOLDER ENGAGEMENT AND THE 2020 SAY-ON-PAY VOTE RESULT In 2020, 61.5% of voted shares approved the compensation of our Named Executive Officers. At the time of the vote in 2020, the Compensation Committee had already approved the design of our 2020 executive compensation program. The Compensation Committee reviewed these voting results, and in response, members of the Compensation Committee and management engaged with stockholders to solicit feedback regarding our compensation program. In the fall of 2020, we invited stockholders representing approximately 47% of our shares outstanding to engage with us on a variety of issues, specifically including executive compensation. We held 10 virtual meetings in the fall of 2020 with stockholders representing approximately 25% of our common stock outstanding, including stockholders that did not support our 2020 vote. Members of the Board, accompanied by Company aimsrepresentatives as appropriate, participated in each of these conversations. We also held numerous engagement meetings earlier in 2020, prior to our 2020 annual meeting. In addition to compensation matters, the discussions also focused on our approach to environmental, social and governance (ESG) matters; diversity, equity and inclusion; our response to the COVID-19 pandemic; and our dual CEO management structure. These meetings reconfirmed that ESG and diversity, equity and inclusion matters were increasingly top of mind for our investors. Investors expressed a desire to see improved disclosure on environmental and social matters, which the recent hire of our Sustainability Officer is intended to help address. We have also recently increased our disclosure about these topics partly in response to investor feedback by publishing an Inclusion Report in January 2021 along with our EEO-1 data and ESG reports. This and other ESG information is available on our Investor Relations website at ir.netflix.net. While investors inquired about our dual CEO model and how it works for Netflix, none expressed that it was inappropriate for us. We explained that the dual CEO model formalized the prior working relationship between Reed and Ted and was an effective leadership model to further support our continued growth and international expansion. Stockholders gave us high marks for our response to the COVID-19 pandemic, such as our focus on employee well-being and our efforts to support the creative industry through our establishment of hardship funds. Regarding governance, investors understood our rationale for our governance structure, even if they disagreed with it. The feedback on our compensation program was limited, with many investors understanding and supportive of our approach to compensation. While we did not hear thematic concerns about our compensation program during our meetings, one stockholder questioned some components of our compensation program, including the ability of our executives to allocate their compensation between cash and stock options. Our Compensation Committee considered stockholder feedback in its deliberations regarding 2021 compensation and will continue to consider feedback in ongoing executive compensation decisions.
2020 NAMED EXECUTIVE OFFICERS This Compensation Discussion and Analysis describes the compensation program for our Named Executive Officers. During 2020, these individuals were: Reed Hastings, Co-Chief Executive Officer, President, and Chairman of the Board • | | Ted Sarandos, Co-Chief Executive Officer and Chief Content Officer(1) |
Spencer Neumann, Chief Financial Officer • | | Greg Peters, Chief Operating Officer and Chief Product Officer(1) |
David Hyman, Chief Legal Officer Rachel Whetstone, Chief Communications Officer COMPENSATION PHILOSOPHY We aim to provide highly competitive compensation packages for all itsour key positions, including itsour Named Executive Officers. The Company’sOur compensation practices are guided by market rates andalso tailored to account for the specific needs and responsibilities of the particular position, as well as the performance and unique qualifications of the individual employee, rather than by seniority or overall Company performance. Individual compensation is nonetheless linked to Company performance by virtue of the stock options granted by the Company.we grant. Determining Executive Compensation
This Compensation Discussion and Analysis describes the compensation programs for the Company’s Named Executive Officers. During 2017, these individuals were:
Reed Hastings, Chief Executive Officer
David Wells, Chief Financial Officer
Greg Peters, Chief Product Officer
Ted Sarandos, Chief Content Officer
David Hyman, General Counsel and Secretary
Neil Hunt, former Chief Product Officer
Mr. Hunt’s employment with the Company terminated on June 23, 2017, but based on the compensation paid to him in 2017 by the Company, he is included as a Named Executive Officer. Mr. Peters was promoted to Chief Product Officer from International Development Officer effective July 2017, following Mr. Hunt’s departure.
In 2017, the Company’s compensation program for Named Executive Officers centered around three components: salary, stock options and performance-based bonuses. The compensation associated with each of these components was expressed in a dollar-denominated amount and was allocated among these components, as described below. For 2018, the Company will not offer performance-based bonuses and all cash compensation will be paid as salary
In determining the compensation for its Named Executive Officers, the Compensation Committee (A) reviews and considers the performance of each Named Executive Officer and (B) considers, for each Named Executive Officer, the estimated amount of compensation:
| (i) | the Company would be willing pay to retain that person; |
| (ii) | the Company would have to pay to replace the person; and |
| (iii) | the individual could otherwise command in the employment marketplace. |
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The Chief Executive Officer, in consultation with the Chief Talent Officer, reviews comparative data derived from market research and publicly available information for each of the Named Executive Officers1. The Chief Executive Officer then makes recommendations to the Compensation Committee regarding compensation for each Named Executive Officer. The Compensation Committee reviews and discusses the information and then determines a dollar-denominated amount availableaims for allocation to the compensation components described above (“allocatable compensation”) for each Named Executive Officer, as it deems appropriate.program to be simple to understand and administer, to be transparent to both stockholders and executive officers, and to create a long-term alignment between our stockholders and our executive officers.
The Chief Executive Officer’sOur compensation is determinedpractices are evaluated by the Compensation Committee outside the presence of the Chief Executive Officer. The Committee’s decision regarding compensation for the Chief Executive Officer is based on the philosophy outlined above and includes a review of comparative data and consideration of the accomplishments of the Chief Executive Officer in developing the business strategy for the Company, the performance of the Company relative to this strategy and his ability to attract and retain senior management. In establishing the Chief Executive Officer’s compensation, the Compensation Committee is also mindful of the results of the stockholder’s Advisory Vote on Executive Compensation for the prior year.
In determining compensation for 2017, the Compensation Committee retained Compensia, a management consulting firm providing executive compensation advisory services, to help the Committee assess the competitiveness of the Chief Executive Officer’s compensation, obtain a general understanding of chief executive compensation practices in the marketplace and as a resource for its deliberations concerning the Chief Executive Officer’s specific compensation. The Compensation Committee did not use the information from Compensia, however, with the goal of setting a specific target compensation level based upon percentiles derived from such other companies. In 2017, the Compensation Committee worked with Compensia in determining an appropriate peer group of companies. The peer group reflected the Company’s continued orientation toward media companies and consumer-facing technology companies. The peer group for 2017 was comprised of the following companies: Activision Blizzard, Adobe Systems, AMC Networks, CBS, Discovery Communications, Dolby Laboratories, eBay, Electronic Arts, Lions Gate Entertainment, PayPal Holdings, salesforce.com, Scripps Networks Interactive, Sirius XM Holdings, The Priceline Group, Time Warner, Twenty-first Century Fox, Twitter, Viacom, Walt Disney and Workday. For 2018, the Compensation Committee again worked with Compensia to determine the appropriate peer group of companies for the Company. The peer group for 2018 is comprised of the following companies: Activision Blizzard, Adobe Systems, AMC Networks, CBS, Discovery Communications, DISH Network, eBay, Electronic Arts, Lions Gate Entertainment, PayPal Holdings, salesforce.com, Scripps Networks Interactive, Sirius XM Holdings, The Priceline Group, Time Warner, Twenty-first Century Fox, Twitter, Viacom, Walt Disney and Workday. Total fees paid to Compensia were less than $120,000 in each year.
With respect to each of the Named Executive Officers, in determining compensation, the Compensation Committee considered the Company’s compensation philosophy as outlined above, comparative market data and specific factors relative to each Named Executive Officer’s responsibilities and performance. The Company does not specifically benchmark compensation for its Named Executive Officers in terms of picking a particular percentile relative to other people with similar titles at peer group companies. The Company believes that many subjective factors unique to each Named Executive Officer’s responsibilities and performance are not adequately reflected or otherwise accounted for in a percentile-based compensation determination.
1 | In 2017, the Chief Talent Officer position was vacant at the time Named Executive Officer compensation was determined. |
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In determining Mr. Hunt’s 2017 compensation, the Committee considered his responsibility for the development and deployment of the Company’s increasing engineering systems and product offerings across the globe and in multiple languages, as well as the continued market demand for engineering talent. In determining Mr. Sarandos’s 2017 compensation, the Committee considered his role in obtaining globally relevant content for the Company’s international expansion, his significant contributions to the Company’s original content strategy and buildout of the infrastructure to support that strategy, and the market demand for high-level content programming talent. In determining Mr. Wells’s 2017 compensation, the Committee considered his performance in managing the finance organization as the Company’s business continues to evolve and grow internationally. In determining Mr. Peters’s 2017 compensation, the Committee considered his performance in maintaining and expanding our business operations across the globe, in particular Japan and markets in the Asia-Pacific region and his responsibilities in assisting the Company with its consumer electronic and network operator relationships. When Mr. Peters became Chief Product Officer in July 2017, the Committee also considered his responsibility for the development and deployment of the Company’s increasing engineering systems and product offerings across the globe and in multiple languages, as well as the continued market demand for engineering talent, and increased his compensation accordingly. In determining Mr. Hyman’s 2017 total compensation, the Committee considered his performance in managing and developing a global legal and public policy function.
The Company’s compensation practices are evaluated on an ongoing basis to determine whether they are appropriate to attract, retain and reward outstanding performers. Such evaluations may result in refinements to the compensation program, including changes in how compensation is determined and awarded.
COMPENSATION PROGRAM OVERVIEW The key elements of our compensation program applicable to the majority of our employees, including our Named Executive Officers, and how they align with our compensation philosophy are as follows: • | | Only two pay components, salary and stock options. Our compensation program consists of only base salary and stock options. It is the same program for our executive officers as it is for the majority of our employees. We use stock options as we believe that they correlate compensation with stockholder returns, and encourage a long-term perspective, especially given how we’ve designed the stock option allocation portion of our program in which employees can allocate cash compensation toward stock options. Importantly, as described below, our stock price needs to appreciate 40% before the employee is better off allocating cash to stock options. We do not use performance-based bonuses as we believe that they tend to incentivize specific, typically short-term focused behavior rather than encourage long-term stockholder value creation. |
Personal Choice. We set a dollar-denominated annual compensation amount for each eligible employee (“allocatable compensation”) who can then choose to allocate any portion of that compensation amount toward (1) | Effective July 14, 2020, Mr. Sarandos was appointed as Co-Chief Executive Officer, in addition to his role as Chief Content Officer, and Mr. Peters was appointed as Chief Operating Officer, in addition to his role as Chief Product Officer. Mr. Sarandos was also appointed to the Board as a Class III director effective July 14, 2020. Neither Mr. Sarandos nor Mr. Peters received an increase in compensation in connection with these appointments. |
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| stock options. We believe that providing choice and flexibility helps us better compete for talent as the individual employee can customize their compensation to fit varying lifestyle needs. |
Monthly Grants. We grant stock options on the first trading day of each month with the number of options granted based on the closing stock price on that trading day (see formula below). We believe granting options monthly produces a dollar cost averaging effect—unlike annual grants which are more subject to the vagaries of the market—which helps reduce the potential negative impacts with employee distraction and morale. Minimum stock option grants. Through 2020, in addition to the choice described above, each eligible employee, including executive officers, was awarded a minimum annual stock option allowance (generally based upon 5% of their total allocatable compensation). Beginning in 2021, in an effort to maximize flexibility and personal choice for our employees, the minimum option grants have been eliminated for most employees and the value has been added to the employee’s total allocatable compensation. Objective and Transparent Stock Option Grant Formula. The number of monthly stock options granted is determined by the following formula: | | | (the amount of an employee’s total annual stock option allocation/12) | | | (the closing trading price of a share of our stock on the grant date x 0.40) | | |
For example: If our stock price is $500 on the date of grant and the recipient allocated $2,000 per month of their allocatable compensation to stock options, the recipient would receive 10 stock options with an exercise price of $500. | | | | | | | | | $2000 | | = | | 2000 | | = | | 10 options with an exercise price of $500. | $500*0.40 | | 200 |
The stock price would need to rise to $700 (40% appreciation from $500) for the recipient to earn back the $2,000 of cash they traded for the options: $700 - $500 = $200 x 10 shares = $2,000 Anything below a 40% appreciation in the stock means that the employee would have been better off electing cash. We believe that this structure and the corresponding trade-off of current cash compensation for longer-term appreciation potential significantly aligns our employee interest with that of our stockholders. In 2020, each Named Executive Officer elected to allocate a portion of their cash compensation to our stock option program. Reed Hastings, our Co-Chief Executive Officer allocated 98% of his cash compensation toward our stock option program, Ted Sarandos, our Co-Chief Executive Officer allocated 39% of his cash compensation toward our stock option program, and the average election across our Named Executive Officers was 43%. Vested 10-year Stock Options. We grant fully vested 10-year stock options, which means that employees have 10 years from the date of grant to exercise their options. We believe a 10-year option life is important to encourage participation in the equity portion of our compensation program and reinforce a long-term focus. As the options must increase by 40% from the date of grant before they break even with the traded cash, as a practical matter, it takes time before it is worthwhile for an employee to exercise their vested options. We do not believe that vesting over a certain period of time and forced exercise upon termination creates a healthy environment or secures a high-performing workforce. We want our employees to stay at Netflix because they are
| passionate about their roles and want to help Netflix be successful in the long run, rather than merely waiting for their options to vest. |
DETERMINING EXECUTIVE COMPENSATION MAGNITUDE We aim to pay all employees at the top of their personal market. We believe this helps us attract and retain the most talented employees from around the globe. To establish the top of personal market for each of our Named Executive Officers, the Compensation Committee (A) reviews and considers the performance of each Named Executive Officer and (B) considers, for each Named Executive Officer, the estimated amount of compensation: i. | we would be willing to pay to retain that person; |
ii. | we would have to pay to replace the person; and |
iii. | the individual could otherwise command in the employment marketplace. |
Role of executive officers Each of our Co-Chief Executive Officers, in consultation with our Chief Talent Officer, reviews comparative data derived from publicly available market compensation information for each of the other Named Executive Officers. The Co-Chief Executive Officers then make a recommendation to the Compensation Committee regarding compensation for each other Named Executive Officer. The Compensation Committee reviews and discusses this information and the recommendation by the Co-Chief Executive Officers, and then determines a dollar-denominated amount available for allocation to salary and stock options for each such Named Executive Officer, as it deems appropriate. The Compensation Committee also approves the stock option allocation amount for each Named Executive Officer. Our Co-Chief Executive Officers’ compensation is determined by the Compensation Committee outside the presence of the Co-Chief Executive Officers. The Compensation Committee’s decision regarding compensation for the Co-Chief Executive Officers is based on the philosophy described above. It includes a review of comparative data, including the compensation paid by the companies in our compensation peer group to their chief executive officers and consideration of the accomplishments of the Co-Chief Executive Officers in developing the business strategy for the Company, the Company’s performance against this strategy, and the Co-Chief Executive Officers’ ability to attract and retain senior management. In establishing each Co-Chief Executive Officer’s compensation, the Compensation Committee is also mindful of the results of the Say-on-Pay vote for the prior year. Compensation for any given year is generally established at the end of the prior year. The 2020 compensation for our Named Executive Officers was determined at the end of 2019, and therefore, only Mr. Hastings, the sole Chief Executive Officer at the time, participated in the 2020 compensation determinations of the other Named Executive Officers as described above. Role of the compensation consultant In determining compensation for 2020, the Compensation Committee retained Compensia, Inc. (“Compensia”) a national compensation consulting firm to advise on executive and director compensation matters. Compensia provided various services to the Compensation Committee, including the review, analysis and update of our compensation peer group; the review and analysis of our Named Executive Officer compensation against competitive market data based on the companies in our compensation peer group; the review and analysis of our non-employee director compensation; advice on our equity plans and support on other ad hoc matters. | | | | | 44 | | | | |
Peer group and benchmarking The Compensation Committee works with Compensia in determining an appropriate peer group of companies each year. In changes from 2019, Microsoft and Lions Gate Entertainment were removed for size (too large and too small, respectively) and Facebook was added consistent with Netflix’s continued growth, to better align Netflix with the median revenue and market capitalization of the peer group, and to continue to prioritize media and consumer-facing companies. Twenty-first Century Fox was removed due to its acquisition by Walt Disney. The compensation peer group for 2020 was composed of the following companies: 2020 Netflix Peer Group | | | | | Activision Blizzard | | Facebook | | | Adobe Systems | | Intuit | | | Booking Holdings | | Oracle | | | CBS | | PayPal Holdings | | | Charter Communications | | salesforce.com | | | Comcast | | Sirius XM Holdings | | | Discovery Communications | | Viacom | | | DISH Network | | VMWare | | | eBay | | Walt Disney | | | Electronic Arts | | |
With respect to each of our Named Executive Officers, in determining compensation, the Compensation Committee considered our compensation philosophy as described above, comparative market data and specific factors relative to each Named Executive Officer’s responsibilities and performance. We do not specifically benchmark compensation for our Named Executive Officers in terms of picking a particular percentile relative to other individuals with similar titles at peer group companies. The Compensation Committee believes that many subjective factors unique to each Named Executive Officer’s responsibilities and performance are not adequately reflected or otherwise accounted for in a percentile-based compensation determination. ELEMENTS OF EXECUTIVE COMPENSATION We use only salary and stock options, augmented by very limited perquisites, to compensate our Named Executive Officers. Across the broader employee base, we also use salary and stock options as our key compensation components to remain competitive within the marketplace. Similarly situated companies typically offer employees an equity component as part of their overall compensation package and as such, we believe it is important to provide this opportunity to our employees, including our Named Executive Officers. By permitting employees to request a customized combination of salary and stock options, we endeavor to tailor individuals’ compensation to their personal compensation preferences and thereby offer a more compelling compensation package. Cash Compensation As described above, our compensation program offers our Named Executive Officers the opportunity to select the proportion of cash and equity compensation they receive each year. While our Named Executive Officers generally have elected to receive a significant portion of their compensation in equity, the remaining compensation is paid in cash in the form of salary.
Stock Options We believe that equity ownership, including stock and stock options, helps align the interest of our Named Executive Officers with those of our stockholders and links executive compensation to long-term company performance. Furthermore, because the stock options are granted at the fair market value of our common stock on the date of the option grant and are not generally transferable, they are only of value to the recipient if the market value of our common stock increases after the date of grant, thereby directly linking compensation in the form of stock options to Company performance. Making option grants on a monthly basis provides employees with a “dollar-cost averaging” approach to the price of their option grants. By granting options each month rather than on a less frequent basis, we believe it alleviates to a great extent the arbitrariness of option grant timing and the potential negative employee issues associated with “underwater” options. Stock options are vested upon grant and can be exercised for up to ten years following grant regardless of employment status. We believe that the ten-year life of the options enhances their value for each employee and thereby encourages equity ownership in the Company, which is helpful in aligning employee and stockholder interests. We do not believe that staggered vesting of stock options or expiration of options closely following employment termination has a desirable impact on employee retention. Rather, we believe that creating and maintaining a high-performance culture and providing highly competitive compensation packages are the critical components for retaining employees, including our Named Executive Officers. Empirically, stock options have proven to be an effective way of creating long-term alignment between executives and stockholders. Even though the options are vested upon grant, our Named Executive Officers often do not exercise their options for an extended period of time. Other Components of Compensation In 2020, each Named Executive Officer, like all our full-time employees, was eligible to receive an additional $15,000 in annual compensation that may be used to defray the cost of health care benefits previously paid by us. This amount was increased to $16,000 for 2021. Any portion of this allowance not utilized toward the cost of health care benefits will be paid as salary, up to a maximum of $5,000. In addition to base salary and stock options, certain eligible U.S. employees, including our Named Executive Officers, have the opportunity to participate in our 401(k) matching program which enables them to receive a dollar-for-dollar Company match of up to 4% of his or her compensation to the 401(k) fund, subject to limitations under applicable law. Messrs. Neumann, Sarandos, and Hyman all participated in this program in 2020 and therefore we matched their 401(k) contributions as shown in the compensation tables of this Proxy Statement. We also maintain a group term life insurance policy for all full-time employees, including our Named Executive Officers. We permit our Named Executive Officers and their family members and guests to use our corporate aircraft for personal use and consider amounts related to such travel to be a perquisite. Additionally, our Named Executive Officers are permitted to use a company-provided car service under certain circumstances. We also pay for residential security measures and services for certain Named Executive Officers when deemed necessary. All of these perquisites are reflected in the “All Other Compensation” column of the Summary Compensation Table. | | | | | 46 | | | | |
EXECUTIVE COMPENSATION IN 2020 Each year, we allow our Named Executive Officers to allocate their compensation between cash and stock options. Our Named Executive Officers continue to express their confidence in the Company and our growth strategy by electing to receive a substantial percentage of their compensation through at-risk stock option awards. These elections are made prior to the compensation year and are irrevocable. For 2020, the following elections were made by our Named Executive Officers: | | | | | | | | | | | | | | | | Named Executive Officer | | Allocatable Compensation ($)(1) | | Amount of Allocatable Compensation Elected to be received as Stock Options (%)(1) | | Amount of Allocatable Compensation Elected to be received as Cash Salary (%) | | | | | Reed Hastings, Co-Chief Executive Officer, President, Chairman of the Board | | | | 33,000,000 | | | | | 98.0 | | | | | 2.0 | | | | | | Ted Sarandos, Co-Chief Executive Officer and Chief Content Officer | | | | 33,000,000 | | | | | 39.4 | | | | | 60.6 | | | | | | Spencer Neumann, Chief Financial Officer | | | | 11,000,000 | | | | | 45.0 | | | | | 55.0 | | | | | | Greg Peters, Chief Operating Officer and Chief Product Officer | | | | 18,000,000 | | | | | 33.3 | | | | | 66.7 | | | | | | David Hyman, Chief Legal Officer | | | | 9,000,000 | | | | | 38.9 | | | | | 61.1 | | | | | | Rachel Whetstone, Chief Communications Officer | | | | 5,000,000 | | | | | 4.0 | | | | | 96.0 | |
(1) | Excludes the minimum annual stock option allowance. |
We also provided a minimum annual stock option allowance (generally equal to 5% of the Named Executive Officer’s allocatable compensation) in 2020, which is added to the amount allocated to stock options by the Named Executive Officer to arrive at the total annual stock option allocation. While the total annual stock option allocation is expressed in a dollar denomination, we use the total annual stock option allocation only to calculate the number of stock options to be granted. The total annual stock option allocation is not available to the employees as cash compensation, except where an employee who has allocated a portion of their compensation toward stock options receives severance payments and as otherwise set forth in our Amended and Restated Executive Severance and Retention Incentive Plan (the “Severance Plan”). The compensation of our Named Executive Officers for 2020 was determined in 2019, prior to the global onset of the COVID-19 pandemic. In determining compensation for our Named Executive Officers for 2020, in consultation with Compensia, the Compensation Committee considered the philosophy described above, including comparative market data. In addition, the following factors were considered for each Named Executive Officer: • | | for Mr. Hastings, the Compensation Committee considered his accomplishments in continuing to develop and evolve the business strategy for the Company, the performance of the Company relative to this strategy and his ability to attract and retain senior management, and increased his allocatable compensation from $30,000,000 to $33,000,000 for 2020. |
• | | for Mr. Sarandos, consideration was given to his global stature as a leading media executive and his role in obtaining globally relevant content for the Company’s international expansion, his significant contributions to the Company’s original content strategy, the buildout of the infrastructure to support that strategy, and the market demand for high-level content programming talent. Mr. Sarandos’ allocatable compensation was increased from $30,000,000 to $33,000,000 for 2020. Mr. Sarandos’s allocatable compensation was not increased when he was promoted to Co-Chief Executive Officer in July 2020 and he also continues to retain his role as Chief Content Officer. |
• | | for Mr. Neumann, consideration was given to his experience in leading a financial organization in the media industry, as well as the increasing complexity of our financial reporting as we engage in original productions around the globe. Mr. Neumann’s allocatable compensation was increased from $9,524,000 to $11,000,000 for 2020. |
• | | for Mr. Peters, consideration was given to his performance in developing and deploying our increasingly complex engineering systems to support our continued expansion into new jurisdictions and languages and new product offerings to enhance user experience, as well as the continued market demand for engineering talent. His allocatable compensation was increased from $16,000,000 to $18,000,000 for 2020. Mr. Peters’ allocatable compensation was not increased when he was promoted to Chief Operating Officer in July 2020 and he also continues to retain his role as Chief Product Officer. |
• | | for Mr. Hyman, consideration was given to his performance in managing and developing a global legal and public policy function, and his allocatable compensation was increased from $7,000,000 to $9,000,000 for 2020. |
• | | for Ms. Whetstone, consideration was given to her deep knowledge and international experience in leading global communications, as we expand our original content around the globe. Her allocatable compensation was increased from $3,500,000 to $5,000,000 for 2020. |
Individual employee performance, including that of our Named Executive Officers, is also evaluated on an ongoing basis. To the extent such performance exceeds or falls short of the Company’sour performance values, the Companywe may take action that includes, in the case of star performers, promotions or increases in compensation or, in the case of under performers, demotion, a reduction in compensation or termination. ElementsAfter considering the above, in 2020, the compensation components for our Named Executive Officers were as follows. Please see the Summary Compensation Table provided in this Proxy Statement for a complete description of the compensation of our Named Executive CompensationOfficers:
| | | | | | | | | | | Name and Position | | 2020 Total Annual Stock Option Allocation, with 1/12 granted monthly ($)(1) | | 2020 Annual Cash Salary ($) | | | | Reed Hastings, Co-Chief Executive Officer, President, and Chairman of the Board | | | | 34,000,000 | | | | | 650,000 | | | | | Ted Sarandos, Co-Chief Executive Officer and Chief Content Officer | | | | 14,650,000 | | | | | 20,000,000 | | | | | Spencer Neumann, Chief Financial Officer | | | | 5,500,000 | | | | | 6,050,000 | | | | | Greg Peters, Chief Operating Officer and Chief Product Officer | | | | 6,900,000 | | | | | 12,000,000 | | | | | David Hyman, Chief Legal Officer | | | | 3,950,000 | | | | | 5,500,000 | | | | | Rachel Whetstone, Chief Communications Officer | | | | 450,000 | | | | | 4,800,000 | |
In 2017, after
(1) | The dollar amounts set forth in this column are different than the amounts in the “Option Awards” column of the Summary Compensation Table because the amounts in this column are reflective of the total compensation amount attributable to stock option grants, rather than the accounting valuation which is reflected in the Summary Compensation Table. Includes the annual stock option allowance of 5% of allocatable compensation. |
Method for determining the allocatable compensation for each Named Executive Officer by the method described above, such amount for each individual was divided into the three key components of salary, stock options and performance-based target bonuses. This allocation was made pursuant to the compensation preferences of each Named Executive Officer, who allocated compensation between cash and stock options; provided however, that the salary component for each Named Executive Officer could not exceed $1 million, except for Mr. Wells who was excluded from the applicable IRS regulations such that the $1 million ceiling on salary did not apply to him. Any amount in cash above $1 million that was not otherwise allocated by a Named Executive Officer to stock options was allocated to a target performance bonus pursuant to the performance-based bonus program (discussed below). The amount allocated to salary was considered cash compensation and paid through payroll during 2017 on abi-weekly basis. The performance-based bonus program was discontinued for 2018. The amount allocated to stock options is referred to as themonthly stock option allocation. Starting in 2015, the Company also provides a minimum annual stock option allowance (equal to 5% of the Named Executive Officer’s allocatable compensation) which is added to the amount allocated to stock options by the Named Executive Officer in the manner described above. While the stock option allocation is
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expressed in a dollar denomination, the stock option allocation is used by the Company only to calculate the number of stock options to be granted in the manner described below. The stock option allocation is not available to the employees as cash compensation, except where an employee who has allocated a portion of their compensation towards stock options receives severance payments and as otherwise set forth in the Executive Severance and Retention Incentive Plan described below.grants
After the total annual stock option allocation is established, theour Named Executive Officers receive monthly option grants pursuant to our monthly stock option program, which is applicable to the Company’s monthly option grant program.majority of our employees. Under this program, theeligible employees, including our Named Executive Officers, receive on the first trading day of the month fully vested options granted at fair market value as reflected by the closing price of our stock on the date of the option grant. The number of stock options to be granted monthly will fluctuatefluctuates based on the fair market valueclosing price of our stock on the date of the option grant. The In 2020, the actual number of options granted to theour Named Executive Officers each month was determined by the following formula: the monthly dollar(The amount of thean employee’s total annual stock option allocationallocation/12) / ([fair market valuethe closing price of our stock on the date of option grant] *x 0.40). | | | | | 48 | | | | |
For stock option accounting purposes, the dollar valuevalues of stock options granted by the Company, as reflected in the Summary Executive Compensation table,Table, below, are appreciably higherdifferent than the dollar valuevalues of the total annual stock option allocation in the table above. The difference arises as the stock option allocation (please compare “Summary Executive Compensation” table provided in this Proxy Statement with the table below). Furthermore, because the stock options are granted at fair market value on the date of the option grant and are not generally transferable, they are only of value to the recipient through an increase in the market value of the Company’s common stock, thereby linking that element of compensation to Company performance. As shown in the table below,above is the Company’samount used to determine the number of options granted, whereas the dollar values of stock option grants in the Summary Compensation Table reflects their grant date fair value under the accounting rules.
Named Executive Officer Compensation for 2021 Compensation for our Named Executive Officers electedfor 2021 remained flat as compared to receive a significant portion of their compensation in the form of stock options. The Company believes that equity ownership, including stock and stock options, helps align the interest of the2020. Our Named Executive Officers with those ofcontinued to execute our strategies and deliver strong performance throughout 2020 amidst the Company’s stockholderscontinuously evolving and is a good mechanismchallenging environment. Nonetheless, given the COVID-19 pandemic and related economic challenges, the Compensation Committee determined not to linkmake any changes to executive compensation to long-term company performance. 41
In 2016 and 2017, thefor 2021. Allocatable compensation components for the Named Executive Officers were allocated as follows (please see the “Summary Executive Compensation” table provided in this Proxy Statement for a complete description of the compensation of theour Named Executive Officers in 2016 and 2017):
| | | | | | | | | | | | | | | | | Name and Position | | 2016 Annual Salary | | | 2016 Annual StockOption Allocation | | | 2016 Monthly StockOption Allocation | | | 2016 Estimated Target Bonus | | Reed Hastings | | | | | | | | | | | | | | | | | Chief Executive Officer and Chairman of the Board | | $ | 900,000 | | | $ | 19,050,000 | | | $ | 1,587,500 | | | $ | — | | Greg Peters | | | | | | | | | | | | | | | | | Chief Product Officer | | | 1,000,000 | | | | 3,275,000 | | | | 272,917 | | | | 1,500,000 | | Ted Sarandos | | | | | | | | | | | | | | | | | Chief Content Officer | | | 1,000,000 | | | | 11,800,000 | | | | 983,333 | | | | 4,000,000 | | David Wells | | | | | | | | | | | | | | | | | Chief Financial Officer | | | 2,400,000 | | | | 1,800,000 | | | | 150,000 | | | | — | | Neil Hunt | | | | | | | | | | | | | | | | | former Chief Product Officer | | | 1,000,000 | | | | 2,150,000 | | | | 179,167 | | | | 5,250,000 | |
| | | | | | | | | | | | | | | | | Name and Position | | 2017 Annual Salary | | | 2017 Annual StockOption Allocation | | | 2017 Monthly Stock Option Allocation | | | 2017 Estimated Target Bonus | | Reed Hastings | | | | | | | | | | | | | | | | | Chief Executive Officer and Chairman of the Board | | $ | 850,000 | | | $ | 21,200,000 | | | $ | 1,766,667 | | | $ | — | | David Hyman | | | | | | | | | | | | | | | | | General Counsel (allocation effective Jan 1, 2017, annualized) | | | 3,300,000 | | | | 1,215,000 | | | | 101,250 | | | | — | | David Hyman | | | | | | | | | | | | | | | | | (modified allocation effective July 1, 2017, annualized) | | | 100,000 | | | | 1,215,000 | | | | 101,250 | | | | 3,200,000 | | Greg Peters | | | | | | | | | | | | | | | | | Chief Product Officer (allocation effective Jan 1, 2017, annualized) | | | 1,000,000 | | | | 3,275,000 | | | | 272,917 | | | | 1,500,000 | | Greg Peters | | | | | | | | | | | | | | | | | (modified allocation effective July 1, 2017, annualized) | | | 1,000,000 | | | | 3,400,000 | | | | 283,333 | | | | 4,000,000 | | Ted Sarandos | | | | | | | | | | | | | | | | | Chief Content Officer | | | 1,000,000 | | | | 11,000,000 | | | | 916,667 | | | | 9,000,000 | | David Wells | | | | | | | | | | | | | | | | | Chief Financial Officer | | | 2,500,000 | | | | 1,910,000 | | | | 159,167 | | | | — | | Neil Hunt | | | | | | | | | | | | | | | | | former Chief Product Officer | | | 1,000,000 | | | | 2,410,000 | | | | 200,833 | | | | 5,200,000 | |
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As reflected in the above table, Mr. Peters received an increase in compensation upon becoming Chief Product Officer. Further, in connection with his departure from Netflix, Mr. Hunt entered into Netflix’s standard form of release agreement with Netflix which included customary confidentiality and release provisions and received a lump sum cash payment equal to $6,457,500.
As described above, the Committee determined that the maximum annual salary payable to any Named Executive Officer (excluding Mr. Wells) for 2017 would be $1 million, with the exception of Mr. Hyman who had received over $1 million in salary at the time he was first included in the performance-bonus program in July 2017. Any portion of a Named Executive Officer’s compensation over $1 million that was not allocated to stock options was allocated to a target bonus to the Named Executive Officer pursuant to our Performance Bonus Plan (the “Plan”), which was approved by stockholders at our 2014 Annual Meeting. The Plan is intended to permit the Company to seek a full federal tax deduction for compensation paid under the Plan, compensation that otherwise might not have been fully tax deductible to the Company if paid as salary. However the portion of salary received by Mr. Hyman above $1 million was not deductible pursuant to IRS regulations. At the time of Mr. Hunt’s departure, it2021 was determined that Mr. Hyman would likely be a Named Executive Officer for 2017 and was added to the performance bonus-program, and the majority of the Mr. Hyman’s remaining 2017 cash compensation was thereafter allocated to the target performance bonus component.
Under the Plan, bonuses were paid only if the performance goals set by the Committee at the beginning of the applicable performance period were achieved. The actual awards (if any) payable for any performance period varied depending on the extent to which actual performance met, exceeded or fell short of the goals approved by the Committee. The Compensation Committee has the discretion to determine whether a bonus will be paid in the event an executive terminates employment before the bonus is scheduled to be paid. In addition, the Compensation Committee has discretion to decrease (but not increase) the bonuses that otherwise would be paid under the Bonus Plan based on actual performance versus the specified goals. In 2017, the Committee approved Mr. Hunt’s receipt of Q2 2017 bonus under the Performance Bonus Plan although he left the Company on June 23, 2017.
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consultation with Compensia. For 2017, the Compensation Committee approved four performance periods under the Plan. Each performance period was comprised of one of our fiscal quarters so that, in effect, one performance period always was in effect during 2017. For each performance period, the Committee chose a target bonus for each participant and a goal for the Company’s global streaming revenue for that quarter, as calculated under generally accepted accounting principles and reflected in our publicly-available financial statements. The Committee chose this goal because global streaming revenue is an important metric demonstrating growth of the Company. Under the bonus formula approved by the Committee, the actual bonus earned (if any) would correspond to the percentage of the goal achieved, provided that no bonus would be payable for less than 80% achievement of the goal and the maximum bonus payable would be 120% of the target bonus, even if performance was greater than 120% of the goal. The below table shows the performance goals, the level of achievement of the goals, and the percentage of target bonuses earned for each of the four quarterly performance periods. | | | | | | | | | | | | | | | | | Performance Goals by Quarter | | Q1 | | | Q2 | | | Q3 | | | Q4 | | Goal for Global Streaming Revenue (in thousands) | | $ | 2,516,000 | | | $ | 2,640,000 | | | $ | 2,859,000 | | | $ | 3,169,000 | | Actual Global Streaming Revenue (in thousands) | | | 2,516,000 | | | | 2,671,000 | | | | 2,875,000 | | | | 3,181,000 | | | | | | | % of Goal Achieved | | | 100 | % | | | 101 | % | | | 101 | % | | | 100 | % | | | | | | % of Target Bonus Earned | | | 100 | % | | | 101 | % | | | 101 | % | | | 100 | % |
Based on the above, the following bonuses were paid in 2017:
| | | | | | | | | | | | | | | | | | | | | Name | | Q1 | | | Q2 | | | Q3 | | | Q4 | | | 2017 | | David Hyman | | | | | | | | | | | | | | | | | | | | | Target Bonus | | $ | — | | | $ | — | | | $ | 800,000 | | | $ | 800,000 | | | $ | 1,600,000 | | Actual Bonus | | | — | | | | — | | | | 808,000 | | | | 800,000 | | | | 1,608,000 | | Greg Peters | | | | | | | | | | | | | | | | | | | | | Target Bonus | | | 375,000 | | | | 375,000 | | | | 1,000,000 | | | | 1,000,000 | | | | 2,750,000 | | Actual Bonus | | | 375,000 | | | | 378,750 | | | | 1,010,000 | | | | 1,000,000 | | | | 2,763,750 | | Ted Sarandos | | | | | | | | | | | | | | | | | | | | | Target Bonus | | | 2,250,000 | | | | 2,250,000 | | | | 2,250,000 | | | | 2,250,000 | | | | 9,000,000 | | Actual Bonus | | | 2,250,000 | | | | 2,272,500 | | | | 2,272,500 | | | | 2,250,000 | | | | 9,045,000 | | Neil Hunt | | | | | | | | | | | | | | | | | | | | | Target Bonus | | | 1,300,000 | | | | 1,300,000 | | | | | | | | | | | | 2,600,000 | | Actual Bonus | | | 1,300,000 | | | | 1,313,000 | | | | | | | | | | | | 2,613,000 | |
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In 2018, the Company will not offer performance-based bonuses and all cash compensation will be paid as salary. The compensation components for the persons expected to be Named Executive Officers for the fiscal year ending December 31, 20182021, the compensation components for our Named Executive Officers serving in 2021 are being allocated as follows, based on the allocation methodmethods described above:above. Beginning in 2021, in an effort to maximize flexibility and personal choice for our employees, the minimum annual stock option allowance (generally based upon 5% of total allocatable compensation) has been eliminated for most employees and the value has been added to the employees’ total allocatable compensation.
| | | | | | | | | | | | | Name and Position | | 2018 Annual Salary | | | 2018 Annual Stock Option Allocation | | | 2018 Monthly Stock Option Allocation | | Reed Hastings Chief Executive Officer and Chairman of the Board | | $ | 700,000 | | | $ | 28,700,000 | | | $ | 2,391,667 | | David Hyman General Counsel | | | 2,500,000 | | | | 3,275,000 | | | | 272,917 | | Greg Peters Chief Product Officer | | | 6,000,000 | | | | 6,600,000 | | | | 550,000 | | Ted Sarandos Chief Content Officer | | | 12,000,000 | | | | 14,250,000 | | | | 1,187,500 | | David Wells Chief Financial Officer | | | 2,800,000 | | | | 2,450,000 | | | | 204,167 | |
| | | | | | | | | | | | | | | | | | | | | Name and Position | | 2021 Annual Stock Option Allocation ($) | | 2021 Annual Stock Option Allocation as percentage of Allocatable Compensation (%) | | 2021 Annual Salary ($) | | 2021 Annual Salary as Percentage of Allocatable Compensation (%) | | | | | | Reed Hastings, Co-Chief Executive Officer, President, and Chairman of the Board | | | | 34,000,000 | | | | | 98.1 | | | | | 650,000 | | | | | 1.9 | | | | | | | Ted Sarandos, Co-Chief Executive Officer and Chief Content Officer | | | | 14,650,000 | | | | | 42.3 | | | | | 20,000,000 | | | | | 57.7 | | | | | | | Spencer Neumann, Chief Financial Officer | | | | 5,550,000 | | | | | 48.1 | | | | | 6,000,000 | | | | | 51.9 | | | | | | | Greg Peters, Chief Operating Officer and Chief Product Officer | | | | 6,900,000 | | | | | 36.5 | | | | | 12,000,000 | | | | | 63.5 | | | | | | | David Hyman, Chief Legal Officer | | | | 4,725,000 | | | | | 50.0 | | | | | 4,725,000 | | | | | 50.0 | | | | | | | Rachel Whetstone, Chief Communications Officer | | | | 500,000 | | | | | 9.5 | | | | | 4,750,000 | | | | | 90.5 | |
Vested stock options granted on or after January 1, 2007 can be exercised up to ten (10) years following grant regardless of employment status. The Company believes that this increase in the life of the options enhances the value of such options for each employee and thereby encourages equity ownership in the Company, which is helpful in aligning the interests of employees with that of the Company. The Company does not believe that staggered vesting of stock options or early expiration of options following termination has a material impact on retention. The Company believes that creating a high-performance culture and providing highly competitive compensation packages are the critical components for retaining employees, including its Named Executive Officers.TERMINATION-BASED COMPENSATION AND CHANGE IN CONTROL RETENTION INCENTIVES
Across the broader employee base, the Company utilizes salary and stock options as its key compensation components in order to be competitive within the marketplace. Similarly situated companies typically offer employees an equity component as part of their overall compensation and as such, the Company believes it is important to provide this opportunity to its employees, including the Named Executive Officers. By permitting employees to request a customized combination of salary and stock options, the Company believes it is better able to take into consideration personal compensation preferences and thereby offer a more compelling compensation package. In addition, offering grants monthly provides employees with a “dollar-cost averaging” approach to the price of their option grants. Option grants made on an infrequent basis are more susceptible to the whims of market timing and fluctuations. By granting options each month, the Company believes it alleviates to a great extent the arbitrariness of option timing and the potential negative employee issues associated with “underwater” options.
Each Named Executive Officer, like all of the Company’s employees, is eligible to receive an additional $15,000 in annual compensation not reflected above that may be used to defray the cost of health care benefits previously paid by the Company. Any portion of this allowance not utilized toward the cost of health care benefits will be paid as salary, up to a maximum of $5,000.
In addition to salary and stock options, all exempt employees, including Named Executive Officers, also have the opportunity to participate in the Company’s 401(k) matching program which enables them to receive adollar-for-dollar Company match of up to 3% of his or her compensation to the 401(k)
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fund. Mr. Hunt, Mr. Hyman, Mr. Sarandos and Mr. Wells all participated in this program in 2017 and therefore the Company matched the 401(k) contributions as shown in the tables of this Proxy Statement.
The Company also maintains a group term life insurance policy for all full-time employees.
Termination-Based Compensation and Change in Control Retention Incentives
TheOur Named Executive Officers are beneficiaries of the Company’s Amended and Restated Executiveour Severance and Retention Incentive Plan (“Severance Plan”).Plan. Under this Severance Plan, each employee of the Company at the level of Vice President or higher (“Covered Executive”) is entitled to a severance benefit upon termination of employment (other than for cause, death or permanent disability) so long as he or she signs a waiver and release of claims and an agreement not to disparage the Company, its directors or its officers in a form reasonably satisfactory to the Company. The
During 2020, the severance benefit consistsconsisted of a lump sum cash payment equal to nine (9) months of allocatable compensation, or, for newly hired Covered Executives only, a cash payment equal to 24 months of allocatable compensation, which is reduced by an amount equal to one (1) month of allocatable compensation for each month of tenure at the Company for the first 15 months of continuous employment following hire by the Company, such that the minimum benefit for such newly hired Covered Executives is the cash equivalent of nine (9)months of allocatable compensation. In order to remain competitive in attracting top talent, the severance benefit was increased in April 2021 such that newly hired Covered Executives are eligible to receive a severance benefit of up to 36 months of allocatable compensation, which is reduced by an amount equal to one month of allocatable compensation for each
month of tenure at the Company for the first 27 months of continuous employment following hire by the Company, such that the minimum benefit for such newly hired Covered Executives is the cash equivalent of nine months of allocatable compensation. The right to receive a severance benefit terminates upon a change in control transaction, so that the Covered Executives under the Severance Plan are not entitled to both a change in control benefit as well as a severance benefit. In lieu of the severance benefit described above, the Severance Plan provides that employees covered by the Severance Plan who are employed by the Company on the date of a change in control transaction are entitled to receive a lump sum cash payment equal to twelve (12)12 months of allocatable compensation regardless of whether their employment terminates. The CompanyWe also maintainsmaintain a plan for itsour director level employees (the “Director Plan”) that provides those employees who are employed by the Company on the date of a change in control transaction with a lump sum cash payment equal to six (6) months of allocatable compensation, regardless of whether their employment terminates. While director level employees are not guaranteed any severance upon termination of employment, to the extent any severance is provided to a director level employee, payment associated with the change in control will be in lieu of or otherwise offset against any such severance payment.
TheWe have a “single trigger” change in control plan for our executive officers. Given our monthly grants of fully vested options, a change in control does not trigger acceleration of unvested shares, which is a typical concern about single triggers. We use a single trigger change in control plan because we believe that double trigger plans, which require the occurrence of both a change in control and the executive’s termination of service from the Company believes that it is appropriatefor an executive to make such payment uponreceive severance, create a misaligned incentive for executives to attempt to be terminated from the single-triggerCompany in the event of a change in control in ordercontrol. We would rather encourage our executives to reduce distractions associated with the uncertainty surrounding change in control transactions andcontinue to reduce potential conflicts that might otherwise arise when a Company executive must relyfocus on the decisionslong-term success of the acquiring company for either continued employment or severance.Company instead of their individual severance opportunities.
The benefits owing under the Severance Plan or Director Plan are to be paid to an individual covered under the applicable plan by the Company as soon as administratively practicable following the completion of all conditions to the payment, but in no event more than two and one half months following the date of the triggering event. The Company believesWe believe that benefits under the Company’s Amended and Restated Executive Severance and Retention Incentive Plan are consistent with similar 46
benefits offered to executive officers of similarly situated companies and moreover, the Severance Plan is an important element in advancing the Company’s overall compensation philosophy ofmechanism for attracting and retaining outstanding performers. Each of the terms “allocatable compensation,” “cause” and “change in control” are defined in the plan,Severance Plan, a copy of which is attached as Exhibit 10.1410.1 to the Company’s Form10-Q filed on July 19, 2017.April 22, 2021. Tax Considerations
TAX CONSIDERATIONS Section 162(m) of the Internal Revenue Code (“Section 162(m)”) was among the provisions that were amended pursuant to tax reform legislation thatThe Tax Cuts and Jobs Act (the “Tax Act”), which was signed into law inon December 22, 2017. The prior version of sectionSection 162(m) generally disallowed a tax deduction for compensation that we paid to our Chief Executive Officer or any of the next three most highly compensated executive officers (excluding the Chief Financial Officer) to the extent that the compensation for any such individual exceeded $1 million in any taxable year. However, this deduction limitation did not apply to compensation that was “performance-based” under Section 162(m). The Company’s stock options grants were intended to qualify as performance-based under Section 162(m). Similarly, bonuses earned and paid under the Performance Bonus Plan were intended to qualify as performance-based. Amounts paid as salary did not qualify as performance-based. In establishing compensation for 2017, the Compensation Committee considered the potential impact of the prior version of Section 162(m) on executive officer compensation. For this reason, the Committee chose to cap each Named Executive Officer’s salary (other than the Chief Financial Officer) at $1 million for 2017, with the exception of Mr. Hyman who had received over $1 million in salary at the time he first became included in the performance-bonus program. The Tax Cuts and Jobs Act (the “Tax Act”), which became law on December 22, 2017, amended Section 162(m) to eliminate the deductibility ofexception for performance-based compensation. As a result, effective for our 2018 fiscal year and thereafter, the maximum U.S. federal income tax deduction that we may receive for annual compensation overpaid to any officer covered by Section 162(m) is $1 million butper officer, subject to a transition rule that is described below. | | | | | 50 | | | | |
The Tax Act also expanded the individuals covered by Section 162(m) to include our Chief Financial Officer and certain of our former officers. Separately, the Tax Act included a transition rule with respect to compensation that is provided pursuant to a written binding contract in effect on November 2, 2017 and not materially modified after that date. In addition, the 2017 amendments also made the Chief Financial Officer subject to section 162(m). The Company will continueWe continued to grant stock options in 2018,2020, although the compensation income recognized upon exercise of such grants by individuals covered by Section 162(m) will not be deductible by us to the extent the total compensation for each officer subject to the rules of Section 162(m)such individual exceeds $1 million in the year in which the stock options are exercised. Pursuant toOn December 30, 2020, the transition rule, stock option grants that were granted prior to 2018 will generally still be eligible for the prior rules underInternal Revenue Service published final Section 162(m) and will be deductible as performance-based compensation. regulations that generally implement amendments made to Section 162(m) by the Tax Act. The Compensation Committee considers the tax impact of the Company’s compensation programs,program, and will generally seek to preserve the deductibility of any performance-based compensation that is subject to the transition rule of the Tax Act, to the extent practicable and in the best interests of the Company and its stockholders. The Committee’s Consideration of the 2017 Nonbinding Advisory Vote to Approve However, the Compensation Committee reserves the right to pay compensation that is not tax deductible.
PROHIBITION ON HEDGING Our Insider Trading Policy, which was updated in March 2020, prohibits our section 16 officers and directors from engaging in any transactions involving any hedging or derivatives of Company equity securities, including trading in futures and derivative securities and engaging in hedging activities relating to our securities (including forward sales contracts, equity swaps, collars, puts, calls, exchange traded options and exchange funds), or otherwise engaging in transactions that are designed to hedge or offset decreases in the market value of our Named Executive Officersequity securities, provided that it does not limit director and officer participation in our stock option program. This prohibition applies only to transactions initiated on or after March 4, 2020 and applies to Company equity securities that are (i) granted to the section 16 officer or director by the Company as part of their compensation or (ii) held, directly or indirectly, by the section 16 officer or the director. CLAWBACK OF PERFORMANCE-BASED AWARDS In 2017, 95.5%While we do not currently use performance-based awards, the Netflix, Inc. 2020 Stock Plan allows us to recover certain performance-based equity awards or amounts paid in respect of such awards in the shares voted approvedevent of certain acts of misconduct by award recipients. Such misconduct generally relates to contributing to or failing to take reasonable steps to prevent an accounting restatement due to material noncompliance with financial reporting requirements.
COMPENSATION RISK Our compensation policies for non-executive salaried employees are the compensation ofsame as those outlined for our Named Executive Officers. AtGiven the timedesign of our compensation structure, as detailed in the foregoing Compensation Discussion and Analysis, we do not believe that our compensation policies and practices are reasonably likely to have a material adverse effect on the Company. CODE OF ETHICS We have adopted a Code of Ethics for our directors, officers and other employees. A copy of the 2017 vote, the Committee had already approved the design and goalsCode of Ethics is available on our executive compensation program for 2017. The Committee reviewed these voting results, which affirmed supportInvestor Relations website at https://ir.netflix.net/governance/governance-docs/default.aspx. Any waivers of the Company’s approach to executive compensation.Code of Ethics will be posted at that website. 47
COMPENSATION COMMITTEE REPORTCompensation Committee
Report The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on the review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and the Company’s Annual Report on Form10-K for the year ended December 31, 2017.2020. Compensation Committee of the Board of Directors Rodolphe Belmer Mathias Döpfner Timothy M. Haley Jay C. Hoag
A. George (Skip) Battle
Anne Sweeney 48
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COMPENSATION OF EXECUTIVE OFFICERS AND OTHER MATTERS
SUMMARY COMPENSATION OF EXECUTIVE OFFICERS AND OTHER MATTERS Summary Executive Compensation
TABLE The following summary executive compensation tableSummary Compensation Table sets forth information concerning the compensation paid byto our Named Executive Officers in 2020, 2019 and 2018, other than Mr. Neumann who joined the Company to: (i) the Chiefin 2019 and Ms. Whetstone who was not a Named Executive Officer (the Company’s principal executive officer), (ii) the Chief Financial Officer (the Company’s principal financial officer), and (iii) the Company’s other named executive officers listed below.in 2018 or 2019. A description of the method for determining the amount of salary in proportion to total compensation is set forth above in “Compensation Discussion and Analysis.” | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | | | | Year | | | Salary ($) | | | Option Awards ($) (1) | | | Non-Equity Incentive Plan Compensation ($) (2) | | | All Other Compensation ($) | | | Total ($) | | Reed Hastings | | | | | | | 2017 | | | $ | 850,000 | | | $ | 23,527,499 | | | $ | — | | | $ | — | | | $ | 24,377,499 | | Chief Executive Officer, President, Chairman of the Board | | | | | | | 2016 | | | | 900,000 | | | | 22,277,733 | | | | — | | | | — | | | | 23,177,733 | | | | | | | | 2015 | | | | 1,115,385 | | | | 15,496,797 | | | | — | | | | — | | | | 16,612,182 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Neil Hunt | | | | | | | 2017 | | | | 576,923 | | | | 1,315,595 | | | | 2,613,000 | | | | 6,465,600 (3) | | | | 10,971,118 | | former Chief Product Officer | | | | | | | 2016 | | | | 1,000,000 | | | | 2,549,204 | | | | 5,250,000 | | | | 7,950(4) | | | | 8,807,154 | | | | | | | | | 2015 | | | | 1,067,308 | | | | 2,368,693 | | | | 4,987,500 | | | | 7,950(5) | | | | 8,431,451 | | David Hyman(6) | | | | | | | 2017 | | | | 1,761,538 | | | | 1,435,074 | | | | 1,608,000 | | | | 309,027(7) | | | | 5,113,639 | | General Counsel | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Greg Peters | | | | | | | 2017 | | | | 1,000,000 | | | | 3,725,022 | | | | 2,763,750 | | | | 1,748,718(8) | | | | 9,237,490 | | Chief Product Officer | | | | | | | 2016 | | | | 1,000,000 | | | | 3,869,152 | | | | 1,500,000 | | | | 1,660,135(9) | | | | 8,029,287 | | | | | | | | | 2015 | | | | 1,038,462 | | | | 3,156,900 | | | | 997,500 | | | | 414,087(10) | | | | 5,606,949 | | Ted Sarandos | | | | | | | 2017 | | | | 1,000,000 | | | | 12,389,532 | | | | 9,045,000 | | | | 8,100(11) | | | | 22,442,632 | | Chief Content Officer | | | | | | | 2016 | | | | 1,000,000 | | | | 13,917,568 | | | | 4,000,000 | | | | 5,538(12) | | | | 18,923,106 | | | | | | | | | 2015 | | | | 1,107,692 | | | | 10,877,040 | | | | 1,995,000 | | | | 6,038(13) | | | | 13,985,770 | | David Wells | | | | | | | 2017 | | | | 2,500,000 | | | | 2,127,673 | | | | — | | | | 553,641(14) | | | | 5,181,314 | | Chief Financial Officer | | | | | | | 2016 | | | | 2,400,000 | | | | 2,145,314 | | | | — | | | | 1,549,136 (15) | | | | 6,094,450 | | | | | | | | | 2015 | | | | 2,036,539 | | | | 1,928,575 | | | | — | | | | 198,300(16) | | | | 4,163,414 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Name and Principal Position | | Year | | Salary ($) | | Bonus ($) | | Option Awards ($)(1) | | All Other Compensation ($)(2) | | Total ($) | | | | | | | | Reed Hastings Co-Chief Executive Officer, President, and Chairman of the Board | | | | 2020 | | | | | 650,000 | | | | | | | | | | 42,428,878 | | | | | 147,146 | (3) | | | | 43,226,024 | | | | | 2019 | | | | | 700,000 | | | | | | | | | | 37,411,492 | | | | | 465,637 | (3) | | | | 38,577,129 | | | | | 2018 | | | | | 700,000 | | | | | | | | | | 35,380,417 | | | | | — | | | | | 36,080,417 | | | | | | | | | Ted Sarandos Co-Chief Executive Officer and Chief Content Officer | | | | 2020 | | | | | 20,000,000 | | | | | | | | | | 18,304,124 | | | | | 1,014,127 | (4) | | | | 39,318,251 | | | | | 2019 | | | | | 18,000,000 | | | | | | | | | | 16,575,902 | | | | | 98,497 | (5) | | | | 34,674,399 | | | | | 2018 | | | | | 12,000,000 | | | | | | | | | | 17,615,220 | | | | | 32,251 | (6) | | | | 29,647,471 | | | | | | | | | Spencer Neumann Chief Financial Officer | | | | 2020 | | | | | 6,050,000 | | | | | | | | | | 6,865,017 | | | | | 24,134 | (7) | | | | 12,939,151 | | | | | 2019 | | | | | 4,981,693 | (8) | | | | 1,700,000 | (9) | | | | 5,272,020 | | | | | 29,008 | (10) | | | | 11,982,721 | | | | | | | | | Greg Peters Chief Operating Officer and Chief Product Officer | | | | 2020 | | | | | 12,000,000 | | | | | | | | | | 8,664,337 | | | | | 141,658 | (11) | | | | 20,805,995 | | | | | 2019 | | | | | 10,000,000 | | | | | | | | | | 8,287,734 | | | | | 340,976 | (12) | | | | 18,628,710 | | | | | 2018 | | | | | 6,000,000 | | | | | | | | | | 7,985,902 | | | | | 832,687 | (13) | | | | 14,818,589 | | | | | | | | | David Hyman Chief Legal Officer | | | | 2020 | | | | | 5,500,000 | | | | | | | | | | 4,956,023 | | | | | 13,324 | (14) | | | | 10,469,347 | | | | | 2019 | | | | | 3,500,000 | | | | | | | | | | 4,643,129 | | | | | 15,550 | (15) | | | | 8,158,679 | | | | | 2018 | | | | | 2,500,000 | | | | | | | | | | 3,914,510 | | | | | 11,890 | (16) | | | | 6,426,400 | | | | | | | | | Rachel Whetstone Chief Communications Officer | | | | 2020 | | | | | 4,800,000 | | | | | | | | | | 555,929 | | | | | 170 | (17) | | | | 5,356,099 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(1) | Dollar amounts in the Option Awards column reflect the grant date fair value with respect to stock options during the respective fiscal year.year, computed in accordance with FASB ASC Topic 718. The dollar amounts set forth in the Option Awards column are different than the stock option allocation amounts described in the section above entitled “Compensation Discussion and Analysis” because the stock option allocation amounts in such section are reflective of the total compensation amount attributable to stock option grants, notrather than the accounting valuation. For a discussion of the assumptions made in the valuation reflected in the Option Awards column, refer to Note 79 to the Company’s consolidated financial statements for the fiscal year ended December 31, 2017 and the discussion under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates—Stock-Based Compensation”2020 in the Company’s our Form10-K filed with the SEC on February 5, 2018.January 28, 2021. |
(2) | In accordance withWe permit our Named Executive Officers and their family members and guests to use our corporate aircraft for personal use. Personal use of company aircraft is calculated based upon our actual aggregate incremental cost to operate the Company’s Performance Bonus Planaircraft, including fuel, crew, and catering costs, as approvedwell as other variable costs. Fixed costs, which do not change based on usage, are excluded. |
(3) | Includes $147,146 and $465,637 for personal use of company aircraft in 2020 and 2019, respectively. |
(4) | Includes $11,400 representing our matching contribution made under our 401(k) plan, $7,639 for car services, and $995,088 in residential security costs paid to a third-party provider by the Company valued on the basis of aggregate incremental cost to the Company. The Compensation Committee approved the dollar amounts representresidential security costs after considering the amount earned in 2017 forpotential security concerns related to Mr. Sarandos’s service as an executive officer and believes the achievement of the established performance goals.security costs are a necessary and appropriate business expense. |
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(3)(5) | Includes $8,100$9,800 representing our matching contribution made under our 401(k) plan, $74,282 for personal use of company aircraft and $14,415 for car services. |
(6) | Includes $8,250 representing our matching contribution made under our 401(k) plan, $19,599 for personal use of company aircraft, and $4,402 for commuting expenses. |
(7) | Includes $14,581 representing our matching contribution made under our 401(k) plan, $2,174 for personal use of company aircraft, and $7,379 for car services. |
(8) | Amount reflects the prorated payment of Mr. Neumann’s salary based on his employment start date of January 7, 2019. |
(9) | Amount represents a one-time cash payment Mr. Neumann received upon joining the Company, which served as an inducement for him to join the Company. |
(10) | Includes $6,731 representing our matching contribution made under our 401(k) plan and $6,457,500 in connection with his departure from Netflix.$22,277 for car services. |
(4)(11) | Includes $7,950 representing our matching contribution made under our 401(k) plan.$140,394 for personal use of company aircraft and $1,264 for commuting expenses. |
(5)(12) | Includes $7,950 representing our matching contribution made under our 401(k) plan.$340,471 for personal use of company aircraft and $505 for commuting expenses. |
(6)(13) | Mr. Hyman was not a Named Executive Officer for 2016 and 2017. |
(7) | Includes $8,100 representing our matching contribution made under our 401(k) plan and payment of $300,155 for living allowances, taxes paid by the Company to tax equalize the employee for an expatriate assignment and $772 of commuting expenses. |
(8) | Includes $1,746,105$829,025 for living allowances and taxes paid by the Company to tax equalize the employee for an expatriate assignment and $2,613 of$3,662 for commuting expenses. |
(9)(14) | Includes $1,660,135 for living allowances and taxes paid by the Company to tax equalize the employee for an expatriate assignment. |
(10) | Includes $414,087 for living allowances and taxes paid by the Company to tax equalize the employee for an expatriate assignment. |
(11) | Includes $8,100$11,400 representing our matching contribution made under our 401(k) plan.plan, $1,664 for commuting expenses and $260 for car services. |
(12)(15) | Includes $5,538$9,800 representing our matching contribution made under our 401(k) plan.plan, $1,481 reimbursed by the Company for tax preparation, $4,118 for commuting expenses, and $151 for car services. |
(13)(16) | Includes $5,538$8,250 representing our matching contribution made under our 401(k) plan and a $500 auto allowance.$3,640 for commuting expenses. |
(14)(17) | Includes $8,100 representing our matching contribution made under our 401(k) plan and payment of $545,541$170 for living allowances and taxes paid by the Company to tax equalize the employee for an expatriate assignment. |
(15) | Includes $7,950 representing our matching contribution made under our 401(k) plan and payment of $1,541,186 for living allowances and taxes paid by the Company to tax equalize the employee for an expatriate assignment. |
(16) | Includes $7,950 representing our matching contribution made under our 401(k) plan and payment of $190,350 for living allowances and taxes paid by the Company to tax equalize the employee for an expatriate assignment.car services. |
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Grants of Plan-Based Awards
GRANTS OF PLAN-BASED AWARDS The following table sets forth information concerning grants of awards made to the Named Executive Officers during 2017.2020. As described above in “Compensation Discussion and Analysis,” the Company grantswe grant eligible employees, including the Named Executive Officers, fully vested stock options on a monthly basis. These stock options can generally be exercised up to 10 years following the date of grant, regardless of employment status. These are the only equity awards made to the Named Executive Officers. Also as described above in “Compensation Discussion and Analysis,” in 2017, the Company granted performance-based cash compensation to each of the Named Executive Officers who allocated more than $1 million of their allocatable compensation to cash. These cash performance-based awards were granted on a quarterly basis under the Company’s Performance Bonus Plan. The material terms of these cash incentive and stock option grants, including the formula for determining the number of stock options to be granted, are set forth above in “Compensation Discussion and Analysis.” | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Potential Payouts Under Non-Equity Incentive Plan Awards(1) | | | All Other Option Awards: Number of Securities Underlying Options | | | Exercise or Base Price of Option Awards | | | Grant Date Fair Value of Stock and Option Awards | | Name | | Grant Date | | | Threshold ($) | | | Target ($) | | | Maximum ($) | | | (#) | | | ($/Sh) | | | ($) | | Reed Hastings | | | 1/3/2017 | | | | | | | | | | | | | | | | 31,130 | | | $ | 127.4900 | | | | 1,808,784 | | Reed Hastings | | | 2/1/2017 | | | | | | | | | | | | | | | | 31,373 | | | $ | 140.7800 | | | | 2,012,929 | | Reed Hastings | | | 3/1/2017 | | | | | | | | | | | | | | | | 30,961 | | | $ | 142.6500 | | | | 2,012,883 | | Reed Hastings | | | 4/3/2017 | | | | | | | | | | | | | | | | 30,062 | | | $ | 146.9200 | | | | 1,917,165 | | Reed Hastings | | | 5/1/2017 | | | | | | | | | | | | | | | | 28,431 | | | $ | 155.3500 | | | | 1,917,185 | | Reed Hastings | | | 6/1/2017 | | | | | | | | | | | | | | | | 27,097 | | | $ | 162.9900 | | | | 1,917,091 | | Reed Hastings | | | 7/3/2017 | | | | | | | | | | | | | | | | 30,216 | | | $ | 146.1700 | | | | 1,939,384 | | Reed Hastings | | | 8/1/2017 | | | | | | | | | | | | | | | | 24,264 | | | $ | 182.0300 | | | | 1,939,429 | | Reed Hastings | | | 9/1/2017 | | | | | | | | | | | | | | | | 25,275 | | | $ | 174.7400 | | | | 1,939,331 | | Reed Hastings | | | 10/2/2017 | | | | | | | | | | | | | | | | 24,952 | | | $ | 177.0100 | | | | 2,041,153 | | Reed Hastings | | | 11/1/2017 | | | | | | | | | | | | | | | | 22,306 | | | $ | 198.0000 | | | | 2,041,077 | | Reed Hastings | | | 12/1/2017 | | | | | | | | | | | | | | | | 23,641 | | | $ | 186.8200 | | | | 2,041,088 | | Neil Hunt | | | 1/3/2017 | | | | | | | | | | | | | | | | 3,513 | | | $ | 127.4900 | | | | 204,120 | | Neil Hunt | | | 1/22/2017 | | | | 1,040,000 | | | | 1,300,000 | | | | 1,560,000 | | | | | | | | | | | | | | Neil Hunt | | | 2/1/2017 | | | | | | | | | | | | | | | | 3,567 | | | $ | 140.7800 | | | | 228,863 | | Neil Hunt | | | 3/1/2017 | | | | | | | | | | | | | | | | 3,519 | | | $ | 142.6500 | | | | 228,783 | | Neil Hunt | | | 4/3/2017 | | | | | | | | | | | | | | | | 3,418 | | | $ | 146.9200 | | | | 217,979 | | Neil Hunt | | | 4/22/2017 | | | | 1,040,000 | | | | 1,300,000 | | | | 1,560,000 | | | | | | | | | | | | | | Neil Hunt | | | 5/1/2017 | | | | | | | | | | | | | | | | 3,232 | | | $ | 155.3500 | | | | 217,943 | | Neil Hunt | | | 6/1/2017 | | | | | | | | | | | | | | | | 3,080 | | | $ | 162.9900 | | | | 217,907 | | David Hyman | | | 1/3/2017 | | | | | | | | | | | | | | | | 3,276 | | | $ | 127.4900 | | | | 190,349 | | David Hyman | | | 2/1/2017 | | | | | | | | | | | | | | | | 1,798 | | | $ | 140.7800 | | | | 115,362 | | David Hyman | | | 3/1/2017 | | | | | | | | | | | | | | | | 1,775 | | | $ | 142.6500 | | | | 115,399 | | David Hyman | | | 4/3/2017 | | | | | | | | | | | | | | | | 1,722 | | | $ | 146.9200 | | | | 109,818 | | David Hyman | | | 5/1/2017 | | | | | | | | | | | | | | | | 1,630 | | | $ | 155.3500 | | | | 109,916 | | David Hyman | | | 6/1/2017 | | | | | | | | | | | | | | | | 1,553 | | | $ | 162.9900 | | | | 109,874 | | David Hyman | | | 7/3/2017 | | | | | | | | | | | | | | | | 1,732 | | | $ | 146.1700 | | | | 111,167 | |
| | | | | | | | | | | | | | | | | | | | | Name | | Grant Date | | All Other Option Awards: Number of Securities Underlying Options (#) | | Exercise or Base Price of Option Awards ($/Sh) | | Grant Date Fair Value of Stock and Option Awards ($) | | | | | | Reed Hastings | | | | 1/2/2020 | | | | | 19,456 | | | | | 329.81 | | | | | 3,019,914 | | | | | | | | | | | 2/3/2020 | | | | | 19,786 | | | | | 358.00 | | | | | 3,333,636 | | | | | | | | | | | 3/2/2020 | | | | | 18,589 | | | | | 381.05 | | | | | 3,333,192 | | | | | | | | | | | 4/1/2020 | | | | | 19,455 | | | | | 364.08 | | | | | 3,592,105 | | | | | | | | | | | 5/1/2020 | | | | | 17,057 | | | | | 415.27 | | | | | 3,592,148 | | | | | | | | | | | 6/1/2020 | | | | | 16,631 | | | | | 425.92 | | | | | 3,592,258 | | | | | | | | | | | 7/1/2020 | | | | | 14,585 | | | | | 485.64 | | | | | 3,650,607 | | | | | | | | | | | 8/3/2020 | | | | | 14,206 | | | | | 498.62 | | | | | 3,650,780 | | | | | | | | | | | 9/1/2020 | | | | | 12,727 | | | | | 556.55 | | | | | 3,650,685 | | | | | | | | | | | 10/1/2020 | | | | | 13,428 | | | | | 527.51 | | | | | 3,671,163 | | | | | | | | | | | 11/2/2020 | | | | | 14,632 | | | | | 484.12 | | | | | 3,671,286 | | | | | | | | | | | 12/1/2020 | | | | | 14,038 | | | | | 504.58 | | | | | 3,671,105 | | | | | | | Ted Sarandos | | | | 1/2/2020 | | | | | 8,527 | | | | | 329.81 | | | | | 1,323,540 | | | | | | | | | | | 2/3/2020 | | | | | 8,525 | | | | | 358.00 | | | | | 1,436,331 | | | | | | | | | | | 3/2/2020 | | | | | 8,010 | | | | | 381.05 | | | | | 1,436,272 | | | | | | | | | | | 4/1/2020 | | | | | 8,383 | | | | | 364.08 | | | | | 1,547,809 | | | | | | | | | | | 5/1/2020 | | | | | 7,350 | | | | | 415.27 | | | | | 1,547,886 | | | | | | | | | | | 6/1/2020 | | | | | 7,166 | | | | | 425.92 | | | | | 1,547,840 | | | | | | | | | | | 7/1/2020 | | | | | 6,284 | | | | | 485.64 | | | | | 1,572,877 | | | | | | | | | | | 8/3/2020 | | | | | 6,121 | | | | | 498.62 | | | | | 1,573,027 | | | | | | | | | | | 9/1/2020 | | | | | 5,484 | | | | | 556.55 | | | | | 1,573,062 | | | | | | | | | | | 10/1/2020 | | | | | 5,786 | | | | | 527.51 | | | | | 1,581,870 | | | | | | | | | | | 11/2/2020 | | | | | 6,304 | | | | | 484.12 | | | | | 1,581,724 | | | | | | | | | | | 12/1/2020 | | | | | 6,049 | | | | | 504.58 | | | | | 1,581,886 | | | | | | | Spencer Neumann | | | | 1/2/2020 | | | | | 3,158 | | | | | 329.81 | | | | | 490,177 | | | | | | | | | | | 2/3/2020 | | | | | 3,201 | | | | | 358.00 | | | | | 539,319 | | | | | | | | | | | 3/2/2020 | | | | | 3,007 | | | | | 381.05 | | | | | 539,185 | | | | | | | | | | | 4/1/2020 | | | | | 3,147 | | | | | 364.08 | | | | | 581,051 | | | | | | | | | | | 5/1/2020 | | | | | 2,759 | | | | | 415.27 | | | | | 581,036 | | | | | | | | | | | 6/1/2020 | | | | | 2,690 | | | | | 425.92 | | | | | 581,034 | | | | | | | | | | | 7/1/2020 | | | | | 2,360 | | | | | 485.64 | | | | | 590,705 | | | | | | | | | | | 8/3/2020 | | | | | 2,298 | | | | | 498.62 | | | | | 590,560 | | | | | | | | | | | 9/1/2020 | | | | | 2,058 | | | | | 556.55 | | | | | 590,328 | | | | | | | | | | | 10/1/2020 | | | | | 2,173 | | | | | 527.51 | | | | | 594,090 | | | | | | | | | | | 11/2/2020 | | | | | 2,367 | | | | | 484.12 | | | | | 593,899 | | | | | | | | | | | 12/1/2020 | | | | | 2,270 | | | | | 504.58 | | | | | 593,632 | |
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| Name | | | Grant Date | | All Other Option Awards: Number of Securities Underlying Options (#) | | Exercise or Base Price of Option Awards ($/Sh) | | Grant Date Fair Value of Stock and Option Awards ($) | | Greg Peters | | | | 1/2/2020 | | | | 4,296 | | | | 329.81 | | | | 666,815 | | | | | | | Estimated Potential Payouts Under Non-Equity Incentive Plan Awards(1) | | All Other Option Awards: Number of Securities Underlying Options | | Exercise or Base Price of Option Awards | | Grant Date Fair Value of Stock and Option Awards | | | | 2/3/2020 | | | | 4,015 | | | | 358.00 | | | | 676,466 | | Name | | Grant Date | | Threshold ($) | | Target ($) | | Maximum ($) | | (#) | | ($/Sh) | | ($) | | | | | | | | 3/2/2020 | | | | 3,772 | | | | 381.05 | | | | 676,357 | | | | | | | 4/1/2020 | | | | 3,949 | | | | 364.08 | | | | 729,130 | | | | | | | 5/1/2020 | | | | 3,461 | | | | 415.27 | | | | 728,875 | | | | | | | 6/1/2020 | | | | 3,375 | | | | 425.92 | | | | 728,992 | | | | | | | 7/1/2020 | | | | 2,960 | | | | 485.64 | | | | 740,884 | | | | | | | 8/3/2020 | | | | 2,883 | | | | 498.62 | | | | 740,898 | | | | | | | 9/1/2020 | | | | 2,583 | | | | 556.55 | | | | 740,922 | | | | | | | 10/1/2020 | | | | 2,725 | | | | 527.51 | | | | 745,004 | | | | | | | 11/2/2020 | | | | 2,969 | | | | 484.12 | | | | 744,946 | | | | | | | 12/1/2020 | | | | 2,849 | | | | 504.58 | | | | 745,048 | | | David Hyman | | 7/23/2017 | | | 640,000 | | | 800,000 | | | 960,000 | | | | | | | | | | 1/2/2020 | | | | 2,432 | | | | 329.81 | | | | 377,489 | | David Hyman | | 8/1/2017 | | | | | | | | | 1,390 | | | $ | 182.0300 | | | 111,103 | | | David Hyman | | 9/1/2017 | | | | | | | | | 1,449 | | | $ | 174.7400 | | | 111,181 | | | David Hyman | | 10/2/2017 | | | | | | | | | 1,430 | | | $ | 177.0100 | | | 116,978 | | | David Hyman | | 10/23/2017 | | | 640,000 | | | 800,000 | | | 960,000 | | | | | | | | | David Hyman | | 11/1/2017 | | | | | | | | | 1,278 | | | $ | 198.0000 | | | 116,941 | | | David Hyman | | 12/1/2017 | | | | | | | | | 1,355 | | | $ | 186.8200 | | | 116,986 | | | Greg Peters | | 1/3/2017 | | | | | | | | | 5,352 | | | $ | 127.4900 | | | 310,974 | | | Greg Peters | | 1/22/2017 | | | 300,000 | | | 375,000 | | | 450,000 | | | | | | | | | Greg Peters | | 2/1/2017 | | | | | | | | | 4,846 | | | $ | 140.7800 | | | 310,925 | | | Greg Peters | | 3/1/2017 | | | | | | | | | 4,783 | | | $ | 142.6500 | | | 310,960 | | | Greg Peters | | 4/3/2017 | | | | | | | | | 4,644 | | | $ | 146.9200 | | | 296,165 | | | Greg Peters | | 4/22/2017 | | | 300,000 | | | 375,000 | | | 450,000 | | | | | | | | | Greg Peters | | 5/1/2017 | | | | | | | | | 4,392 | | | $ | 155.3500 | | | 296,165 | | | Greg Peters | | 6/1/2017 | | | | | | | | | 4,186 | | | $ | 162.9900 | | | 296,156 | | | Greg Peters | | 7/3/2017 | | | | | | | | | 4,668 | | | $ | 146.1700 | | | 299,611 | | | Greg Peters | | 7/23/2017 | | | 800,000 | | | 1,000,000 | | | 1,200,000 | | | | | | | | | Greg Peters | | 8/1/2017 | | | | | | | | | 3,891 | | | $ | 182.0300 | | | 311,009 | | | Greg Peters | | 9/1/2017 | | | | | | | | | 4,054 | | | $ | 174.7400 | | | 311,060 | | | Greg Peters | | 10/2/2017 | | | | | | | | | 4,001 | | | $ | 177.0100 | | | 327,295 | | | Greg Peters | | 10/23/2017 | | | 800,000 | | | 1,000,000 | | | 1,200,000 | | | | | | | | | Greg Peters | | 11/1/2017 | | | | | | | | | 3,578 | | | $ | 198.0000 | | | 327,400 | | | Greg Peters | | 12/1/2017 | | | | | | | | | 3,791 | | | $ | 186.8200 | | | 327,303 | | | Ted Sarandos | | 1/3/2017 | | | | | | | | | 19,282 | | | $ | 127.4900 | | | 1,120,365 | | | Ted Sarandos | | 1/22/2017 | | | 1,800,000 | | | 2,250,000 | | | 2,700,000 | | | | | | | | | Ted Sarandos | | 2/1/2017 | | | | | | | | | 16,279 | | | $ | 140.7800 | | | 1,044,480 | | | Ted Sarandos | | 3/1/2017 | | | | | | | | | 16,065 | | | $ | 142.6500 | | | 1,044,442 | | | Ted Sarandos | | 4/3/2017 | | | | | | | | | 15,598 | | | $ | 146.9200 | | | 994,742 | | | Ted Sarandos | | 4/22/2017 | | | 1,800,000 | | | 2,250,000 | | | 2,700,000 | | | | | | | | | Ted Sarandos | | 5/1/2017 | | | | | | | | | 14,751 | | | $ | 155.3500 | | | 994,703 | | | Ted Sarandos | | 6/1/2017 | | | | | | | | | 14,060 | | | $ | 162.9900 | | | 994,734 | | | Ted Sarandos | | 7/3/2017 | | | | | | | | | 15,679 | | | $ | 146.1700 | | | 1,006,341 | | | Ted Sarandos | | 7/23/2017 | | | 1,800,000 | | | 2,250,000 | | | 2,700,000 | | | | | | | | | Ted Sarandos | | 8/1/2017 | | | | | | | | | 12,589 | | | $ | 182.0300 | | | 1,006,242 | | | Ted Sarandos | | 9/1/2017 | | | | | | | | | 13,115 | | | $ | 174.7400 | | | 1,006,303 | | | Ted Sarandos | | 10/2/2017 | | | | | | | | | 12,946 | | | $ | 177.0100 | | | 1,059,024 | | | Ted Sarandos | | 10/23/2017 | | | 1,800,000 | | | 2,250,000 | | | 2,700,000 | | | | | | | | | Ted Sarandos | | 11/1/2017 | | | | | | | | | 11,574 | | | $ | 198.0000 | | | 1,059,062 | | | Ted Sarandos | | 12/1/2017 | | | | | | | | | 12,267 | | | $ | 186.8200 | | | 1,059,094 | | | David Wells | | 1/3/2017 | | | | | | | | | 2,942 | | | $ | 127.4900 | | | 170,943 | | | | | | | | 2/3/2020 | | | | 2,299 | | | | 358.00 | | | | 387,346 | | | | | | | 3/2/2020 | | | | 2,160 | | | | 381.05 | | | | 387,309 | | | | | | | 4/1/2020 | | | | 2,260 | | | | 364.08 | | | | 417,279 | | | | | | | 5/1/2020 | | | | 1,981 | | | | 415.27 | | | | 417,192 | | | | | | | 6/1/2020 | | | | 1,932 | | | | 425.92 | | | | 417,308 | | | | | | | 7/1/2020 | | | | 1,695 | | | | 485.64 | | | | 424,256 | | | | | | | 8/3/2020 | | | | 1,650 | | | | 498.62 | | | | 424,031 | | | | | | | 9/1/2020 | | | | 1,479 | | | | 556.55 | | | | 424,245 | | | | | | | 10/1/2020 | | | | 1,560 | | | | 527.51 | | | | 426,498 | | | | | | | 11/2/2020 | | | | 1,700 | | | | 484.12 | | | | 426,544 | | | | | | | 12/1/2020 | | | | 1,631 | | | | 504.58 | | | | 426,526 | | | Rachel Whetstone | | | | 1/2/2020 | | | | 221 | | | | 329.81 | | | | 34,303 | | | | | | | 2/3/2020 | | | | 262 | | | | 358.00 | | | | 44,143 | | | | | | | 3/2/2020 | | | | 246 | | | | 381.05 | | | | 44,110 | | | | | | | 4/1/2020 | | | | 257 | | | | 364.08 | | | | 47,452 | | | | | | | 5/1/2020 | | | | 226 | | | | 415.27 | | | | 47,595 | | | | | | | 6/1/2020 | | | | 220 | | | | 425.92 | | | | 47,519 | | | | | | | 7/1/2020 | | | | 193 | | | | 485.64 | | | | 48,308 | | | | | | | 8/3/2020 | | | | 188 | | | | 498.62 | | | | 48,314 | | | | | | | 9/1/2020 | | | | 169 | | | | 556.55 | | | | 48,477 | | | | | | | 10/1/2020 | | | | 177 | | | | 527.51 | | | | 48,391 | | | | | | | 11/2/2020 | | | | 194 | | | | 484.12 | | | | 48,676 | | | | | | | 12/1/2020 | | | | 186 | | | | 504.58 | | | | 48,641 | |
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| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Estimated Potential Payouts Under Non-Equity Incentive Plan Awards(1) | | | All Other Option Awards: Number of Securities Underlying Options | | | Exercise or Base Price of Option Awards | | | Grant Date Fair Value of Stock and Option Awards | | Name | | Grant Date | | | Threshold ($) | | | Target ($) | | | Maximum ($) | | | (#) | | | ($/Sh) | | | ($) | | David Wells | | | 2/1/2017 | | | | | | | | | | | | | | | | 2,826 | | | $ | 140.7800 | | | | 181,320 | | David Wells | | | 3/1/2017 | | | | | | | | | | | | | | | | 2,790 | | | $ | 142.6500 | | | | 181,388 | | David Wells | | | 4/3/2017 | | | | | | | | | | | | | | | | 2,708 | | | $ | 146.9200 | | | | 172,699 | | David Wells | | | 5/1/2017 | | | | | | | | | | | | | | | | 2,562 | | | $ | 155.3500 | | | | 172,763 | | David Wells | | | 6/1/2017 | | | | | | | | | | | | | | | | 2,441 | | | $ | 162.9900 | | | | 172,699 | | David Wells | | | 7/3/2017 | | | | | | | | | | | | | | | | 2,722 | | | $ | 146.1700 | | | | 174,709 | | David Wells | | | 8/1/2017 | | | | | | | | | | | | | | | | 2,186 | | | $ | 182.0300 | | | | 174,728 | | David Wells | | | 9/1/2017 | | | | | | | | | | | | | | | | 2,277 | | | $ | 174.7400 | | | | 174,712 | | David Wells | | | 10/2/2017 | | | | | | | | | | | | | | | | 2,248 | | | $ | 177.0100 | | | | 183,893 | | David Wells | | | 11/1/2017 | | | | | | | | | | | | | | | | 2,010 | | | $ | 198.0000 | | | | 183,922 | | David Wells | | | 12/1/2017 | | | | | | | | | | | | | | | | 2,130 | | | $ | 186.8200 | | | | 183,897 | |
(1) | Amounts in this column reflect performance-based cash compensation approved pursuant to the Performance Bonus Plan. Amounts in the “Threshold” column reflect 80% achievement of the applicable performance goal, below which no amount is payable. Amounts in the “Target” and “Maximum” columns reflect 100% and 120% achievement of the performance goal, respectively. | | | | 56 | | | | |
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Outstanding Equity Awards at FiscalOUTSTANDING EQUITY AWARDS AT FISCAL Year-EndYEAR-END
The following table sets forth information concerning equity awards for each Named Executive Officer that remained outstanding as of December 31, 2017.2020. All stock options are fully vested.vested and can generally be exercised up to 10 years following the date of grant. | | | | Option Awards | Name | | | Number of Securities Underlying Unexercised Options: Exercisable (#) | | Option Exercise Price ($) | | Option Expiration Date | | Reed Hastings | | | | 38,801 | | | | 16.11 | | | | 3/1/2022 | | | | | Option Awards | | | | 38,388 | | | | 16.28 | | | | 4/2/2022 | | | Name | | Number of Securities Underlying Unexercised Options: Exercisable | | Option Exercise Price ($) | | Option Expiration Date | | | Reed Hastings | | 75,369 | | | $ | 4.4200 | | | 3/3/2018 | | | Reed Hastings | | 63,889 | | | $ | 5.2157 | | | 4/1/2018 | | | Reed Hastings | | 75,271 | | | $ | 4.4286 | | | 5/1/2018 | | | Reed Hastings | | 75,558 | | | $ | 4.4129 | | | 6/2/2018 | | | Reed Hastings | | 86,037 | | | $ | 3.8714 | | | 7/1/2018 | | | Reed Hastings | | 79,800 | | | $ | 4.1743 | | | 8/1/2018 | | | Reed Hastings | | 75,656 | | | $ | 4.4057 | | | 9/2/2018 | | | Reed Hastings | | 77,672 | | | $ | 4.2914 | | | 10/1/2018 | | | Reed Hastings | | 99,883 | | | $ | 3.3371 | | | 11/3/2018 | | | Reed Hastings | | 105,868 | | | $ | 3.1486 | | | 12/1/2018 | | | Reed Hastings | | 78,092 | | | $ | 4.2671 | | | 1/2/2019 | | | Reed Hastings | | 63,147 | | | $ | 5.2786 | | | 2/2/2019 | | | Reed Hastings | | 67,907 | | | $ | 4.9071 | | | 3/2/2019 | | | Reed Hastings | | 54,418 | | | $ | 6.1243 | | | 4/1/2019 | | | Reed Hastings | | 52,458 | | | $ | 6.3543 | | | 5/1/2019 | | | Reed Hastings | | 56,966 | | | $ | 5.8486 | | | 6/1/2019 | | | Reed Hastings | | 57,414 | | | $ | 5.8029 | | | 7/1/2019 | | | Reed Hastings | | 51,898 | | | $ | 6.4243 | | | 8/3/2019 | | | Reed Hastings | | 55,342 | | | $ | 6.0214 | | | 9/1/2019 | | | Reed Hastings | | 52,269 | | | $ | 6.3743 | | | 10/1/2019 | | | Reed Hastings | | 43,372 | | | $ | 7.6857 | | | 11/2/2019 | | | Reed Hastings | | 40,061 | | | $ | 8.3186 | | | 12/1/2019 | | | Reed Hastings | | 54,516 | | | $ | 7.6400 | | | 1/4/2020 | | | Reed Hastings | | 95,578 | | | $ | 8.7186 | | | 2/1/2020 | | | Reed Hastings | | 83,692 | | | $ | 9.9571 | | | 3/1/2020 | | | Reed Hastings | | 77,777 | | | $ | 10.7143 | | | 4/1/2020 | | | Reed Hastings | | 57,197 | | | $ | 14.5700 | | | 5/3/2020 | | | Reed Hastings | | 54,369 | | | $ | 15.3271 | | | 6/1/2020 | | | Reed Hastings | | 53,193 | | | $ | 15.6657 | | | 7/1/2020 | | | Reed Hastings | | 57,260 | | | $ | 14.5543 | | | 8/2/2020 | | | Reed Hastings | | 43,239 | | | $ | 19.2729 | | | 9/1/2020 | | | Reed Hastings | | 37,716 | | | $ | 22.0943 | | | 10/1/2020 | | | Reed Hastings | | 34,853 | | | $ | 23.9100 | | | 11/1/2020 | | | Reed Hastings | | 29,148 | | | $ | 28.5914 | | | 12/1/2020 | | | | | | | 53,774 | | | | 11.62 | | | | 5/1/2022 | | | | | | | 69,503 | | | | 8.99 | | | | 6/1/2022 | | | | | | | 64,477 | | | | 9.69 | | | | 7/2/2022 | | | | | | | 80,276 | | | | 7.79 | | | | 8/1/2022 | | | | | | | 78,225 | | | | 7.99 | | | | 9/4/2022 | | | | | | | 78,057 | | | | 8.01 | | | | 10/1/2022 | | | | | | | 56,315 | | | | 11.10 | | | | 11/1/2022 | | | | | | | 57,561 | | | | 10.86 | | | | 12/3/2022 | | | | | | | 47,551 | | | | 13.14 | | | | 1/2/2023 | | | | | | | 35,399 | | | | 23.54 | | | | 2/1/2023 | | | | | | | 30,807 | | | | 27.05 | | | | 3/1/2023 | | | | | | | 31,976 | | | | 26.06 | | | | 4/1/2023 | | | | | | | 27,398 | | | | 30.42 | | | | 5/1/2023 | | | | | | | 26,278 | | | | 31.71 | | | | 6/3/2023 | | | | | | | 26,012 | | | | 32.04 | | | | 7/1/2023 | | | | | | | 23,415 | | | | 35.59 | | | | 8/1/2023 | | | | | | | 20,188 | | | | 41.29 | | | | 9/3/2023 | | | | | | | 17,969 | | | | 46.37 | | | | 10/1/2023 | | | | | | | 17,717 | | | | 47.04 | | | | 11/1/2023 | | | | | | | 16,030 | | | | 51.99 | | | | 12/2/2023 | | | | | | | 16,079 | | | | 51.83 | | | | 1/2/2024 | | | | | | | 21,637 | | | | 57.77 | | | | 2/3/2024 | | | | | | | 19,635 | | | | 63.66 | | | | 3/3/2024 | | | | | | | 23,996 | | | | 52.10 | | | | 4/1/2024 | | | | | | | 25,998 | | | | 48.07 | | | | 5/1/2024 | | | | | | | 20,734 | | | | 60.29 | | | | 6/2/2024 | | | | | | | 18,494 | | | | 67.59 | | | | 7/1/2024 | | | | | | | 20,566 | | | | 60.77 | | | | 8/1/2024 | | | | | | | 18,361 | | | | 68.09 | | | | 9/2/2024 | | | | | | | 19,943 | | | | 62.69 | | | | 10/1/2024 | | | | | | | 22,526 | | | | 55.49 | | | | 11/3/2024 | | | | | | | 25,599 | | | | 48.83 | | | | 12/1/2024 | | | | | | | 25,074 | | | | 49.85 | | | | 1/2/2025 | | | | | | | 45,290 | | | | 63.01 | | | | 2/2/2025 | | | | | | | 41,601 | | | | 68.61 | | | | 3/2/2025 | | | | | | | 48,363 | | | | 59.02 | | | | 4/1/2025 | | | | | | | 35,868 | | | | 79.58 | | | | 5/1/2025 | | | | | | | 32,067 | | | | 89.00 | | | | 6/1/2025 | | | | | | | 30,485 | | | | 93.64 | | | | 7/1/2025 | | | | | | | 25,360 | | | | 112.56 | | | | 8/3/2025 | |
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| | | | Option Awards | Name | | | Number of Securities Underlying Unexercised Options: Exercisable (#) | | Option Exercise Price ($) | | Option Expiration Date | | Reed Hastings | | | | 26,977 | | | | 105.79 | | | | 9/1/2025 | | | | | Option Awards | | | | 26,933 | | | | 105.98 | | | | 10/1/2025 | | | Name | | Number of Securities Underlying Unexercised Options: Exercisable | | Option Exercise Price ($) | | Option Expiration Date | | | Reed Hastings | | 32,697 | | | $ | 25.4871 | | | 1/3/2021 | | | Reed Hastings | | 41,097 | | | $ | 30.4143 | | | 2/1/2021 | | | Reed Hastings | | 42,763 | | | $ | 29.2329 | | | 3/1/2021 | | | Reed Hastings | | 36,141 | | | $ | 34.5843 | | | 4/1/2021 | | | Reed Hastings | | 36,890 | | | $ | 33.8843 | | | 5/2/2021 | | | Reed Hastings | | 32,739 | | | $ | 38.1800 | | | 6/1/2021 | | | Reed Hastings | | 32,648 | | | $ | 38.2843 | | | 7/1/2021 | | | Reed Hastings | | 33,222 | | | $ | 37.6257 | | | 8/1/2021 | | | Reed Hastings | | 37,513 | | | $ | 33.3243 | | | 9/1/2021 | | | Reed Hastings | | 77,266 | | | $ | 16.1786 | | | 10/3/2021 | | | Reed Hastings | | 109,249 | | | $ | 11.4414 | | | 11/1/2021 | | | Reed Hastings | | 130,263 | | | $ | 9.5957 | | | 12/1/2021 | | | Reed Hastings | | 121,121 | | | $ | 10.3200 | | | 1/3/2022 | | | Reed Hastings | | 35,581 | | | $ | 17.5671 | | | 2/1/2022 | | | Reed Hastings | | 38,801 | | | $ | 16.1071 | | | 3/1/2022 | | | Reed Hastings | | 38,388 | | | $ | 16.2814 | | | 4/2/2022 | | | Reed Hastings | | 53,774 | | | $ | 11.6229 | | | 5/1/2022 | | | Reed Hastings | | 69,503 | | | $ | 8.9929 | | | 6/1/2022 | | | Reed Hastings | | 64,477 | | | $ | 9.6929 | | | 7/2/2022 | | | Reed Hastings | | 80,276 | | | $ | 7.7857 | | | 8/1/2022 | | | Reed Hastings | | 78,225 | | | $ | 7.9900 | | | 9/4/2022 | | | Reed Hastings | | 78,057 | | | $ | 8.0071 | | | 10/1/2022 | | | Reed Hastings | | 56,315 | | | $ | 11.0986 | | | 11/1/2022 | | | Reed Hastings | | 57,561 | | | $ | 10.8586 | | | 12/3/2022 | | | Reed Hastings | | 47,551 | | | $ | 13.1443 | | | 1/2/2023 | | | Reed Hastings | | 35,399 | | | $ | 23.5429 | | | 2/1/2023 | | | Reed Hastings | | 30,807 | | | $ | 27.0529 | | | 3/1/2023 | | | Reed Hastings | | 31,976 | | | $ | 26.0614 | | | 4/1/2023 | | | Reed Hastings | | 27,398 | | | $ | 30.4157 | | | 5/1/2023 | | | Reed Hastings | | 26,278 | | | $ | 31.7100 | | | 6/3/2023 | | | Reed Hastings | | 26,012 | | | $ | 32.0400 | | | 7/1/2023 | | | Reed Hastings | | 23,415 | | | $ | 35.5886 | | | 8/1/2023 | | | Reed Hastings | | 20,188 | | | $ | 41.2857 | | | 9/3/2023 | | | Reed Hastings | | 17,969 | | | $ | 46.3743 | | | 10/1/2023 | | | Reed Hastings | | 17,717 | | | $ | 47.0386 | | | 11/1/2023 | | | Reed Hastings | | 16,030 | | | $ | 51.9886 | | | 12/2/2023 | | | Reed Hastings | | 16,079 | | | $ | 51.8314 | | | 1/2/2024 | | | Reed Hastings | | 21,637 | | | $ | 57.7686 | | | 2/3/2024 | | | Reed Hastings | | 19,635 | | | $ | 63.6557 | | | 3/3/2024 | | | | | | | 26,513 | | | | 107.64 | | | | 11/2/2025 | | | | | | | 22,765 | | | | 125.37 | | | | 12/1/2025 | | | | | | | 25,959 | | | | 109.96 | | | | 1/4/2026 | | | | | | | 42,176 | | | | 94.09 | | | | 2/1/2026 | | | | | | | 40,374 | | | | 98.30 | | | | 3/1/2026 | | | | | | | 37,547 | | | | 105.70 | | | | 4/1/2026 | | | | | | | 42,629 | | | | 93.11 | | | | 5/2/2026 | | | | | | | 39,097 | | | | 101.51 | | | | 6/1/2026 | | | | | | | 41,055 | | | | 96.67 | | | | 7/1/2026 | | | | | | | 42,055 | | | | 94.37 | | | | 8/1/2026 | | | | | | | 40,755 | | | | 97.38 | | | | 9/1/2026 | | | | | | | 38,670 | | | | 102.63 | | | | 10/3/2026 | | | | | | | 32,188 | | | | 123.30 | | | | 11/1/2026 | | | | | | | 33,857 | | | | 117.22 | | | | 12/1/2026 | | | | | | | 31,130 | | | | 127.49 | | | | 1/3/2027 | | | | | | | 31,373 | | | | 140.78 | | | | 2/1/2027 | | | | | | | 30,961 | | | | 142.65 | | | | 3/1/2027 | | | | | | | 30,062 | | | | 146.92 | | | | 4/3/2027 | | | | | | | 28,431 | | | | 155.35 | | | | 5/1/2027 | | | | | | | 27,097 | | | | 162.99 | | | | 6/1/2027 | | | | | | | 30,216 | | | | 146.17 | | | | 7/3/2027 | | | | | | | 24,264 | | | | 182.03 | | | | 8/1/2027 | | | | | | | 25,275 | | | | 174.74 | | | | 9/1/2027 | | | | | | | 24,952 | | | | 177.01 | | | | 10/2/2027 | | | | | | | 22,306 | | | | 198.00 | | | | 11/1/2027 | | | | | | | 23,641 | | | | 186.82 | | | | 12/1/2027 | | | | | | | 21,966 | | | | 201.07 | | | | 1/2/2028 | | | | | | | 22,557 | | | | 265.07 | | | | 2/1/2028 | | | | | | | 20,590 | | | | 290.39 | | | | 3/1/2028 | | | | | | | 21,332 | | | | 280.29 | | | | 4/2/2028 | | | | | | | 19,085 | | | | 313.30 | | | | 5/1/2028 | | | | | | | 16,612 | | | | 359.93 | | | | 6/1/2028 | | | | | | | 15,016 | | | | 398.18 | | | | 7/2/2028 | | | | | | | 17,670 | | | | 338.38 | | | | 8/1/2028 | | | | | | | 16,444 | | | | 363.60 | | | | 9/4/2028 | | | | | | | 15,676 | | | | 381.43 | | | | 10/1/2028 | | | | | | | 18,839 | | | | 317.38 | | | | 11/1/2028 | | | | | | | 20,597 | | | | 290.30 | | | | 12/3/2028 | | | | | | | 22,338 | | | | 267.66 | | | | 1/2/2029 | | | | | | | 18,881 | | | | 339.85 | | | | 2/1/2029 | | | | | | | 17,958 | | | | 357.32 | | | | 3/1/2029 | | | | | | | 17,486 | | | | 366.96 | | | | 4/1/2029 | | | | | | | 16,939 | | | | 378.81 | | | | 5/1/2029 | | | | | | | 19,061 | | | | 336.63 | | | | 6/3/2029 | |
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| | | | Option Awards | Name | | | Number of Securities Underlying Unexercised Options: Exercisable (#) | | Option Exercise Price ($) | | Option Expiration Date | | Reed Hastings | | | | 17,130 | | | | 374.60 | | | | 7/1/2029 | | | | | Option Awards | | | | 20,083 | | | | 319.50 | | | | 8/1/2029 | | | Name | | Number of Securities Underlying Unexercised Options: Exercisable | | Option Exercise Price ($) | | Option Expiration Date | | | Reed Hastings | | 23,996 | | | $ | 52.0986 | | | 4/1/2024 | | | Reed Hastings | | 25,998 | | | $ | 48.0743 | | | 5/1/2024 | | | Reed Hastings | | 20,734 | | | $ | 60.2943 | | | 6/2/2024 | | | Reed Hastings | | 18,494 | | | $ | 67.5857 | | | 7/1/2024 | | | Reed Hastings | | 20,566 | | | $ | 60.7714 | | | 8/1/2024 | | | Reed Hastings | | 18,361 | | | $ | 68.0857 | | | 9/2/2024 | | | Reed Hastings | | 19,943 | | | $ | 62.6857 | | | 10/1/2024 | | | Reed Hastings | | 22,526 | | | $ | 55.4871 | | | 11/3/2024 | | | Reed Hastings | | 25,599 | | | $ | 48.8300 | | | 12/1/2024 | | | Reed Hastings | | 25,074 | | | $ | 49.8486 | | | 1/2/2025 | | | Reed Hastings | | 45,290 | | | $ | 63.0100 | | | 2/2/2025 | | | Reed Hastings | | 41,601 | | | $ | 68.6071 | | | 3/2/2025 | | | Reed Hastings | | 48,363 | | | $ | 59.0171 | | | 4/1/2025 | | | Reed Hastings | | 35,868 | | | $ | 79.5757 | | | 5/1/2025 | | | Reed Hastings | | 32,067 | | | $ | 89.0029 | | | 6/1/2025 | | | Reed Hastings | | 30,485 | | | $ | 93.6357 | | | 7/1/2025 | | | Reed Hastings | | 25,360 | | | $ | 112.5600 | | | 8/3/2025 | | | Reed Hastings | | 26,977 | | | $ | 105.7900 | | | 9/1/2025 | | | Reed Hastings | | 26,933 | | | $ | 105.9800 | | | 10/1/2025 | | | Reed Hastings | | 26,513 | | | $ | 107.6400 | | | 11/2/2025 | | | Reed Hastings | | 22,765 | | | $ | 125.3700 | | | 12/1/2025 | | | Reed Hastings | | 25,959 | | | $ | 109.9600 | | | 1/4/2026 | | | Reed Hastings | | 42,176 | | | $ | 94.0900 | | | 2/1/2026 | | | Reed Hastings | | 40,374 | | | $ | 98.3000 | | | 3/1/2026 | | | Reed Hastings | | 37,547 | | | $ | 105.7000 | | | 4/1/2026 | | | Reed Hastings | | 42,629 | | | $ | 93.1100 | | | 5/2/2026 | | | Reed Hastings | | 39,097 | | | $ | 101.5100 | | | 6/1/2026 | | | Reed Hastings | | 41,055 | | | $ | 96.6700 | | | 7/1/2026 | | | Reed Hastings | | 42,055 | | | $ | 94.3700 | | | 8/1/2026 | | | Reed Hastings | | 40,755 | | | $ | 97.3800 | | | 9/1/2026 | | | Reed Hastings | | 38,670 | | | $ | 102.6300 | | | 10/3/2026 | | | Reed Hastings | | 32,188 | | | $ | 123.3000 | | | 11/1/2026 | | | Reed Hastings | | 33,857 | | | $ | 117.2200 | | | 12/1/2026 | | | Reed Hastings | | 31,130 | | | $ | 127.4900 | | | 1/3/2027 | | | Reed Hastings | | 31,373 | | | $ | 140.7800 | | | 2/1/2027 | | | Reed Hastings | | 30,961 | | | $ | 142.6500 | | | 3/1/2027 | | | Reed Hastings | | 30,062 | | | $ | 146.9200 | | | 4/3/2027 | | | Reed Hastings | | 28,431 | | | $ | 155.3500 | | | 5/1/2027 | | | Reed Hastings | | 27,097 | | | $ | 162.9900 | | | 6/1/2027 | | | | | | | 22,181 | | | | 289.29 | | | | 9/3/2029 | | | | | | | 23,802 | | | | 269.58 | | | | 10/1/2029 | | | | | | | 22,373 | | | | 286.81 | | | | 11/1/2029 | | | | | | | 20,699 | | | | 309.99 | | | | 12/2/2029 | | | | | | | 19,456 | | | | 329.81 | | | | 1/2/2030 | | | | | | | 19,786 | | | | 358.00 | | | | 2/3/2030 | | | | | | | 18,589 | | | | 381.05 | | | | 3/2/2030 | | | | | | | 19,455 | | | | 364.08 | | | | 4/1/2030 | | | | | | | 17,057 | | | | 415.27 | | | | 5/1/2030 | | | | | | | 16,631 | | | | 425.92 | | | | 6/1/2030 | | | | | | | 14,585 | | | | 485.64 | | | | 7/1/2030 | | | | | | | 14,206 | | | | 498.62 | | | | 8/3/2030 | | | | | | | 12,727 | | | | 556.55 | | | | 9/1/2030 | | | | | | | 13,428 | | | | 527.51 | | | | 10/1/2030 | | | | | | | 14,632 | | | | 484.12 | | | | 11/2/2030 | | | | | | | 14,038 | | | | 504.58 | | | | 12/1/2030 | | | Ted Sarandos | | | | 25,130 | | | | 79.58 | | | | 5/1/2025 | | | | | | | 22,470 | | | | 89.00 | | | | 6/1/2025 | | | | | | | 21,357 | | | | 93.64 | | | | 7/1/2025 | | | | | | | 15,952 | | | | 125.37 | | | | 12/1/2025 | | | | | | | 26,125 | | | | 94.09 | | | | 2/1/2026 | | | | | | | 25,008 | | | | 98.30 | | | | 3/1/2026 | | | | | | | 26,405 | | | | 93.11 | | | | 5/2/2026 | | | | | | | 25,430 | | | | 96.67 | | | | 7/1/2026 | | | | | | | 26,050 | | | | 94.37 | | | | 8/1/2026 | | | | | | | 25,245 | | | | 97.38 | | | | 9/1/2026 | | | | | | | 19,282 | | | | 127.49 | | | | 1/3/2027 | | | | | | | 16,279 | | | | 140.78 | | | | 2/1/2027 | | | | | | | 15,679 | | | | 146.17 | | | | 7/3/2027 | | | | | | | 8,248 | | | | 359.93 | | | | 6/1/2028 | | | | | | | 7,456 | | | | 398.18 | | | | 7/2/2028 | | | | | | | 8,773 | | | | 338.38 | | | | 8/1/2028 | | | | | | | 8,165 | | | | 363.60 | | | | 9/4/2028 | | | | | | | 7,783 | | | | 381.43 | | | | 10/1/2028 | | | | | | | 9,354 | | | | 317.38 | | | | 11/1/2028 | | | | | | | 10,227 | | | | 290.30 | | | | 12/3/2028 | | | | | | | 11,091 | | | | 267.66 | | | | 1/2/2029 | | | | | | | 8,276 | | | | 339.85 | | | | 2/1/2029 | | | | | | | 7,871 | | | | 357.32 | | | | 3/1/2029 | | | | | | | 7,664 | | | | 366.96 | | | | 4/1/2029 | | | | | | | 7,425 | | | | 378.81 | | | | 5/1/2029 | | | | | | | 8,355 | | | | 336.63 | | | | 6/3/2029 | | | | | | | 7,508 | | | | 374.60 | | | | 7/1/2029 | | | | | | | 8,802 | | | | 319.50 | | | | 8/1/2029 | |
56
| | | | | | | | | | | | | | | Option Awards | | | | | | Name | | Number of Securities Underlying Unexercised Options: Exercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | Reed Hastings | | | 30,216 | | | $ | 146.1700 | | | | 7/3/2027 | | Reed Hastings | | | 24,264 | | | $ | 182.0300 | | | | 8/1/2027 | | Reed Hastings | | | 25,275 | | | $ | 174.7400 | | | | 9/1/2027 | | Reed Hastings | | | 24,952 | | | $ | 177.0100 | | | | 10/2/2027 | | Reed Hastings | | | 22,306 | | | $ | 198.0000 | | | | 11/1/2027 | | Reed Hastings | | | 23,641 | | | $ | 186.8200 | | | | 12/1/2027 | | Neil Hunt | | | 3,806 | | | $ | 28.5914 | | | | 12/1/2020 | | Neil Hunt | | | 7,084 | | | $ | 25.4871 | | | | 1/3/2021 | | Neil Hunt | | | 12,327 | | | $ | 30.4143 | | | | 2/1/2021 | | Neil Hunt | | | 12,831 | | | $ | 29.2329 | | | | 3/1/2021 | | Neil Hunt | | | 10,843 | | | $ | 34.5843 | | | | 4/1/2021 | | Neil Hunt | | | 11,067 | | | $ | 33.8843 | | | | 5/2/2021 | | Neil Hunt | | | 9,821 | | | $ | 38.1800 | | | | 6/1/2021 | | Neil Hunt | | | 9,793 | | | $ | 38.2843 | | | | 7/1/2021 | | Neil Hunt | | | 9,968 | | | $ | 37.6257 | | | | 8/1/2021 | | Neil Hunt | | | 11,256 | | | $ | 33.3243 | | | | 9/1/2021 | | Neil Hunt | | | 23,177 | | | $ | 16.1786 | | | | 10/3/2021 | | Neil Hunt | | | 35,581 | | | $ | 17.5671 | | | | 2/1/2022 | | Neil Hunt | | | 38,801 | | | $ | 16.1071 | | | | 3/1/2022 | | Neil Hunt | | | 38,388 | | | $ | 16.2814 | | | | 4/2/2022 | | Neil Hunt | | | 3,931 | | | $ | 13.1443 | | | | 1/2/2023 | | Neil Hunt | | | 22,120 | | | $ | 23.5429 | | | | 2/1/2023 | | Neil Hunt | | | 19,250 | | | $ | 27.0529 | | | | 3/1/2023 | | Neil Hunt | | | 19,985 | | | $ | 26.0614 | | | | 4/1/2023 | | Neil Hunt | | | 17,122 | | | $ | 30.4157 | | | | 5/1/2023 | | Neil Hunt | | | 16,422 | | | $ | 31.7100 | | | | 6/3/2023 | | Neil Hunt | | | 16,254 | | | $ | 32.0400 | | | | 7/1/2023 | | Neil Hunt | | | 14,637 | | | $ | 35.5886 | | | | 8/1/2023 | | Neil Hunt | | | 12,614 | | | $ | 41.2857 | | | | 9/3/2023 | | Neil Hunt | | | 11,228 | | | $ | 46.3743 | | | | 10/1/2023 | | Neil Hunt | | | 11,074 | | | $ | 47.0386 | | | | 11/1/2023 | | Neil Hunt | | | 10,017 | | | $ | 51.9886 | | | | 12/2/2023 | | Neil Hunt | | | 10,052 | | | $ | 51.8314 | | | | 1/2/2024 | | Neil Hunt | | | 12,621 | | | $ | 57.7686 | | | | 2/3/2024 | | Neil Hunt | | | 11,452 | | | $ | 63.6557 | | | | 3/3/2024 | | Neil Hunt | | | 13,993 | | | $ | 52.0986 | | | | 4/1/2024 | | Neil Hunt | | | 15,169 | | | $ | 48.0743 | | | | 5/1/2024 | | Neil Hunt | | | 12,096 | | | $ | 60.2943 | �� | | | 6/2/2024 | | Neil Hunt | | | 10,787 | | | $ | 67.5857 | | | | 7/1/2024 | |
57
| | | | | | | | | | | | | | | Option Awards | | | | | | Name | | Number of Securities Underlying Unexercised Options: Exercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | Neil Hunt | | | 11,998 | | | $ | 60.7714 | | | | 8/1/2024 | | Neil Hunt | | | 10,710 | | | $ | 68.0857 | | | | 9/2/2024 | | Neil Hunt | | | 11,634 | | | $ | 62.6857 | | | | 10/1/2024 | | Neil Hunt | | | 13,139 | | | $ | 55.4871 | | | | 11/3/2024 | | Neil Hunt | | | 14,931 | | | $ | 48.8300 | | | | 12/1/2024 | | Neil Hunt | | | 14,630 | | | $ | 49.8486 | | | | 1/2/2025 | | Neil Hunt | | | 6,195 | | | $ | 63.0100 | | | | 2/2/2025 | | Neil Hunt | | | 5,691 | | | $ | 68.6071 | | | | 3/2/2025 | | Neil Hunt | | | 6,622 | | | $ | 59.0171 | | | | 4/1/2025 | | Neil Hunt | | | 4,907 | | | $ | 79.5757 | | | | 5/1/2025 | | Neil Hunt | | | 4,389 | | | $ | 89.0029 | | | | 6/1/2025 | | Neil Hunt | | | 4,172 | | | $ | 93.6357 | | | | 7/1/2025 | | Neil Hunt | | | 3,476 | | | $ | 112.5600 | | | | 8/3/2025 | | Neil Hunt | | | 3,692 | | | $ | 105.7900 | | | | 9/1/2025 | | Neil Hunt | | | 3,686 | | | $ | 105.9800 | | | | 10/1/2025 | | Neil Hunt | | | 3,629 | | | $ | 107.6400 | | | | 11/2/2025 | | Neil Hunt | | | 3,115 | | | $ | 125.3700 | | | | 12/1/2025 | | Neil Hunt | | | 3,553 | | | $ | 109.9600 | | | | 1/4/2026 | | Neil Hunt | | | 4,760 | | | $ | 94.0900 | | | | 2/1/2026 | | Neil Hunt | | | 4,557 | | | $ | 98.3000 | | | | 3/1/2026 | | Neil Hunt | | | 4,237 | | | $ | 105.7000 | | | | 4/1/2026 | | Neil Hunt | | | 4,812 | | | $ | 93.1100 | | | | 5/2/2026 | | Neil Hunt | | | 4,412 | | | $ | 101.5100 | | | | 6/1/2026 | | Neil Hunt | | | 4,634 | | | $ | 96.6700 | | | | 7/1/2026 | | Neil Hunt | | | 4,746 | | | $ | 94.3700 | | | | 8/1/2026 | | Neil Hunt | | | 4,600 | | | $ | 97.3800 | | | | 9/1/2026 | | Neil Hunt | | | 4,364 | | | $ | 102.6300 | | | | 10/3/2026 | | Neil Hunt | | | 3,633 | | | $ | 123.3000 | | | | 11/1/2026 | | Neil Hunt | | | 3,821 | | | $ | 117.2200 | | | | 12/1/2026 | | Neil Hunt | | | 3,513 | | | $ | 127.4900 | | | | 1/3/2027 | | Neil Hunt | | | 3,567 | | | $ | 140.7800 | | | | 2/1/2027 | | Neil Hunt | | | 3,519 | | | $ | 142.6500 | | | | 3/1/2027 | | Neil Hunt | | | 3,418 | | | $ | 146.9200 | | | | 4/3/2027 | | Neil Hunt | | | 3,232 | | | $ | 155.3500 | | | | 5/1/2027 | | Neil Hunt | | | 3,080 | | | $ | 162.9900 | | | | 6/1/2027 | | David Hyman | | | 4,669 | | | $ | 10.7143 | | | | 4/1/2020 | | David Hyman | | | 3,430 | | | $ | 14.5700 | | | | 5/3/2020 | | David Hyman | | | 3,262 | | | $ | 15.3271 | | | | 6/1/2020 | | David Hyman | | | 3,192 | | | $ | 15.6657 | | | | 7/1/2020 | |
58
| | | | | | | | | | | | | | | Option Awards | | | | | | Name | | Number of Securities Underlying Unexercised Options: Exercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | David Hyman | | | 3,437 | | | $ | 14.5543 | | | | 8/2/2020 | | David Hyman | | | 2,597 | | | $ | 19.2729 | | | | 9/1/2020 | | David Hyman | | | 2,261 | | | $ | 22.0943 | | | | 10/1/2020 | | David Hyman | | | 2,093 | | | $ | 23.9100 | | | | 11/1/2020 | | David Hyman | | | 1,750 | | | $ | 28.5914 | | | | 12/1/2020 | | David Hyman | | | 12,285 | | | $ | 16.2814 | | | | 4/2/2022 | | David Hyman | | | 5,145 | | | $ | 60.7714 | | | | 8/1/2024 | | David Hyman | | | 4,592 | | | $ | 68.0857 | | | | 9/2/2024 | | David Hyman | | | 4,984 | | | $ | 62.6857 | | | | 10/1/2024 | | David Hyman | | | 5,635 | | | $ | 55.4871 | | | | 11/3/2024 | | David Hyman | | | 6,398 | | | $ | 48.8300 | | | | 12/1/2024 | | David Hyman | | | 6,272 | | | $ | 49.8486 | | | | 1/2/2025 | | David Hyman | | | 3,962 | | | $ | 63.0100 | | | | 2/2/2025 | | David Hyman | | | 3,647 | | | $ | 68.6071 | | | | 3/2/2025 | | David Hyman | | | 4,235 | | | $ | 59.0171 | | | | 4/1/2025 | | David Hyman | | | 3,143 | | | $ | 79.5757 | | | | 5/1/2025 | | David Hyman | | | 2,807 | | | $ | 89.0029 | | | | 6/1/2025 | | David Hyman | | | 2,667 | | | $ | 93.6357 | | | | 7/1/2025 | | David Hyman | | | 2,221 | | | $ | 112.5600 | | | | 8/3/2025 | | David Hyman | | | 2,363 | | | $ | 105.7900 | | | | 9/1/2025 | | David Hyman | | | 2,359 | | | $ | 105.9800 | | | | 10/1/2025 | | David Hyman | | | 2,322 | | | $ | 107.6400 | | | | 11/2/2025 | | David Hyman | | | 1,994 | | | $ | 125.3700 | | | | 12/1/2025 | | David Hyman | | | 2,274 | | | $ | 109.9600 | | | | 1/4/2026 | | David Hyman | | | 4,439 | | | $ | 94.0900 | | | | 2/1/2026 | | David Hyman | | | 4,249 | | | $ | 98.3000 | | | | 3/1/2026 | | David Hyman | | | 3,952 | | | $ | 105.7000 | | | | 4/1/2026 | | David Hyman | | | 4,487 | | | $ | 93.1100 | | | | 5/2/2026 | | David Hyman | | | 4,115 | | | $ | 101.5100 | | | | 6/1/2026 | | David Hyman | | | 4,321 | | | $ | 96.6700 | | | | 7/1/2026 | | David Hyman | | | 4,426 | | | $ | 94.3700 | | | | 8/1/2026 | | David Hyman | | | 4,290 | | | $ | 97.3800 | | | | 9/1/2026 | | David Hyman | | | 4,070 | | | $ | 102.6300 | | | | 10/3/2026 | | David Hyman | | | 3,387 | | | $ | 123.3000 | | | | 11/1/2026 | | David Hyman | | | 3,564 | | | $ | 117.2200 | | | | 12/1/2026 | | David Hyman | | | 3,276 | | | $ | 127.4900 | | | | 1/3/2027 | | David Hyman | | | 1,798 | | | $ | 140.7800 | | | | 2/1/2027 | | David Hyman | | | 1,775 | | | $ | 142.6500 | | | | 3/1/2027 | | David Hyman | | | 1,722 | | | $ | 146.9200 | | | | 4/3/2027 | |
59
| | | | | | | | | | | | | | | Option Awards | | | | | | Name | | Number of Securities Underlying Unexercised Options: Exercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | David Hyman | | | 1,630 | | | $ | 155.3500 | | | | 5/1/2027 | | David Hyman | | | 1,553 | | | $ | 162.9900 | | | | 6/1/2027 | | David Hyman | | | 1,732 | | | $ | 146.1700 | | | | 7/3/2027 | | David Hyman | | | 1,390 | | | $ | 182.0300 | | | | 8/1/2027 | | David Hyman | | | 1,449 | | | $ | 174.7400 | | | | 9/1/2027 | | David Hyman | | | 1,430 | | | $ | 177.0100 | | | | 10/2/2027 | | David Hyman | | | 1,278 | | | $ | 198.0000 | | | | 11/1/2027 | | David Hyman | | | 1,355 | | | $ | 186.8200 | | | | 12/1/2027 | | Greg Peters | | | 8,533 | | | $ | 48.8300 | | | | 12/1/2024 | | Greg Peters | | | 8,358 | | | $ | 49.8486 | | | | 1/2/2025 | | Greg Peters | | | 9,009 | | | $ | 63.0100 | | | | 2/2/2025 | | Greg Peters | | | 8,274 | | | $ | 68.6071 | | | | 3/2/2025 | | Greg Peters | | | 9,618 | | | $ | 59.0171 | | | | 4/1/2025 | | Greg Peters | | | 7,133 | | | $ | 79.5757 | | | | 5/1/2025 | | Greg Peters | | | 6,377 | | | $ | 89.0029 | | | | 6/1/2025 | | Greg Peters | | | 6,062 | | | $ | 93.6357 | | | | 7/1/2025 | | Greg Peters | | | 5,047 | | | $ | 112.5600 | | | | 8/3/2025 | | Greg Peters | | | 5,366 | | | $ | 105.7900 | | | | 9/1/2025 | | Greg Peters | | | 5,357 | | | $ | 105.9800 | | | | 10/1/2025 | | Greg Peters | | | 5,274 | | | $ | 107.6400 | | | | 11/2/2025 | | Greg Peters | | | 4,528 | | | $ | 125.3700 | | | | 12/1/2025 | | Greg Peters | | | 5,163 | | | $ | 109.9600 | | | | 1/4/2026 | | Greg Peters | | | 7,251 | | | $ | 94.0900 | | | | 2/1/2026 | | Greg Peters | | | 6,941 | | | $ | 98.3000 | | | | 3/1/2026 | | Greg Peters | | | 6,455 | | | $ | 105.7000 | | | | 4/1/2026 | | Greg Peters | | | 7,329 | | | $ | 93.1100 | | | | 5/2/2026 | | Greg Peters | | | 6,721 | | | $ | 101.5100 | | | | 6/1/2026 | | Greg Peters | | | 7,058 | | | $ | 96.6700 | | | | 7/1/2026 | | Greg Peters | | | 7,230 | | | $ | 94.3700 | | | | 8/1/2026 | | Greg Peters | | | 7,007 | | | $ | 97.3800 | | | | 9/1/2026 | | Greg Peters | | | 6,648 | | | $ | 102.6300 | | | | 10/3/2026 | | Greg Peters | | | 5,533 | | | $ | 123.3000 | | | | 11/1/2026 | | Greg Peters | | | 5,821 | | | $ | 117.2200 | | | | 12/1/2026 | | Greg Peters | | | 5,352 | | | $ | 127.4900 | | | | 1/3/2027 | | Greg Peters | | | 4,846 | | | $ | 140.7800 | | | | 2/1/2027 | | Greg Peters | | | 4,783 | | | $ | 142.6500 | | | | 3/1/2027 | | Greg Peters | | | 4,644 | | | $ | 146.9200 | | | | 4/3/2027 | | Greg Peters | | | 4,392 | | | $ | 155.3500 | | | | 5/1/2027 | | Greg Peters | | | 4,186 | | | $ | 162.9900 | | | | 6/1/2027 | |
60
| | | | | | | | | | | | | | | Option Awards | | | | | | Name | | Number of Securities Underlying Unexercised Options: Exercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | Greg Peters | | | 4,668 | | | $ | 146.1700 | | | | 7/3/2027 | | Greg Peters | | | 3,891 | | | $ | 182.0300 | | | | 8/1/2027 | | Greg Peters | | | 4,054 | | | $ | 174.7400 | | | | 9/1/2027 | | Greg Peters | | | 4,001 | | | $ | 177.0100 | | | | 10/2/2027 | | Greg Peters | | | 3,578 | | | $ | 198.0000 | | | | 11/1/2027 | | Greg Peters | | | 3,791 | | | $ | 186.8200 | | | | 12/1/2027 | | Theodore Sarandos | | | 25,130 | | | $ | 79.5757 | | | | 5/1/2025 | | Theodore Sarandos | | | 22,470 | | | $ | 89.0029 | | | | 6/1/2025 | | Theodore Sarandos | | | 21,357 | | | $ | 93.6357 | | | | 7/1/2025 | | Theodore Sarandos | | | 17,773 | | | $ | 112.5600 | | | | 8/3/2025 | | Theodore Sarandos | | | 18,904 | | | $ | 105.7900 | | | | 9/1/2025 | | Theodore Sarandos | | | 18,872 | | | $ | 105.9800 | | | | 10/1/2025 | | Theodore Sarandos | | | 18,579 | | | $ | 107.6400 | | | | 11/2/2025 | | Theodore Sarandos | | | 15,952 | | | $ | 125.3700 | | | | 12/1/2025 | | Theodore Sarandos | | | 18,190 | | | $ | 109.9600 | | | | 1/4/2026 | | Theodore Sarandos | | | 26,125 | | | $ | 94.0900 | | | | 2/1/2026 | | Theodore Sarandos | | | 25,008 | | | $ | 98.3000 | | | | 3/1/2026 | | Theodore Sarandos | | | 23,258 | | | $ | 105.7000 | | | | 4/1/2026 | | Theodore Sarandos | | | 26,405 | | | $ | 93.1100 | | | | 5/2/2026 | | Theodore Sarandos | | | 24,218 | | | $ | 101.5100 | | | | 6/1/2026 | | Theodore Sarandos | | | 25,430 | | | $ | 96.6700 | | | | 7/1/2026 | | Theodore Sarandos | | | 26,050 | | | $ | 94.3700 | | | | 8/1/2026 | | Theodore Sarandos | | | 25,245 | | | $ | 97.3800 | | | | 9/1/2026 | | Theodore Sarandos | | | 23,953 | | | $ | 102.6300 | | | | 10/3/2026 | | Theodore Sarandos | | | 19,938 | | | $ | 123.3000 | | | | 11/1/2026 | | Theodore Sarandos | | | 20,972 | | | $ | 117.2200 | | | | 12/1/2026 | | Theodore Sarandos | | | 19,282 | | | $ | 127.4900 | | | | 1/3/2027 | | Theodore Sarandos | | | 16,279 | | | $ | 140.7800 | | | | 2/1/2027 | | Theodore Sarandos | | | 16,065 | | | $ | 142.6500 | | | | 3/1/2027 | | Theodore Sarandos | | | 15,598 | | | $ | 146.9200 | | | | 4/3/2027 | | Theodore Sarandos | | | 14,751 | | | $ | 155.3500 | | | | 5/1/2027 | | Theodore Sarandos | | | 14,060 | | | $ | 162.9900 | | | | 6/1/2027 | | Theodore Sarandos | | | 15,679 | | | $ | 146.1700 | | | | 7/3/2027 | | Theodore Sarandos | | | 12,589 | | | $ | 182.0300 | | | | 8/1/2027 | | Theodore Sarandos | | | 13,115 | | | $ | 174.7400 | | | | 9/1/2027 | | Theodore Sarandos | | | 12,946 | | | $ | 177.0100 | | | | 10/2/2027 | | Theodore Sarandos | | | 11,574 | | | $ | 198.0000 | | | | 11/1/2027 | | Theodore Sarandos | | | 12,267 | | | $ | 186.8200 | | | | 12/1/2027 | | David Wells | | | 420 | | | $ | 27.0529 | | | | 3/1/2023 | |
61
| | | | | | | | | | | | | | | Option Awards | | | | | | Name | | Number of Securities Underlying Unexercised Options: Exercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | David Wells | | | 5,278 | | | $ | 26.0614 | | | | 4/1/2023 | | David Wells | | | 4,522 | | | $ | 30.4157 | | | | 5/1/2023 | | David Wells | | | 4,333 | | | $ | 31.7100 | | | | 6/3/2023 | | David Wells | | | 4,291 | | | $ | 32.0400 | | | | 7/1/2023 | | David Wells | | | 3,864 | | | $ | 35.5886 | | | | 8/1/2023 | | David Wells | | | 3,332 | | | $ | 41.2857 | | | | 9/3/2023 | | David Wells | | | 2,968 | | | $ | 46.3743 | | | | 10/1/2023 | | David Wells | | | 2,926 | | | $ | 47.0386 | | | | 11/1/2023 | | David Wells | | | 2,646 | | | $ | 51.9886 | | | | 12/2/2023 | | David Wells | | | 2,653 | | | $ | 51.8314 | | | | 1/2/2024 | | David Wells | | | 3,969 | | | $ | 57.7686 | | | | 2/3/2024 | | David Wells | | | 3,598 | | | $ | 63.6557 | | | | 3/3/2024 | | David Wells | | | 4,396 | | | $ | 52.0986 | | | | 4/1/2024 | | David Wells | | | 4,767 | | | $ | 48.0743 | | | | 5/1/2024 | | David Wells | | | 3,801 | | | $ | 60.2943 | | | | 6/2/2024 | | David Wells | | | 3,388 | | | $ | 67.5857 | | | | 7/1/2024 | | David Wells | | | 3,773 | | | $ | 60.7714 | | | | 8/1/2024 | | David Wells | | | 3,367 | | | $ | 68.0857 | | | | 9/2/2024 | | David Wells | | | 3,654 | | | $ | 62.6857 | | | | 10/1/2024 | | David Wells | | | 4,130 | | | $ | 55.4871 | | | | 11/3/2024 | | David Wells | | | 4,690 | | | $ | 48.8300 | | | | 12/1/2024 | | David Wells | | | 4,599 | | | $ | 49.8486 | | | | 1/2/2025 | | David Wells | | | 5,537 | | | $ | 63.0100 | | | | 2/2/2025 | | David Wells | | | 5,082 | | | $ | 68.6071 | | | | 3/2/2025 | | David Wells | | | 5,915 | | | $ | 59.0171 | | | | 4/1/2025 | | David Wells | | | 4,382 | | | $ | 79.5757 | | | | 5/1/2025 | | David Wells | | | 3,920 | | | $ | 89.0029 | | | | 6/1/2025 | | David Wells | | | 3,731 | | | $ | 93.6357 | | | | 7/1/2025 | | David Wells | | | 3,101 | | | $ | 112.5600 | | | | 8/3/2025 | | David Wells | | | 3,298 | | | $ | 105.7900 | | | | 9/1/2025 | | David Wells | | | 3,293 | | | $ | 105.9800 | | | | 10/1/2025 | | David Wells | | | 3,241 | | | $ | 107.6400 | | | | 11/2/2025 | | David Wells | | | 2,784 | | | $ | 125.3700 | | | | 12/1/2025 | | David Wells | | | 3,173 | | | $ | 109.9600 | | | | 1/4/2026 | | David Wells | | | 3,986 | | | $ | 94.0900 | | | | 2/1/2026 | | David Wells | | | 3,814 | | | $ | 98.3000 | | | | 3/1/2026 | | David Wells | | | 3,548 | | | $ | 105.7000 | | | | 4/1/2026 | | David Wells | | | 4,028 | | | $ | 93.1100 | | | | 5/2/2026 | | David Wells | | | 3,694 | | | $ | 101.5100 | | | | 6/1/2026 | |
62
| | | | | | | | | | | | | | | Option Awards | | | | | | Name | | Number of Securities Underlying Unexercised Options: Exercisable | | | Option Exercise Price ($) | | | Option Expiration Date | | David Wells | | | 3,880 | | | $ | 96.6700 | | | | 7/1/2026 | | David Wells | | | 3,973 | | | $ | 94.3700 | | | | 8/1/2026 | | David Wells | | | 3,851 | | | $ | 97.3800 | | | | 9/1/2026 | | David Wells | | | 3,654 | | | $ | 102.6300 | | | | 10/3/2026 | | David Wells | | | 3,041 | | | $ | 123.3000 | | | | 11/1/2026 | | David Wells | | | 3,199 | | | $ | 117.2200 | | | | 12/1/2026 | | David Wells | | | 2,942 | | | $ | 127.4900 | | | | 1/3/2027 | | David Wells | | | 2,826 | | | $ | 140.7800 | | | | 2/1/2027 | | David Wells | | | 2,790 | | | $ | 142.6500 | | | | 3/1/2027 | | David Wells | | | 2,708 | | | $ | 146.9200 | | | | 4/3/2027 | | David Wells | | | 2,562 | | | $ | 155.3500 | | | | 5/1/2027 | | David Wells | | | 2,441 | | | $ | 162.9900 | | | | 6/1/2027 | | David Wells | | | 2,722 | | | $ | 146.1700 | | | | 7/3/2027 | | David Wells | | | 2,186 | | | $ | 182.0300 | | | | 8/1/2027 | | David Wells | | | 2,277 | | | $ | 174.7400 | | | | 9/1/2027 | | David Wells | | | 2,248 | | | $ | 177.0100 | | | | 10/2/2027 | | David Wells | | | 2,010 | | | $ | 198.0000 | | | | 11/1/2027 | | David Wells | | | 2,130 | | | $ | 186.8200 | | | | 12/1/2027 | |
63
Options Exercises
| | | | | | | | | | | | | | | | | | Option Awards | Name | | Number of Securities Underlying Unexercised Options: Exercisable (#) | | Option Exercise Price ($) | | Option Expiration Date | | | | | Ted Sarandos | | | | 9,723 | | | | | 289.29 | | | | | 9/3/2029 | | | | | | | | | | 10,433 | | | | | 269.58 | | | | | 10/1/2029 | | | | | | | | | | 9,806 | | | | | 286.81 | | | | | 11/1/2029 | | | | | | | | | | 9,073 | | | | | 309.99 | | | | | 12/2/2029 | | | | | | | | | | 8,527 | | | | | 329.81 | | | | | 1/2/2030 | | | | | | | | | | 8,525 | | | | | 358.00 | | | | | 2/3/2030 | | | | | | | | | | 8,010 | | | | | 381.05 | | | | | 3/2/2030 | | | | | | | | | | 8,383 | | | | | 364.08 | | | | | 4/1/2030 | | | | | | | | | | 7,350 | | | | | 415.27 | | | | | 5/1/2030 | | | | | | | | | | 7,166 | | | | | 425.92 | | | | | 6/1/2030 | | | | | | | | | | 6,284 | | | | | 485.64 | | | | | 7/1/2030 | | | | | | | | | | 6,121 | | | | | 498.62 | | | | | 8/3/2030 | | | | | | | | | | 5,484 | | | | | 556.55 | | | | | 9/1/2030 | | | | | | | | | | 5,786 | | | | | 527.51 | | | | | 10/1/2030 | | | | | | | | | | 6,304 | | | | | 484.12 | | | | | 11/2/2030 | | | | | | | | | | 6,049 | | | | | 504.58 | | | | | 12/1/2030 | | | | | | Spencer Neumann | | | | 1,308 | | | | | 339.85 | | | | | 2/1/2029 | | | | | | | | | | 2,916 | | | | | 357.32 | | | | | 3/1/2029 | | | | | | | | | | 2,838 | | | | | 366.96 | | | | | 4/1/2029 | | | | | | | | | | 2,750 | | | | | 378.81 | | | | | 5/1/2029 | | | | | | | | | | 3,095 | | | | | 336.63 | | | | | 6/3/2029 | | | | | | | | | | 2,781 | | | | | 374.60 | | | | | 7/1/2029 | | | | | | | | | | 3,260 | | | | | 319.50 | | | | | 8/1/2029 | | | | | | | | | | 3,601 | | | | | 289.29 | | | | | 9/3/2029 | | | | | | | | | | 3,864 | | | | | 269.58 | | | | | 10/1/2029 | | | | | | | | | | 3,632 | | | | | 286.81 | | | | | 11/1/2029 | | | | | | | | | | 3,361 | | | | | 309.99 | | | | | 12/2/2029 | | | | | | | | | | 3,158 | | | | | 329.81 | | | | | 1/2/2030 | | | | | | | | | | 3,201 | | | | | 358.00 | | | | | 2/3/2030 | | | | | | | | | | 3,007 | | | | | 381.05 | | | | | 3/2/2030 | | | | | | | | | | 3,147 | | | | | 364.08 | | | | | 4/1/2030 | | | | | | | | | | 2,759 | | | | | 415.27 | | | | | 5/1/2030 | | | | | | | | | | 2,690 | | | | | 425.92 | | | | | 6/1/2030 | | | | | | | | | | 2,360 | | | | | 485.64 | | | | | 7/1/2030 | | | | | | | | | | 2,298 | | | | | 498.62 | | | | | 8/3/2030 | | | | | | | | | | 2,058 | | | | | 556.55 | | | | | 9/1/2030 | | | | | | | | | | 2,173 | | | | | 527.51 | | | | | 10/1/2030 | | | | | | | | | | 2,367 | | | | | 484.12 | | | | | 11/2/2030 | | | | | | | | | | 2,270 | | | | | 504.58 | | | | | 12/1/2030 | | | | | | Greg Peters | | | | 6,941 | | | | | 98.30 | | | | | 3/1/2026 | | | | | | | | | | 6,455 | | | | | 105.70 | | | | | 4/1/2026 | | | | | | | | | | 7,329 | | | | | 93.11 | | | | | 5/2/2026 | | | | | | | | | | 6,721 | | | | | 101.51 | | | | | 6/1/2026 | | | | | | | | | | 7,058 | | | | | 96.67 | | | | | 7/1/2026 | | | | | | | | | | 7,230 | | | | | 94.37 | | | | | 8/1/2026 | | | | | | | | | | 7,007 | | | | | 97.38 | | | | | 9/1/2026 | |
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| | | | | | | | | | | | | | | | | | Option Awards | Name | | Number of Securities Underlying Unexercised Options: Exercisable (#) | | Option Exercise Price ($) | | Option Expiration Date | | | | | Greg Peters | | | | 6,648 | | | | | 102.63 | | | | | 10/3/2026 | | | | | | | | | | 5,533 | | | | | 123.30 | | | | | 11/1/2026 | | | | | | | | | | 5,821 | | | | | 117.22 | | | | | 12/1/2026 | | | | | | | | | | 5,352 | | | | | 127.49 | | | | | 1/3/2027 | | | | | | | | | | 4,846 | | | | | 140.78 | | | | | 2/1/2027 | | | | | | | | | | 4,783 | | | | | 142.65 | | | | | 3/1/2027 | | | | | | | | | | 4,644 | | | | | 146.92 | | | | | 4/3/2027 | | | | | | | | | | 4,392 | | | | | 155.35 | | | | | 5/1/2027 | | | | | | | | | | 4,186 | | | | | 162.99 | | | | | 6/1/2027 | | | | | | | | | | 4,668 | | | | | 146.17 | | | | | 7/3/2027 | | | | | | | | | | 3,891 | | | | | 182.03 | | | | | 8/1/2027 | | | | | | | | | | 4,054 | | | | | 174.74 | | | | | 9/1/2027 | | | | | | | | | | 4,001 | | | | | 177.01 | | | | | 10/2/2027 | | | | | | | | | | 3,578 | | | | | 198.00 | | | | | 11/1/2027 | | | | | | | | | | 3,791 | | | | | 186.82 | | | | | 12/1/2027 | | | | | | | | | | 3,523 | | | | | 201.07 | | | | | 1/2/2028 | | | | | | | | | | 5,187 | | | | | 265.07 | | | | | 2/1/2028 | | | | | | | | | | 4,735 | | | | | 290.39 | | | | | 3/1/2028 | | | | | | | | | | 4,906 | | | | | 280.29 | | | | | 4/2/2028 | | | | | | | | | | 4,389 | | | | | 313.30 | | | | | 5/1/2028 | | | | | | | | | | 3,820 | | | | | 359.93 | | | | | 6/1/2028 | | | | | | | | | | 3,453 | | | | | 398.18 | | | | | 7/2/2028 | | | | | | | | | | 4,063 | | | | | 338.38 | | | | | 8/1/2028 | | | | | | | | | | 3,782 | | | | | 363.60 | | | | | 9/4/2028 | | | | | | | | | | 3,605 | | | | | 381.43 | | | | | 10/1/2028 | | | | | | | | | | 4,332 | | | | | 317.38 | | | | | 11/1/2028 | | | | | | | | | | 4,737 | | | | | 290.30 | | | | | 12/3/2028 | | | | | | | | | | 5,137 | | | | | 267.66 | | | | | 1/2/2029 | | | | | | | | | | 4,168 | | | | | 339.85 | | | | | 2/1/2029 | | | | | | | | | | 3,965 | | | | | 357.32 | | | | | 3/1/2029 | | | | | | | | | | 3,861 | | | | | 366.96 | | | | | 4/1/2029 | | | | | | | | | | 3,739 | | | | | 378.81 | | | | | 5/1/2029 | | | | | | | | | | 4,209 | | | | | 336.63 | | | | | 6/3/2029 | | | | | | | | | | 3,782 | | | | | 374.60 | | | | | 7/1/2029 | | | | | | | | | | 4,434 | | | | | 319.50 | | | | | 8/1/2029 | | | | | | | | | | 4,897 | | | | | 289.29 | | | | | 9/3/2029 | | | | | | | | | | 5,255 | | | | | 269.58 | | | | | 10/1/2029 | | | | | | | | | | 4,939 | | | | | 286.81 | | | | | 11/1/2029 | | | | | | | | | | 4,570 | | | | | 309.99 | | | | | 12/2/2029 | | | | | | | | | | 4,296 | | | | | 329.81 | | | | | 1/2/2030 | | | | | | | | | | 4,015 | | | | | 358.00 | | | | | 2/3/2030 | | | | | | | | | | 3,772 | | | | | 381.05 | | | | | 3/2/2030 | | | | | | | | | | 3,949 | | | | | 364.08 | | | | | 4/1/2030 | | | | | | | | | | 3,461 | | | | | 415.27 | | | | | 5/1/2030 | | | | | | | | | | 3,375 | | | | | 425.92 | | | | | 6/1/2030 | | | | | | | | | | 2,960 | | | | | 485.64 | | | | | 7/1/2030 | |
| | | | | | | | | | | | | | | | | | Option Awards | Name | | Number of Securities Underlying Unexercised Options: Exercisable (#) | | Option Exercise Price ($) | | Option Expiration Date | | | | | Greg Peters | | | | 2,883 | | | | | 498.62 | | | | | 8/3/2030 | | | | | | | | | | 2,583 | | | | | 556.55 | | | | | 9/1/2030 | | | | | | | | | | 2,725 | | | | | 527.51 | | | | | 10/1/2030 | | | | | | | | | | 2,969 | | | | | 484.12 | | | | | 11/2/2030 | | | | | | | | | | 2,849 | | | | | 504.58 | | | | | 12/1/2030 | | | | | | David Hyman | | | | 6,272 | | | | | 49.85 | | | | | 1/2/2025 | | | | | | | | | | 3,962 | | | | | 63.01 | | | | | 2/2/2025 | | | | | | | | | | 3,647 | | | | | 68.61 | | | | | 3/2/2025 | | | | | | | | | | 4,235 | | | | | 59.02 | | | | | 4/1/2025 | | | | | | | | | | 3,143 | | | | | 79.58 | | | | | 5/1/2025 | | | | | | | | | | 2,807 | | | | | 89.00 | | | | | 6/1/2025 | | | | | | | | | | 2,667 | | | | | 93.64 | | | | | 7/1/2025 | | | | | | | | | | 2,221 | | | | | 112.56 | | | | | 8/3/2025 | | | | | | | | | | 2,363 | | | | | 105.79 | | | | | 9/1/2025 | | | | | | | | | | 2,359 | | | | | 105.98 | | | | | 10/1/2025 | | | | | | | | | | 2,322 | | | | | 107.64 | | | | | 11/2/2025 | | | | | | | | | | 1,994 | | | | | 125.37 | | | | | 12/1/2025 | | | | | | | | | | 2,274 | | | | | 109.96 | | | | | 1/4/2026 | | | | | | | | | | 4,439 | | | | | 94.09 | | | | | 2/1/2026 | | | | | | | | | | 4,249 | | | | | 98.30 | | | | | 3/1/2026 | | | | | | | | | | 3,952 | | | | | 105.70 | | | | | 4/1/2026 | | | | | | | | | | 4,487 | | | | | 93.11 | | | | | 5/2/2026 | | | | | | | | | | 4,115 | | | | | 101.51 | | | | | 6/1/2026 | | | | | | | | | | 4,321 | | | | | 96.67 | | | | | 7/1/2026 | | | | | | | | | | 4,426 | | | | | 94.37 | | | | | 8/1/2026 | | | | | | | | | | 4,290 | | | | | 97.38 | | | | | 9/1/2026 | | | | | | | | | | 4,070 | | | | | 102.63 | | | | | 10/3/2026 | | | | | | | | | | 3,387 | | | | | 123.30 | | | | | 11/1/2026 | | | | | | | | | | 3,564 | | | | | 117.22 | | | | | 12/1/2026 | | | | | | | | | | 3,276 | | | | | 127.49 | | | | | 1/3/2027 | | | | | | | | | | 1,798 | | | | | 140.78 | | | | | 2/1/2027 | | | | | | | | | | 1,775 | | | | | 142.65 | | | | | 3/1/2027 | | | | | | | | | | 1,722 | | | | | 146.92 | | | | | 4/3/2027 | | | | | | | | | | 1,630 | | | | | 155.35 | | | | | 5/1/2027 | | | | | | | | | | 1,553 | | | | | 162.99 | | | | | 6/1/2027 | | | | | | | | | | 1,732 | | | | | 146.17 | | | | | 7/3/2027 | | | | | | | | | | 1,390 | | | | | 182.03 | | | | | 8/1/2027 | | | | | | | | | | 1,449 | | | | | 174.74 | | | | | 9/1/2027 | | | | | | | | | | 1,430 | | | | | 177.01 | | | | | 10/2/2027 | | | | | | | | | | 1,278 | | | | | 198.00 | | | | | 11/1/2027 | | | | | | | | | | 1,355 | | | | | 186.82 | | | | | 12/1/2027 | | | | | | | | | | 1,259 | | | | | 201.07 | | | | | 1/2/2028 | | | | | | | | | | 2,574 | | | | | 265.07 | | | | | 2/1/2028 | | | | | | | | | | 2,349 | | | | | 290.39 | | | | | 3/1/2028 | | | | | | | | | | 2,435 | | | | | 280.29 | | | | | 4/2/2028 | | | | | | | | | | 2,177 | | | | | 313.30 | | | | | 5/1/2028 | |
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| | | | | | | | | | | | | | | | | | Option Awards | Name | | Number of Securities Underlying Unexercised Options: Exercisable (#) | | Option Exercise Price ($) | | Option Expiration Date | | | | | David Hyman | | | | 1,896 | | | | | 359.93 | | | | | 6/1/2028 | | | | | | | | | | 1,713 | | | | | 398.18 | | | | | 7/2/2028 | | | | | | | | | | 2,017 | | | | | 338.38 | | | | | 8/1/2028 | | | | | | | | | | 1,876 | | | | | 363.60 | | | | | 9/4/2028 | | | | | | | | | | 1,789 | | | | | 381.43 | | | | | 10/1/2028 | | | | | | | | | | 2,150 | | | | | 317.38 | | | | | 11/1/2028 | | | | | | | | | | 2,350 | | | | | 290.30 | | | | | 12/3/2028 | | | | | | | | | | 2,549 | | | | | 267.66 | | | | | 1/2/2029 | | | | | | | | | | 2,360 | | | | | 339.85 | | | | | 2/1/2029 | | | | | | | | | | 2,245 | | | | | 357.32 | | | | | 3/1/2029 | | | | | | | | | | 2,186 | | | | | 366.96 | | | | | 4/1/2029 | | | | | | | | | | 2,117 | | | | | 378.81 | | | | | 5/1/2029 | | | | | | | | | | 2,383 | | | | | 336.63 | | | | | 6/3/2029 | | | | | | | | | | 2,141 | | | | | 374.60 | | | | | 7/1/2029 | | | | | | | | | | 2,511 | | | | | 319.50 | | | | | 8/1/2029 | | | | | | | | | | 2,772 | | | | | 289.29 | | | | | 9/3/2029 | | | | | | | | | | 2,976 | | | | | 269.58 | | | | | 10/1/2029 | | | | | | | | | | 2,796 | | | | | 286.81 | | | | | 11/1/2029 | | | | | | | | | | 2,587 | | | | | 309.99 | | | | | 12/2/2029 | | | | | | | | | | 2,432 | | | | | 329.81 | | | | | 1/2/2030 | | | | | | | | | | 2,299 | | | | | 358.00 | | | | | 2/3/2030 | | | | | | | | | | 2,160 | | | | | 381.05 | | | | | 3/2/2030 | | | | | | | | | | 2,260 | | | | | 364.08 | | | | | 4/1/2030 | | | | | | | | | | 1,981 | | | | | 415.27 | | | | | 5/1/2030 | | | | | | | | | | 1,932 | | | | | 425.92 | | | | | 6/1/2030 | | | | | | | | | | 1,695 | | | | | 485.64 | | | | | 7/1/2030 | | | | | | | | | | 1,650 | | | | | 498.62 | | | | | 8/3/2030 | | | | | | | | | | 1,479 | | | | | 556.55 | | | | | 9/1/2030 | | | | | | | | | | 1,560 | | | | | 527.51 | | | | | 10/1/2030 | | | | | | | | | | 1,700 | | | | | 484.12 | | | | | 11/2/2030 | | | | | | | | | | 1,631 | | | | | 504.58 | | | | | 12/1/2030 | | | | | | Rachel Whetstone | | | | 20 | | | | | 290.30 | | | | | 12/3/2028 | | | | | | | | | | 137 | | | | | 267.66 | | | | | 1/2/2029 | | | | | | | | | | 214 | | | | | 339.85 | | | | | 2/1/2029 | | | | | | | | | | 204 | | | | | 357.32 | | | | | 3/1/2029 | | | | | | | | | | 199 | | | | | 366.96 | | | | | 4/1/2029 | | | | | | | | | | 192 | | | | | 378.81 | | | | | 5/1/2029 | | | | | | | | | | 217 | | | | | 336.63 | | | | | 6/3/2029 | | | | | | | | | | 195 | | | | | 374.60 | | | | | 7/1/2029 | | | | | | | | | | 228 | | | | | 319.50 | | | | | 8/1/2029 | | | | | | | | | | 252 | | | | | 289.29 | | | | | 9/3/2029 | | | | | | | | | | 271 | | | | | 269.58 | | | | | 10/1/2029 | | | | | | | | | | 254 | | | | | 286.81 | | | | | 11/1/2029 | | | | | | | | | | 235 | | | | | 309.99 | | | | | 12/2/2029 | | | | | | | | | | 221 | | | | | 329.81 | | | | | 1/2/2030 | | | | | | | | | | 262 | | | | | 358.00 | | | | | 2/3/2030 | |
| | | | | | | | | | | | | | | | | | Option Awards | Name | | Number of Securities Underlying Unexercised Options: Exercisable (#) | | Option Exercise Price ($) | | Option Expiration Date | | | | | Rachel Whetstone | | | | 246 | | | | | 381.05 | | | | | 3/2/2030 | | | | | | | | | | 257 | | | | | 364.08 | | | | | 4/1/2030 | | | | | | | | | | 226 | | | | | 415.27 | | | | | 5/1/2030 | | | | | | | | | | 220 | | | | | 425.92 | | | | | 6/1/2030 | | | | | | | | | | 193 | | | | | 485.64 | | | | | 7/1/2030 | | | | | | | | | | 188 | | | | | 498.62 | | | | | 8/3/2030 | | | | | | | | | | 169 | | | | | 556.55 | | | | | 9/1/2030 | | | | | | | | | | 177 | | | | | 527.51 | | | | | 10/1/2030 | | | | | | | | | | 194 | | | | | 484.12 | | | | | 11/2/2030 | | | | | | | | | | 186 | | | | | 504.58 | | | | | 12/1/2030 | |
OPTION EXERCISES The following table sets forth information concerning each exercise of stock options during 20172020 for each of the Named Executive Officers on an aggregated basis. | | | Option Awards | | | Option Awards | Name | | Number of Shares Acquired on Exercise | | Value Realized on Exercise ($) (1) | | | Number of Shares Acquired on Exercise (#) | | Value Realized on Exercise ($)(1) | | Reed Hastings | | 1,098,692 | | | $ | 177,973,897 | | | | 1,327,634 | | | | 612,125,269 | | Neil Hunt | | 240,000 | | | 37,461,936 | | | | Ted Sarandos | | | | 105,372 | | | | 30,045,923 | | | Spencer Neumann | | | | — | | | | — | | | Greg Peters | | | | 37,986 | | | | 15,038,592 | | | David Hyman | | 82,404 | | | 12,012,545 | | | | 26,754 | | | | 11,968,543 | | Greg Peters | | 56,875 | | | 5,832,084 | | | Ted Sarandos | | 168,035 | | | 20,503,173 | | | David Wells | | 8,000 | | | 1,329,553 | | | | Rachel Whetstone | | | | — | | | | — | |
(1) | Dollar value realized on exercise equals the difference between the closing price on the date of exercise less the exercise price of the option and does not necessarily reflect the sales price of the shares or if a sale was made. |
Potential Payments upon Termination orPOTENTIAL PAYMENTS UPON TERMINATION OR Change-in-CHANGE-IN-CONTROL
Control
The Named Executive Officers are beneficiaries of the Company’s Amended and Restated Executiveour Severance and Retention Incentive Plan, as described in more detail above in “Compensation Discussion and Analysis.” The information below reflects the estimated value of the compensation to be paid by the Companyus to each of the Named Executive Officers in the event of termination or a change in control under the terms of the Amended and Restated Executive Severance and Retention Incentive Plan. The amounts shown below assume that termination or change in control was effective as of December 31, 20172020 and is based on 20182021 allocatable compensation, amounts, which went into effect prior to the end of ourthe 2020 fiscal year. The actual amounts that would be paid can only be determined at the time of the actual triggering event. The right to receive a severance benefit terminates upon a change in control transaction, so that the beneficiaries of the plan are not entitled to both a change in control benefit and a severance benefit. Further, in connection with his departure from Netflix, Mr. Hunt entered into Netflix’s standard form of release agreement with Netflix which included customary confidentiality and release provisions and received a lump sum cash payment equal to $6,457,500. | Name | | Severance Benefit | | Change in Control Benefit | | | Severance Benefit ($)(1) | | Change in Control Benefit ($)(2) | | Reed Hastings | | $ | 21,000,000 | | | $ | 28,000,000 | | | | 25,987,500 | | | | 34,650,000 | | | Ted Sarandos | | | | 25,987,500 | | | | 34,650,000 | | | Spencer Neumann | | | | 8,662,500 | | | | 11,550,000 | | | Greg Peters | | | | 14,175,000 | | | | 18,900,000 | | | David Hyman | | 4,125,000 | | | $ | 5,500,000 | | | | 7,087,500 | | | | 9,450,000 | | Greg Peters | | 9,000,000 | | | $ | 12,000,000 | | | Ted Sarandos | | 18,750,000 | | | $ | 25,000,000 | | | David Wells | | 3,750,000 | | | $ | 5,000,000 | | | | Rachel Whetstone | | | | 3,937,500 | | | | 5,250,000 | |
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(1) | The amounts in this column correspond to lump sum payments in cash that are equal to nine months of allocatable compensation. The amounts in this column would be payable upon a termination of employment (other than for cause, death, or permanent disability), so long as the Named Executive Officer signs a waiver and release of claims and an agreement not to disparage us, our directors or officers in a form reasonably satisfactory to us. The right to receive a severance benefit terminates upon a change in control transaction, so that the Named Executive Officers are not entitled to both a change in control benefit and a severance benefit. |
(2) | The amounts in this column correspond to lump sum payments in cash that are equal to twelve months of allocatable compensation for the Named Executive Officer as of December 31, 2020. These are single-trigger payments that would be made upon a change in control, provided that the Named Executive Officer had not previously received severance under the Severance Plan. |
Pay Ratio Disclosure
PAY RATIO DISCLOSURE As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of RegulationS-K, the Company iswe are providing the following information about the relationship of the annual total compensation of the Company’sour employees and the annual total compensation of Mr.our Co-Chief Executive Officers, Messrs. Hastings the CEO.and Sarandos. The pay ratio included in this information is a reasonable estimate calculated in a manner consistent with Item 402(u) of RegulationS-K. As disclosed in the Summary Compensation Table, the 20172020 annual total compensation as determined under Item 402 of RegulationS-K was $43,226,024 for the CEO was $24,377,499.Mr. Hastings and $39,318,251 for Mr. Sarandos. The 20172020 annual total compensation as determined under Item 402 of RegulationS-K for theour median employee was $183,304.$219,577. Based on the foregoing, the Company’sour estimate of the ratio of the CEO’sour Co-Chief Executive Officers’ annual total compensation to theour median employee’s annual total compensation for fiscal year 20172020 is 133197 to 1.1, in the case of Mr. Hastings, and 179 to 1, in the case of Mr. Sarandos.1 Given the different methodologies that various public companies will use to determine an estimate of their pay ratios, the estimated ratio reported above should not be used as a basis for comparison between companies. To identify the median of the annual total compensation of all our employees, as well as to determine the annual total compensation of the “median employee,” the methodology and the material assumptions, adjustments, and estimates that werewe used were as follows: The Company determined that, as of December 31, 2017, the global employee population consisted of 4,855 employees. The Company annualized the compensation of all full-time and part-time employees who were not employed for all of 2017.
The CompanyWe selected December 31, 2017,2020, which is within the last three months of 2017,2020, as the date upon which the Companywe would identify the “median employee”.
employee.” We also used December 31 as our measuring date in 2019. Consistent with the summary executive compensation table, the CompanySummary Compensation Table, we examined total annual compensation for all employees (excluding Messrs. Hastings and Sarandos), which included: base salary, incentive compensation plan payments, option awards consisting of stock options, and other compensation such as 401(k) matching contributions. We annualized the compensation of all full-time and part-time employees who were not employed by us for all of 2020. For employees outside the United States, the Companywe converted their compensation to U.S. dollars using the applicable average exchange rate for 2017.2020. 1 | While the 2020 allocatable compensation for Messrs. Hastings and Sarandos were identical, the total compensation amount determined under Item 402 of Regulation S-K and resulting pay ratios differ due to the accounting valuation attributable to their stock option grants. |
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Compensation of Directors
Since 2015, none of the Company’s directors receive cash for services they provide as directors or members of Board committees but may be reimbursed for their reasonable expenses for attending Board and Board committee meetings. Eachnon-employee director receives stock options pursuant to the Director Equity Compensation Plan. The Director Equity Compensation Plan provides for a monthly grant of stock options to eachnon-employee director of the Company in consideration for services provided to the Company and subject to the terms and conditions of the Company’s 2011 Stock Plan.
The actual number of options granted each month to each of the Company’s directors is determined by the following formula: $25,000 / ([fair market value on the date of grant] x 0.40). Each monthly grant is made on the first trading day of the month, is fully vested upon grant and is exercisable at a strike price equal to the fair market value on the date of grant. The following table sets forth information concerning the compensation of the Company’snon-employee directors during 2017.
| | | | | | | Stockholder Proposal “Proposal 4 - Political Disclosures” | | | THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “AGAINST” PROPOSAL FOUR. | |
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In accordance with SEC rules, we have set forth below a stockholder proposal, along with the supporting statement of the stockholder proponent, for which we and our Board accept no responsibility. The stockholder proposal is required to be voted upon at our Annual Meeting only if properly presented at our Annual Meeting. As explained below, our Board unanimously recommends that you vote “AGAINST” the stockholder proposal. Myra K. Young, 9295 Yorkship Court, Elk Grove, CA 95758, the beneficial owner of no less than 100 shares of the Company’s common stock on the date the proposal was submitted, has notified the Company of her intent to present the following proposal at the Annual Meeting. Resolved: Shareholders of Netflix Inc (“Company”) hereby request that our Company provide a report, updated semiannually, disclosing the Company’s: 1. | Policies and procedures for making, with corporate funds or assets, contributions and expenditures (direct or indirect) to (a) participate or intervene in any campaign on behalf of (or in opposition to) any candidate for public office, or (b) influence the general public, or any segment thereof, with respect to an election or referendum. |
2. | Monetary and non-monetary contributions and expenditures (direct and indirect) used in the manner described in section 1 above, including: |
| a. | The identity of the recipient as well as the amount paid to each; and |
| b. | The title(s) of the person(s) in the Company responsible for decision-making. |
The report shall be presented to the board of directors or relevant board committee and posted on the Company’s website within 12 months from the date of the annual meeting. This proposal does not encompass lobbying spending. SUPPORTING STATEMENT As long-term shareholders, we support transparency and accountability in corporate electoral spending. This includes any activity considered intervention in a political campaign under the Internal Revenue Code, such as direct and indirect contributions to political candidates, parties, or organizations, and independent expenditures or electioneering communications on behalf of federal, state, or local candidates. Disclosure is in the best interest of the company and its shareholders. The Supreme Court recognized this in its 2010 Citizens United decision, which said, “[D]isclosure permits citizens and shareholders to react to the speech of corporate entities in a proper way. This transparency enables the electorate to make informed decisions and give proper weight to different speakers and messages.” Relying on available data does not provide a complete picture of the Company’s electoral spending. For example, payments to trade associations that may be used for election-related activities are undisclosed and unknown. This proposal asks Netflix to disclose all of its electoral spending, including payments to trade associations and other tax-exempt organizations, which may be used for electoral purposes. This would bring our Company in line with a growing number of leading companies in the 2020 CPA-Zicklin Index.1 Proposals on this topic at Alliant Energy, Macy’s, and Cognizant Technology Solutions passed last in 2019, despite board opposition. In 2020, shareholders of Activation Blizzard, Centene Corporation, J.B. Hunt Transport Services, and Western Union have also passed similar proposals. The Company’s Board and shareholders need comprehensive disclosure to fully evaluate the use of corporate assets in elections. We urge your support for this critical governance reform. Consider also that our Company maintains a classified board, plurality vote standard for uncontested directors, supermajority requirements to change bylaws, and does not allow shareholders to act by written consent. This, despite the fact that a majority of shares voted to change each of these provisions, sometimes more than once. Increase Long-Term Shareholder Value Vote for Political Disclosures—Proposal 4 1 | https://politicalaccountability.net/hifi/files/2020-CPA-Zicklin-Index.pdf |
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| | Fees Earned or
Paid in Cash
($)2021 PROXY STATEMENT | | | 67 | |
NETFLIX OPPOSING STATEMENT The Board has considered the stockholder proposal and, for the reasons described below, believes that the proposal is not in the best interests of Netflix and our stockholders. This stockholder proposal is nearly identical to a proposal presented last year and that failed to receive a majority of votes cast. Political contributions are already publicly disclosed. Indeed, U.S. federal and all 50 state election laws require either the contributor or the recipient campaign or committee to publicly file reports disclosing such contributions. Those disclosures are aggregated by a number of groups and are available and easily searchable on public websites. Therefore, we question the benefit of reporting our political contributions in the proposed manner, as it would be duplicative of existing disclosures. As is noted in the supporting statement, the report requested by the stockholder proposal would specifically include trade association or nonprofit payments that could be used for electoral purposes. We would note that the trade associations Netflix joins for various business-related reasons may also take political or policy positions we do not share, and that are not directly attributable to the membership dues we pay. It can also be difficult for us to assess exactly how our contributions to such organizations could be used, which could make it difficult to comply with this proposal. While the Board opposes this specific proposal, it acknowledges the interest in greater transparency regarding corporate political contributions. Accordingly, the Board will further evaluate what disclosures are appropriate for the Company to provide regarding political contributions. For the foregoing reasons, the Board unanimously believes that this proposal is not in the best interests of Netflix or our stockholders, and recommends that you vote “AGAINST” Proposal Four. Required Vote The affirmative vote of the majority of the votes cast is required to approve the stockholder proposal. The proposal is precatory and accordingly, is not binding on the Board or the Company. Netflix Recommendation | | | | | The Board unanimously recommends that the stockholders vote “Option AwardsAGAINST ” Proposal Four. |
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| | | | | | | Stockholder Proposal “Proposal 5 - Simple Majority Vote” | | | THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “AGAINST” PROPOSAL FIVE. | |
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In accordance with SEC rules, we have set forth below a stockholder proposal, along with the supporting statement of the stockholder proponent, for which we and our Board accept no responsibility. The stockholder proposal is required to be voted upon at our Annual Meeting only if properly presented at our Annual Meeting. As explained below, our Board unanimously recommends that you vote “AGAINST” the stockholder proposal. John Chevedden, 2215 Nelson Ave., No. 205, Redondo Beach, CA, 90278, the beneficial owner of 100 shares of the Company’s common stock on the date the proposal was submitted, has notified the Company of his intent to present the following proposal at the Annual Meeting. RESOLVED, Shareholders request that our board take each step necessary so that each voting requirement in our charter and bylaws (that is explicit or implicit due to default to state law) that calls for a greater than simple majority vote be eliminated, and replaced by a requirement for a majority of the votes cast for and against applicable proposals, or a simple majority in compliance with applicable laws. If necessary this means the closest standard to a majority of the votes cast for and against such proposals consistent with applicable laws. SUPPORTING STATEMENT Shareholders are willing to pay a premium for shares of companies that have excellent corporate governance. Supermajority voting requirements have been found to be one of 6 entrenching mechanisms that are negatively related to company performance according to “What Matters in Corporate Governance” by Lucien Bebchuk, Alma Cohen and Allen Ferrell of the Harvard Law School. Supermajority requirements are used to block initiatives supported by most shareowners but opposed by a status quo management. This proposal topic won from 74% to 88% support at Weyerhaeuser, Alcoa, Waste Management, Goldman Sachs, FirstEnergy, McGraw-Hill and Macy’s. These votes would have been higher than 74% to 88% if more shareholders had access to independent proxy voting advice. The proponents of these proposals included Ray T. Chevedden and William Steiner. Currently a 2%-minority can frustrate the will of our 66%-shareholder majority in an election with 68% of shares casting ballots. In other words a 2%-minority could have the power to prevent shareholders from modernizing the governance of our company. This can be particularly important during periods of management underperformance and/or an economic downturn. Currently the role of shareholders is downsized because management can simply ignore an overwhelming 66%-vote of shareholders. This proposal won more than 80% support 4-times at Netflix since 2013: 2019- 88%, 2016- 82%, 2015 - 80%, 2013 -81% Apparently NFLX shareholders are not pleased with our directors sitting on their hands in regard to this proposal topic in spite of these enormous shareholder votes. 54% of NFLX shares rejected Jay Hoag, who chaired the NFLX Governance Committee, in 2020. Based on this 54% rejection shareholders could consider Mr. Hoag undesirable for reelection to the Board of Electronic Arts, Peloton Interactive, TripAdvisor and Zillow Group if they own stocks in these companies. Reed Hastings and Mathias Dopfner were each rejected by 33% of shares in 2020. If these directors join the Boards of any public company, shareholders who own stock in those companies could consider them undesirable directors. 38% of shares rejected management pay in 2020. Unfortunately Mr. Timothy Haley, chair of the management pay committee, is untouchable by a NFLX shareholder vote until 2022. If Mr. Haley stands for reelection at 2U, Inc. and Zuroa in 2021 shareholders in those companies could consider Mr. Haley an undesirable director. Please vote yes: Simple Majority Vote-Proposal 5 | | | | | 70 | | | | |
NETFLIX OPPOSING STATEMENT The Board has considered the stockholder proposal and, for the reasons described below, believes that the proposal is not in the best interests of Netflix and our stockholders. Although our company has been around for more than 20 years, we operate in an extremely dynamic business environment. The global media landscape is undergoing rapid change, much of which we have been pioneering. The competitive landscape in which we operate is also rapidly changing. We face growing competition from companies that have launched similar streaming services and we are increasing our content development. We expect to see substantial shifts in market dynamics over the coming years, and we need to maintain flexibility to execute our long-term strategic initiatives. A simple majority vote requirement already applies to most corporate matters submitted to a vote of our stockholders. We believe that the supermajority we have in place is appropriate to increase stability in our operations, while still being set low enough for stockholders to have a voice on issues where there is strong consensus. This proposal has been presented for stockholders most recently in 2020 and received a majority of votes cast. The Board has weighed the voting results as part of a regular and ongoing examination of our governance structure. We are also aware that many stockholders, including ours, are supportive of a simple majority standard. The Board continues to believe that the current governance structure, including our supermajority standard, is appropriate for this point in our evolution. There is a desire to have some flexibility to implement our long-term plan, and we believe the supermajority standard is important to providing this needed flexibility. This provision ensures that fundamental changes are broadly supported by stockholders, and we continue to believe that it is in the best interest of the Company and our stockholders. For the foregoing reasons, the Board unanimously believes that this proposal is not in the best interests of Netflix or our stockholders, and recommends that you vote “AGAINST” Proposal Five. Required Vote The affirmative vote of the majority of the Votes Cast is required to approve the stockholder proposal. The proposal is precatory and accordingly, is not binding on the Board or the Company. Netflix Recommendation | | | | | The Board unanimously recommends that the stockholders vote “AGAINST” Proposal Five. |
| | | | | | | | | 2021 PROXY STATEMENT | | | Total
($)71 | |
| | | | | | | Richard N. BartonProposal 6
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| | | | | | | Stockholder Proposal “Stockholder Proposal to Improve the Executive Compensation Philosophy” | | | THE BOARD UNANIMOUSLY RECOMMENDS THAT THE STOCKHOLDERS VOTE “AGAINST” PROPOSAL SIX. | |
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In accordance with SEC rules, we have set forth below a stockholder proposal, along with the supporting statement of the stockholder proponent, for which we and our Board accept no responsibility. The stockholder proposal is required to be voted upon at our Annual Meeting only if properly presented at our Annual Meeting. As explained below, our Board unanimously recommends that you vote “AGAINST” the stockholder proposal. Jing Zhao, 1745 Copperleaf Ct., Concord, CA 94519, the beneficial owner of 8 shares of the Company’s common stock on the date the proposal was submitted, has notified the Company of his intent to present the following proposal at the Annual Meeting. Resolved: stockholders recommend that Netflix, Inc. improve the executive compensation philosophy to include CEO pay ratio and other factors. SUPPORTING STATEMENT Section 953(b) of the Dodd-Frank Act directed the SEC to amend Item 402 of Regulation S-K to require each company to disclose the annual total compensation of the CEO, the median of the annual total compensation of all employees (except the CEO), and the ratio of these two amounts (CEO pay ratio). Netflix’s CEO pay ratio was 133:1 in 2017 (2018 Proxy Statement p. 65), 178:1 in 2018 (2019 Proxy Statement p. 47), and 190:1 in 2019 (2020 Proxy Statement p. 70). Since the median of the annual total compensation cannot jump, the rising ratio is due to the CEO compensation jump from $24,377,499 in 2017 to $36,080,417 in 2018 (48% increase), to $38,577,129 in 2019 (Ibid. p.49). The section “Determining Executive Compensation Magnitude” lists some philosophical points of executive compensation (Ibid. pages 39-40) without any consideration of social and economic factors, such as the CEO pay ratio. There is no rational methodology or program to determine the executive compensation. For example, Twitter’s CEO pay ratio is less than 0.001 in 2018 and in 2019, Amazon’s CEO pay ratio is 58:1 in 2018 and in 2019. JCPenney’s alarming CEO pay ratio 1294:1 in 2018 is one cause to its bankruptcy. The executive compensations of big Japanese and European companies are much less than big American companies. As Warren Buffett stated, “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.” (“In Class Warfare, Guess Which Class Is Winning”, New York Times Nov. 26, 2006.) America’s ballooning executive compensation is neither responsible for the society nor sustainable for the economy, especially under the current social and economical crisis. Reducing the CEO pay ratio should be included to the philosophy of executive compensation. The Compensation Committee has the flexibility to include other social and economic factors. NETFLIX OPPOSING STATEMENT The Board has considered the stockholder proposal and, for the reasons described below, believes that the proposal is not in the best interests of Netflix and our stockholders. The proposal is vague and unclear and therefore would be difficult to implement. The proposal fails to explain how the CEO pay ratio and “other factors” should be considered in improving our executive compensation philosophy. It is difficult to determine what actions would be required to change our current executive compensation philosophy to implement the proposal. The proposal also does not specify the “other factors” that should be considered in our compensation philosophy. Moreover, CEO pay ratios vary widely across companies as different companies may have different employment and compensation practices. The SEC has stated that the purpose of CEO pay ratio disclosures is not to facilitate
comparisons among registrants and that precise conformity or comparability of the pay ratio across companies is not necessarily achievable given the variety of factors that could cause the ratio to differ, companies may utilize different methodologies, exclusions, estimates and assumptions in calculating their pay ratios. For example, the flexibility of our employees to allocate their compensation to stock options rather than cash makes it difficult to properly evaluate our overall compensation through the use of one metric, such as CEO pay ratio. As a result, the utility of CEO pay ratio as a comparative metric at Netflix and industry-wide is limited. This proposal appears premised on the erroneous assertion that, “[t]here is no rational methodology or program to determine the executive compensation.” This is simply not true. As described in the section entitled “Compensation Discussion and Analysis” above, our compensation program and philosophy are thoughtfully designed and applied. We already consider a number of factors that apply to both executives and the majority of our employees alike. We aim to pay all employees at the top of their personal market and provide highly competitive compensation packages, which enables us to attract and retain the most talented employees from around the globe. The compensation program is designed to be simple, transparent, and to create a long-term alignment with stockholders’ interests. Our Compensation Committee evaluates our compensation practices on an ongoing basis to determine whether they are appropriate to attract, retain and reward outstanding performers. Our compensation practices also are tailored to account for the specific needs and responsibilities of the particular position as well as the performance and unique qualifications of the individual employee, rather than by seniority or Netflix’s overall performance. We believe this helps us attract and retain the most talented employees from around the globe to drive innovation, creativity, growth and long-term value for our stockholders. The proposal would interfere with this carefully designed compensation program, which we believe is not only effective but integral to our success. In 2020, we conducted a pay equity analysis and adopted practices to ensure that employees from underrepresented groups are not being underpaid relative to others doing the same or similar work. We also practice “open compensation,” which means the top leaders (director-level and above) at the Company can see how much any employee is paid. This encourages open discussions about pay disparities. We aim to rectify any pay gaps that we find through these approaches. In summary, our compensation program and philosophy are thoughtfully designed and already consider a number of factors in setting compensation. The vague proposal to include the CEO pay-ratio and “other factors” in our compensation philosophy is unnecessary and would interfere with the ability of the Compensation Committee to optimally design our compensation program in a manner that it believes is in the best interest of the Company and our stockholders. For the foregoing reasons, the Board unanimously believes that this proposal is not in the best interests of Netflix or our stockholders, and recommends that you vote “AGAINST” Proposal Six. Required Vote The affirmative vote of the majority of the Votes Cast is required to approve the stockholder proposal. The proposal is precatory and accordingly, is not binding on the Board or the Company. Netflix Recommendation | | | | | The Board unanimously recommends that the stockholders vote “AGAINST” Proposal Six. |
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OTHER INFORMATION
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The following table sets forth certain information known to us with respect to beneficial ownership of our common stock as of April 8, 2021 by (i) each stockholder that we know is the beneficial owner of more than 5% of our common stock, (ii) each director and nominee for director, (iii) each Named Executive Officer, and (iv) all executive officers and directors as a group. We have relied upon information provided to us by our directors and Named Executive Officers and copies of documents sent to us that have been filed with the SEC by others for purposes of determining the number of shares each person beneficially owns. Beneficial ownership is determined in accordance with the rules and regulations of the SEC and generally includes those persons who have voting or investment power with respect to the securities. Except as otherwise indicated, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of our common stock beneficially owned by them. Shares of our common stock subject to options that are currently exercisable or exercisable within 60 days of April 8, 2021 are also deemed outstanding for purposes of calculating the percentage ownership of that person, and if applicable, the percentage ownership of the executive officers and directors as a group, but are not treated as outstanding for the purpose of calculating the percentage ownership of any other person. Unless otherwise indicated, the address for each stockholder listed in the table below is c/o Netflix, Inc., 100 Winchester Circle, Los Gatos, CA 95032. | | | | | | | | | | | Name and Address | | Number of Shares Beneficially Owned | | Percent of Class | | | | The Vanguard Group, Inc.(1) 100 Vanguard Blvd Malvern, PA 19355 | | | | 33,200,737 | | | | | 7.49 | % | | | | Capital Research Global Investors(2) 333 South Hope Street Los Angeles, CA 90071 | | | | 30,232,937 | | | | | 6.82 | % | | | | BlackRock, Inc.(3) 55 East 52nd Street New York, NY 10055 | | | | 28,731,448 | | | | | 6.48 | % | | | | Reed Hastings(4) | | | | 7,998,031 | | | | | 1.79 | % | | | | Jay C. Hoag(5) 250 Middlefield Road Menlo Park, CA 94025 | | | | 2,624,183 | | | | | * | | | | | Ted Sarandos(6) | | | | 563,134 | | | | | * | | | | | Greg Peters(7) | | | | 286,036 | | | | | * | | | | | David Hyman(8) | | | | 221,563 | | | | | * | | | | | Spencer Neumann(9) | | | | 73,474 | | | | | * | | | | | Richard N. Barton(10) | | | | 49,134 | | | | | * | | | | | Leslie Kilgore(11) | | | | 46,901 | | | | | * | | | | | Timothy M. Haley(12) c/o Redpoint Ventures 2969 Woodside Road Woodside, CA 94062 | | | | 37,826 | | | | | * | | | | | Bradford L. Smith(13) | | | | 30,371 | | | | | * | | | | | Ann Mather(14) | | | | 16,866 | | | | | * | | | | | Anne M. Sweeney(15) | | | | 8,705 | | | | | * | | | | | Rachel Whetstone(16) | | | | 6,227 | | | | | * | | | | | Mathias Döpfner(17) | | | | 5,143 | | | | | * | | | | | Rodolphe Belmer(18) | | | | 4,543 | | | | | * | | | | | Strive Masiyiwa(19) | | | | 464 | | | | | * | | | | | All directors and executive officers as a group (18 persons)(20) | | | | 11,989,268 | | | | | 2.68 | % |
$ | 335,791 (1) | | | | 76 | | | 335,791 (2) | | A. George (Skip) Battle | | | — | | | | 335,791 (1) | | | | 335,791 (3) | | Timothy M. Haley
| | | — | | | | 335,791 (1) | | | | 335,791(4) | | Jay C. Hoag
| | | — | | | | 335,791(1) | | | | 335,791(5) | | Leslie Kilgore
| | | — | | | | 335,791(1) | | | | 335,791(6) | | Ann Mather
| | | — | | | | 335,791 (1) | | | | 335,791(7) | | Bradford L. Smith
| | | — | | | | 335,791(1) | | | | 335,791(8) | | Anne M. Sweeney
| | | — | | | | 335,791(1) | | | | 335,791(9) | |
| | | | | Grant Date | | Fair Value | | 1/3/2017 | | $ | 28,471 | | 2/1/2017 | | | 28,488 | | 3/1/2017 | | | 28,476 | | 4/3/2017 | | | 27,168 | | 5/1/2017 | | | 27,108 | | 6/1/2017 | | | 27,097 | | 7/3/2017 | | | 27,471 | | 8/1/2017 | | | 27,416 | | 9/1/2017 | | | 27,469 | | 10/2/2017 | | | 28,876 | | 11/1/2017 | | | 28,915 | | 12/1/2017 | | | 28,836 | |
(1) | Option awards reflect the monthly grant of stock options to eachnon-employee director on the dates and at the aggregate grant date fair values, as shown below. |
(2) | Aggregate number of option awards outstanding held by Mr. Barton at December 31, 2017 was 64,781. |
(3) | Aggregate number of option awards outstanding held by Mr. Battle at December 31, 2017 was 112,007. |
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(4)* | Aggregate numberLess than 1% of option awardsthe Company’s outstanding held by Mr. Haley at December 31, 2017 was 64,702.shares of common stock. |
(5)1. | Aggregate numberAs of option awards outstanding held by Mr. Hoag at December 31, 2017 was 57,863.2020, based on information provided by The Vanguard Group, Inc. in the Schedule 13G/A filed February 10, 2021. Of the shares beneficially owned, The Vanguard Group, Inc. reported that it has sole dispositive power with respect to 31,246,463 shares, shared dispositive power with respect to 1,954,274 shares, shared voting power with respect to 758,570 shares, and sole voting power with respect to zero shares. |
(6)2. | Aggregate numberAs of option awards outstanding held by Ms. Kilgore at December 31, 2017 was 23,115.2020, based on information provided by Capital Research Global Investors in the Schedule 13G/A filed February 16, 2021. Of the shares beneficially owned, Capital Research Global Investors reported that it has sole dispositive power with respect to all the shares and sole voting power with respect to 30,224,074 shares. |
(7)3. | Aggregate numberAs of option awards outstanding held by Ms. Mather at December 31, 2017 was 35,750.2020, based on information provided by BlackRock, Inc. in the Schedule 13G/A filed January 29, 2021. Of the shares beneficially owned, BlackRock, Inc. reported that it has sole dispositive power with respect to all of the shares and sole voting power with respect to 24,895,490 shares. |
(8)4. | Aggregate numberIncludes options to purchase 3,075,639 shares. Mr. Hastings is a trustee of option awards outstanding held by Mr. Smith at December 31, 2017 was 16,882.the Hastings-Quillin Family Trust, which is the holder of 4,922,392 of the Company’s shares. |
(9)5. | Aggregate number of option awards outstandingIncludes (i) 703,825 common shares that are directly held by Ms. Sweeney at December 31, 2017 was 16,882.TCV VII, L.P. (“TCV VII”), (ii) 365,509 common shares that are directly held by TCV VII (A), L.P. (“TCV VII (A)”), (iii) 6,086 common shares that are directly held by TCV Member Fund, L.P. (“Member Fund”), (iv) 640,434 common shares that are directly held by Orange Investor, L.P. (“Orange Investor”), (v) 172,704 common shares that are directly held by Orange Investor (A), L.P. (“Orange Investor (A)”), (vi) 39,777 common shares that are directly held by Orange Investor (B), L.P. (“Orange Investor (B)”), (vii) 47,085 common shares that are directly held by Orange (MF) Investor, L.P. (“Orange Investor (MF)”), (viii) options to purchase 31,049 common shares held by Jay C. Hoag, (ix) 479,398 common shares held by the Hoag Family Trust U/A Dtd 8/2/94 (the “Hoag Family Trust”), and (x) 138,316 common shares held by Hamilton Investments Limited Partnership (“Hamilton Investments”). |
Equity Compensation Plan Information
| Jay C. Hoag and six other individuals (the “Class A Directors of Management VII”) are Class A Directors of Technology Crossover Management VII, Ltd. (“Management VII”) and limited partners of Technology Crossover Management VII, L.P. (“TCM VII”) and Member Fund. Management VII is the general partner of TCM VII, which is the general partner of TCV VII and TCV VII (A). Management VII is also a general partner of Member Fund. The Class A Directors of Management VII and TCM VII may be deemed to beneficially own the shares held by TCV VII, TCV VII (A) and Member Fund, but each disclaim beneficial ownership of such shares except to the extent of their pecuniary interest therein. |
| Mr. Hoag and five other individuals (the “Class A Directors of Management VIII”) are Class A Directors of Technology Crossover Management VIII, Ltd. (“Management VIII”) and limited partners of Technology Crossover Management VIII, L.P. (“TCM VIII”). Management VIII is the sole general partner of TCM VIII, which in turn is the sole general partner of TCV VIII, L.P., which in turn is the sole member of Orange Investor GP, LLC (“Orange GP”), which in turn is the sole general partner of Orange Investor, Orange (A) Investor, Orange (B) Investor, and Orange (MF) Investor. The Class A Directors of Management VIII and TCM VIII may be deemed to beneficially own the shares held by Orange Investor, Orange (A) Investor, Orange (B) Investor, and Orange (MF) Investor but each disclaim beneficial ownership of such shares except to the extent of their pecuniary interest therein. The shares held by Orange Investor, Orange (A) Investor, Orange (B) Investor, and Orange (MF) Investor are also pledged as collateral for a third party debt facility. |
| Mr. Hoag has the sole power to dispose and direct the disposition of the options and any shares issuable upon exercise of the options, and the sole power to direct the vote of the shares of common stock to be received upon exercise of the options. However, with respect to the options, Mr. Hoag has transferred to TCV VII Management, L.L.C. (“TCV VII Management”) and TCV VIII Management, L.L.C. (“TCV VIII Management”) 100% of the pecuniary interest in such options and any shares to be issued upon exercise of such options. Mr. Hoag is a member of TCV VII Management and TCV VIII Management but disclaims beneficial ownership of such options and any shares to be received upon exercise of such options except to the extent of his pecuniary interest therein. |
| Mr. Hoag is a trustee of the Hoag Family Trust and may be deemed to have the sole power to dispose or direct the disposition of the shares held by the Hoag Family Trust. Mr. Hoag disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. |
| Mr. Hoag is the sole general partner and a limited partner of Hamilton Investments and may be deemed to have the sole power to dispose or direct the disposition of the shares held by Hamilton Investments. Mr. Hoag disclaims beneficial ownership of such shares except to the extent of his pecuniary interest therein. |
6. | Includes options to purchase 563,134 shares. |
7. | Includes options to purchase 272,946 shares. |
8. | Includes options to purchase 189,953 shares. |
9. | Includes options to purchase 73,474 shares. |
10. | Includes options to purchase 31,876 shares. Mr. Barton is a trustee of the Barton Family Foundation, which is the holder of 10,000 of the Company’s shares. |
11. | Includes options to purchase 11,705 shares. |
12. | Includes options to purchase 37,826 shares. |
13. | Includes options to purchase 23,872 shares. |
14. | Includes options to purchase 16,866 shares. |
15. | Includes options to purchase 8,705 shares. |
16. | Includes options to purchase 5,912 shares. |
17. | Includes options to purchase 5,118 shares. |
18. | Includes options to purchase 4,543 shares. |
19. | Includes options to purchase 464 shares. |
20. | Includes, without duplication, the shares and options listed in footnotes (4) through (19) above. |
DELINQUENT SECTION 16(a) REPORTS Section 16(a) of the Exchange Act requires our executive officers, directors and persons who beneficially own more than ten percent of our ordinary shares to file reports of their beneficial ownership and changes in ownership (Forms 3, 4 and 5, and any amendment thereto) with the SEC. Based solely on a review of forms filed in the SEC’s EDGAR database and written representations from executive officers and directors, we believe that during the fiscal year ended December 31, 2020, all filing requirements were satisfied on a timely basis, except that, due to an administrative error: (A) a late Form 4 was filed for each of Richard Barton, Rodolphe Belmer, Mathias Döpfner, Timothy Haley, Reed Hastings, David Hyman, Leslie Kilgore, Ann Mather, Jessica Neal, Spencer Neumann, Greg Peters, Susan Rice, Ted Sarandos, Brad Smith, Anne Sweeney and Rachel Whetstone on September 4, 2020, with respect to stock options granted on September 1, 2020 and (B) a late Form 4 was filed for Mr. Barton on September 4, 2020 with respect to transactions that occurred September 1, 2020.
EQUITY COMPENSATION PLAN INFORMATION The following table summarizes the Company’sour equity compensation plans as of December 31, 2017.2020. There were no equity compensation plans or arrangements not approved by security holders. | | | | | | | | | | | | | | | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights | | | Weighted- Average Exercise Price of Outstanding Options, Warrants and Rights | | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) | | Plan category | | (a) | | | (b) | | | (c) | | Equity compensation plans or arrangements approved by security holders | | | 21,647,350 (1) | | | $ | 61.13 | | | | 30,239,962 (2) | |
| | | | | | | | | | | | | | | | Plan Category | | Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants, and Rights (a) | | Weighted- Average Exercise Price of Outstanding Options, Warrants, and Rights (b) | | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected in Column (a)) (c) | | | | | Equity compensation plans or arrangements approved by security holders: | | | | | | | | | | | | | | | | | | | | 2002 Plan(1) | | | | 416,418 | | | | | 21.26 | | | | | — | | | | | | 2011 Plan(2) | | | | 17,446,523 | | | | | 158.02 | | | | | — | | | | | | 2020 Plan | | | | 813,869 | | | | | 508.30 | | | | | 21,702,085 | | | | | | Equity compensation plans not approved by security holders | | | | — | | | | | — | | | | | — | | | | | | Total | | | | 18,676,810 | (3) | | | | 170.23 | | | | | 21,702,085 | |
(1) | (1)Our Amended and Restated 2002 Stock Plan (the “2002 Plan”) terminated in 2012, and no new awards may be issued thereunder. The outstanding options under the 2002 Plan are described in this row. |
(2) | No new awards may be issued under the Netflix, Inc. 2011 Stock Plan (the “2011 Plan”) after June 4, 2020. The outstanding options under the 2011 Plan are described in this row. |
(3) | Weighted average life is 5.975.55 years. |
| (2) | Includes (i) 19,500,047 shares of the Company’s common stock reserved under its 2002 Employee Stock Purchase Plan (“ESPP”), as amended, for future issuance, and (ii) 10,739,915 shares of the Company’s common stock reserved under its 2011 Stock Plan. In 2010, the Company suspended payroll contributions to the ESPP and ended purchases of shares by employees. The Company currently does not expect to resume ESPP contributions or purchases for the foreseeable future. |
Compensation Risk
The Company’s compensation policies fornon-executive salaried employees are the same as those outlined for its Named Executive Officers, except that only the Named Executive Officers are eligible to participate in the Performance Bonus Plan. Given the design of our compensation structure, as detailed in the foregoing Compensation Discussion and Analysis, we do not believe that our compensation policies and practices are reasonably likely to have a material adverse effect on the Company.
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Code of Ethics
The Company has adopted a Code of Ethics for its directors, officers and other employees. A copy of the Code of Ethics is available on the Company’s Investor Relations website athttp://ir.netflix.com/governance.cfm. Any waivers of the Code of Ethics will be posted at that website.
Section 16(a) Beneficial Ownership Compliance
Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s directors and executive officers, and persons who own more than 10% of a registered class of the Company’s equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of the Company’s common stock and other equity securities of the Company. Officers, directors and greater than 10% stockholders are required by the SEC rules to furnish the Company with copies of all Forms 3, 4 and 5 they file.
To the Company’s knowledge, based solely on a review of the copies of such reports furnished to the Company and written representations that no other reports were required, during fiscal year 2017 all of the Section 16(a) filing requirements applicable to the Company’s officers, directors and greater than 10% stockholders were followed in a timely manner.
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REPORT OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
The Audit Committee engages and supervises the Company’s independent registered public accounting firm and oversees the Company’s financial reporting process on behalf of the Board. Management has the primary responsibility for the preparation of financial statements and the reporting process, including the systems of internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed the audited financial statements in the Company’s annual report on Form10-K for the year ended December 31, 2017 with management, including a discussion of the quality of the accounting principles, the reasonableness of significant judgments made by management and the clarity of disclosures in the financial statements.
The Audit Committee reviewed with Ernst & Young LLP (“EY”), the Company’s independent registered public accounting firm, who is responsible for expressing an opinion on the conformity of the Company’s audited financial statements with accounting principles generally accepted in the United States of America, its judgments as to the quality of the Company’s accounting principles and the other matters required to be discussed with the Audit Committee under the auditing standards generally accepted in the United States of America, including the matters required by Auditing Standard No. 1301,Communications with Audit Committees, issued by the Public Company Accounting Oversight Board (“PCAOB”). In addition, the Audit Committee has discussed with EY its independence from management and the Company, including the written disclosures and the letter regarding its independence as required by PCAOB Rule 3526,Communication with Audit Committees Concerning Independence.
The Audit Committee also reviewed the fees paid to EY during the year ended December 31, 2017 for audit andnon-audit services, which fees are described under the heading “Principal Accountant Fees and Services.” The Audit Committee has determined that the rendering of allnon-audit services by EY were compatible with maintaining its independence.
The Audit Committee discussed with EY the overall scope and plans for its audit. The Audit Committee met with EY, with and without management present, to discuss the results of its examinations, its evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting.
Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in the annual report on Form10-K for the year ended December 31, 2017, for filing with the Securities and Exchange Commission.
Audit Committee of the Board of Directors
Richard N. Barton
Leslie Kilgore
Ann Mather
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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Agreements with Directors and Executive Officers
The Company has entered into indemnification agreements with each of its directors and executive officers. These agreements require the Company to indemnify such individuals, to the fullest extent permitted by Delaware law, for certain liabilities to which they may become subject as a result of their affiliation with the Company.
Procedures for Approval of Related Party Transactions
The Company has a written policy concerning the review and approval of related party transactions. Potential related party transactions are identified through an internal review process that includes a review of payments made in connection with transactions in which related persons may have had a direct or indirect material interest. Those transactions that are determined to be related party transactions under Item 404 of RegulationS-K issued by the SEC are submitted for review by the Audit Committee for approval and to conduct aconflicts-of-interest analysis. The individual identified as the “related party” may not participate in any review or analysis of the related party transaction.
Mr. Hastings beneficially owns two aircraft which are leased to Netflix by him under time-sharing agreements for Netflix business related travel by Mr. Hastings and other Netflix employees. Under the terms of the time-sharing agreements, Netflix provides payment to Mr. Hastings for such travel based on the aggregate incremental cost of each specific flight pursuant to applicable FAA regulations. In 2017, Netflix reimbursed Mr. Hastings $759,164 under these time-sharing agreements.
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STOCKHOLDERS SHARING AN ADDRESS Stockholders sharing an address with another stockholder may receive only one Notice of Internet Availability of Proxy Materials at that address unless they have provided contrary instructions. Any such stockholder who wishes to receive a separate Notice of Internet Availability of Proxy Materials now or in the future may write or call Broadridge to request a separate copy from: Householding Department Broadridge 51 Mercedes Way, Edgewood, NY 11717 (800) 542-10611-866-540-7095
Broadridge will promptly, upon written or oral request, deliver a Notice of Internet Availability of Proxy Materials, or if requested, a separate copy of its annual report or this Proxy Statement to any stockholder at a shared address to which only a single copy was delivered. Similarly, stockholders sharing an address with another stockholder who have received multiple copies of the Company’s Notice of Internet Availability of Proxy Materials may write or call the above address and phone number to request delivery of a single copy in the future. | | | | | 78 | | | | |
OTHER MATTERS The Board knows of no other matters that will be presented for consideration at the Annual Meeting. If any other matters are properly brought before the Annual Meeting, the persons named in the accompanying proxy intend to vote on those matters in accordance with their best judgment. By order of the Board of Directors
David Hyman General CounselChief Legal Officer and Secretary
April 23, 20182021 Los Gatos, California 71
| | | NETFLIX, INC. 100 WINCHESTER CIRCLE LOS GATOS, CA 95032 | | VOTE BY INTERNET BeforeTheMeeting- Go towww.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 8:59 p.m. Pacific Time on June 5, 2018.2, 2021. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. During The MeetingDuringTheMeeting- Go tonflx.onlineshareholdermeeting.comwww.virtualshareholdermeeting.com/nflx2021
You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked by the arrow available and follow the instructions. VOTE BY PHONE -1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 8:59 p.m. Pacific Time on June 5, 2018.2, 2021. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. |
| | | | | TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | E46841-P06577D39612-P51438 KEEP THIS PORTION FOR YOUR RECORDS | — — — — — — — — — — — — — — — — — — — — — — ��� — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — | | | | | DETACH AND RETURN THIS PORTION ONLY |
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | NETFLIX, INC. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | The Board of Directors recommends you vote FOR the following proposals: | | | | | | | | | | | | | | | | | | | 1. To elect four Class I directors to hold office until the 20212024 Annual Meeting of Stockholders. | | | | | | | | | | | | | | | | | | | | | | | | Nominees: | | | For | | | | | | | | | | Withhold | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1a. Richard N. Barton | | | ☐ | | | | | | | | ☐ | | | The Board of Directors recommends you vote AGAINST the following proposals: | | | For | | | | Against | | | | Abstain | | | | | | | | | | | | | | | | | | 1b. Rodolphe Belmer | | | ☐ | | | | | | | | ☐ | | | 4. | | Stockholder proposal to allow holders of an aggregate of 15% of outstanding common stock to call special shareholder meeting,entitled, “Proposal 4 – Political Disclosures,” if properly presented at the meeting. | | | ☐ | | | | ☐ | | | | ☐ | | | | | | | | | | | | | | | | | | | | 1c. Bradford L. Smith | | | ☐ | | | | | | | | ☐ | | | 5. | | Stockholder proposal regarding proxy access bylaw for director nominees by stockholders,entitled, “Proposal 5 – Simple Majority Vote,” if properly presented at the meeting. | | | ☐ | | | | ☐ | | | | ☐ | | | | | | | | | | | | | | | | | | | | 1d. Anne M. Sweeney | | | ☐ | | | | | | | | ☐ | | | 6. | | Stockholder proposal regarding clawback policy,entitled, “Stockholder Proposal to Improve the Executive Compensation Philosophy,” if properly presented at the meeting. | | | ☐ | | | | ☐ | | | | ☐ | | | | | | | | | | | | | | | | | | | | | | | For | | | | Against | | | | Abstain | | | 7. | | Stockholder proposal regarding shareholder right to act by written consent, if properly presented at the meeting.
| | | ☐ | | | | ☐ | | | | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2. To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2018.2021. | | | ☐ | | | | ☐ | | | | ☐ | | | 8. | | Stockholder proposal regarding simple majority vote, if properly presented at the meeting. | | | ☐ | | | | | | | ☐ | | | | ☐ | | | | | | | | | | | | | | | | | | | | 3. Advisory approval of the Company’s executive officer compensation. | | | ☐ | | | | ☐ | | | | ☐ | | | 9. | | Stockholder proposal to amend Sections 2.8 and 3.3 of the bylaws to provide for the election of directors in uncontested elections by a majority vote of shares voted, if properly presented at the meeting. | | | ☐ | | | | | | | ☐ | | | | ☐ | | | | | | | | Mark box at right if an address change or comment has been noted on this card. | | | | | | | | | | | | | | ☐ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | This proxy should be marked, dated and signed by the stockholder or stockholders exactly as the stockholder’s or stockholders’ names appearname(s) appear(s) hereon, and returned promptly in the enclosed envelope. Persons signing in a fiduciary or representative capacity should so indicate. If shares are held by joint tenants, as community property or otherwise by more than one person, all should sign. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Signature [PLEASE SIGN WITHIN BOX] | | | Date | | | | | | | | | | | Signature (Joint Owners) | | | Date | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. | | | | | — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — |
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E46842-P06577D39613-P51438
FORM OF PROXY NETFLIX, INC. ANNUAL MEETING OF STOCKHOLDERS JUNE 6, 20183, 2021 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS The undersigned stockholder of Netflix, Inc. (the “Company”) hereby acknowledges receipt of the Notice of Annual Meeting of Stockholders and Proxy Statement, each dated April 23, 2018,2021, and hereby appoints Reed HastingsDavid Hyman and David Wells,Spencer Neumann, and each of them, with full power of substitution, as proxy or proxies to vote all shares of the Company’s common stock of the undersigned at the Annual Meeting of Stockholders of Netflix, Inc. to be held on June 6, 2018,3, 2021, and at any adjournments thereof, upon the proposals set forth in this proxy and described in the Proxy Statement, and in their discretion with respect to such other matters as may be properly brought before the meeting or any adjournments thereof. If this proxy is properly executed and returned, this proxy will be voted for the specifications made on the reverse side or if no direction is made, this proxy will be voted FOR the nominees for Class I directors set forth on the reverse side (item 1), FOR items 2 and 3, and AGAINST items 4, 5, 6, 7, 8, and 9,6, and in the discretion of the proxies on all other matters as may be properly brought before the meeting or any adjournments thereof. Either of such proxies or substitutes shall have and may exercise all of the powers of said proxies hereunder. | | | | | | | | | | | | | Address Changes/Comments:
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(If you noted any Address Changes/Comments above, please mark corresponding box on the reverse side.)
Continued and to be signed on reverse side |
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