UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant ☒ Filed by a Party other than the Registrant ☐
Check the appropriate box:
| Preliminary Proxy Statement | ||
| ☐ | Confidential, for Use of the Commission Only (as permitted by Rule14a-6(e)(2)) | |
| Definitive Proxy Statement | ||
| ☐ | Definitive Additional Materials | |
| ☐ | Soliciting Material under Rule14a-12 | |
NETFLIX, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box)all boxes that apply):
| ☒ | No fee required. | |||
| ☐ | Fee paid previously with preliminary materials. | |||
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Letter from Our Lead
Independent Director
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In 2019, Netflix entertained more than 160 millionPRELIMINARY PROXY STATEMENT-SUBJECT TO COMPLETION
Fellow Stockholders,
Despite the ongoing challenges of the COVID-19 pandemic in 2021, we were fortunate to be able to continue providing members with a source of escape, connection and comfort.
We are humbled by our talented and dedicated teams who continue to create and deliver world class entertainment across a variety of genres and languages, demonstrating that great stories come from anywhere and are enjoyed by audiences everywhere. Our original stories thatdeeply resonated with audiences and, within the prior year, we were honored to have been nominated for 129 Emmys and won 44 - matching the record for most in a single year set by CBS in 1974. We were nominated for 117 Emmys and an industry-leading 27 Academy Awards, and won Best Director, and we were nominated for 24 British Academy Awards. We hit financial milestones, achieving $20of Film and Television Arts (BAFTA) awards, winning Best Picture, Best Director, and Outstanding Debut by a British Writer, Director or Producer.
In 2021, we had approximately 222 million paid memberships, achieved approximately $30 billion in revenue, representing 19% year-over-year growth, and $2.6over $6 billion of operating income, representing 35% year-over-year growth, as well as improved our cash flows from operations. We also added mobile games to our service.
We made progress on our Environmental, Social and overGovernance (“ESG”) initiatives. The Board, alongside management, continued to actively engage with shareholders to seek their input and provide perspective on our policies and practices. Last fall, we held a virtual ESG Investor Day where members of our Board and management team engaged with a number of our shareholders. In addition to discussing our sustainability efforts and our approach to diversity and inclusion, we had meaningful and candid
discussions about our corporate governance practices. This shareholder feedback continues to inform our regular review of our corporate governance practices, and the last decade,Board has decided to evolve to a more standard large-cap governance structure. At our annual meeting, we werewill present management proposals to declassify our board, remove supermajority voting provisions in our charter and bylaws, and enable shareholders to call special meetings. We will also change the highest-returning stockvoting standard for our directors in uncontested elections. We believe that these changes are appropriate given that we’ve proven the streaming business model, we are self-funding and expect sustained positive annual free cash flow, and we have substantially scaled our revenues, operating profit and margin. More details on the proposals and these changes are provided in the S&P 500. As consumers shift away from linear television,following pages.
We recently published our third ESG Report and our second Inclusion Report. These reports provide updates on our important efforts to support the diversity of our employee base as we seek to continue to redefine how the world watches movies and TV shows. I’m honored to be a part of this consumer-centric company.
To continue tobetter serve our members, advance our sustainability efforts and, most importantly, reinforce our commitment to transparency that is central to how we must be nimble and we must have the flexibility to plan and execute for the long term. Parts of our governance structure and our compensation program don’t fit the typical mold – we pay our employees with only cash and stock options, and we have a culture of transparency, providing the Board broad access to information and management as well as their decision making process. We believe these features have contributed to our success, but are also willing to revisit our positions. In 2019, we adopted proxy access for director elections.at Netflix operate.
Our recent say on pay vote showed that there are concerns about our unique approach to pay. We welcome the input from our shareholders and have gained valuable insights during our conversations with many of you throughout the past year. We appreciate the time you shared with us. We take your feedback seriously and hope that you value our willingness as a board to do what we believe is in the best interest of our shareholders, even when my fellow board members and I feel the consequences in the form of withhold votes.
A theme we heard frequently during our discussions was a call for clearer and more transparent disclosure. In response to this feedback we published an ESG report, referencing SASB’s reporting framework for the “Internet & Media Services” and “Media & Entertainment” industries. We have also enhanced
this proxy statement, with the intent of providing clearer discussion of our governance and approach to executive compensation. We hope that we’ve made this year’s proxy easier to read.
We are proud of the role Netflix plays not only in entertaining our members but also ensuring more people see their lives and cultures reflected on screen. On behalf of the Board, we thank you for your investment and wish you and your families good health.
Warm regards,
Jay C. Hoag
Lead Independent Director
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Notice of Annual Meeting
Notice of Annual Meeting of Stockholders to be Held on June 2, 2022 To the Stockholders of Netflix, Inc.: NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of Netflix, Inc., a Delaware corporation (the “Company”), will be held on June 2, 2022 at 3:00 p.m. Pacific Time (“Annual Meeting”). You can attend the Annual Meeting via the internet and vote your shares electronically by visiting www.virtualshareholdermeeting.com/NFLX2022 (there is no physical location for the Annual Meeting). You will need to have your 16-Digit Control Number included on your Notice or your proxy card (if you received a printed copy of the proxy materials) to join the Annual Meeting. THE ANNUAL MEETING WILL BE HELD FOR THE FOLLOWING PURPOSES:
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| 1. | To elect four Class II directors to hold office until the |
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| 3. | To consider a management proposal to eliminate supermajority voting provisions; |
| 4. | To consider a management proposal to create a new stockholder right to call a special meeting; |
| 5. | To ratify the
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These business items are described more fully in the Proxy Statement accompanying this Notice. Only stockholders who owned our common stock at the close of business on April 4, 2022 can vote at this meeting or any adjournments that may take place.
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING VIA THE INTERNET.
For ten days prior to the Annual Meeting, a complete list of the stockholders entitled to vote at the meeting will be available for examination by any stockholder for any purpose germane to the meeting. Due to the COVID-19 pandemic, please email board@netflix.com to make arrangements to examine the stockholder list. The stockholder list will also be available during the Annual Meeting by visiting www.virtualshareholdermeeting.com/NFLX2022 and entering your 16-Digit Control Number.
By order of the Board of Directors
David Hyman
Chief Legal Officer and Secretary
April , 2022
Los Gatos, California
YOUR VOTE IS IMPORTANT. PLEASE VOTE OVER THE INTERNET, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING VIA THE INTERNET. IF YOU RECEIVED A PAPER PROXY CARD AND VOTING INSTRUCTIONS BY MAIL, PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING VIA THE INTERNET.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 2, 2022: THIS PROXY STATEMENT, THE NOTICE OF ANNUAL MEETING OF STOCKHOLDERS AND THE ANNUAL REPORT ARE AVAILABLE AT WWW.PROXYVOTE.COM.
| Dilution, Burn Rate and Equity Overhang | 55 | |
| Determining Executive Compensation Magnitude | 56 | |
| Elements of Executive Compensation | 57 | |
| Executive Compensation in 2021 | 59 | |
| Named Executive Officer Compensation for 2022 | 61 | |
| Termination-Based Compensation and Change in Control Retention Incentives | 61 | |
| Tax Considerations | 62 | |
| Prohibition on Hedging | 62 | |
| Clawback of Performance-Based Awards | 63 | |
| Compensation Risk | 63 | |
| Code of Ethics | 63 | |
| Compensation Committee Report | 64 | |
| Compensation of Named Executive Officers and Other Matters | 65 | |
| Summary Compensation Table | 66 | |
| Grants of Plan-Based Awards | 67 | |
| Outstanding Equity Awards at Fiscal Year-End | 69 | |
| Option Exercises | 79 | |
| Potential Payments upon Termination or Change-in-Control | 79 | |
| Pay Ratio Disclosure | 79 | |
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| 84 | ||
| Other Information | 88 | |
| 89 | ||
| Equity Compensation Plan Information | 91 | |
| Stockholders Sharing an Address | 91 | |
| Other Matters | 92 | |
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INFORMATION CONCERNING SOLICITATION AND VOTING
Solicitation and Voting
General
The attached proxy is solicited on behalf of the Board of Directors (the “Board”) of Netflix, Inc., a Delaware corporation (the “Company,” “Netflix,” “we,” “us” or “our”), for use at the annual meeting of stockholders to be held on June 2, 2022, at 3:00 p.m. Pacific Time (the “Annual Meeting”), or at any adjournment or postponement of this meeting, for the purposes set forth in this Proxy Statement and in the accompanying Notice of Annual Meeting of Stockholders and form of proxy. This year’s Annual Meeting will be held entirely via the internet and will be conducted by our Chief Legal Officer and Secretary. Stockholders may participate in the Annual Meeting by visiting the following website: www.virtualshareholdermeeting.com/NFLX2022. To participate in the Annual Meeting, you will need the 16-digit control number included on your Notice, on your proxy card or on the instructions that accompanied your proxy materials. We encourage you to access the Annual Meeting webcast prior to the start time. Online check-in will begin at 2:45 p.m. Pacific Time, and you should allow ample time for the check-in procedures. If you encounter any difficulties accessing the virtual meeting during the check-in or meeting time, please call the technical support number that will be posted on the virtual shareholder meeting log in page.
Hosting the Annual Meeting via the internet provides expanded access, reduced environmental impact and cost savings for our stockholders and the Company. Hosting a virtual meeting enables increased stockholder attendance and participation. In addition, we intend for the virtual meeting format to provide stockholders a similar level of transparency to the traditional in person meeting format. As a longstanding practice for many years, our stockholders are able to submit questions four times a year as part of our quarterly earnings interview, and answers to top investors’ questions are available on our Investor Relations website at https://ir.netflix.net. As such, questions at our Annual Meeting will be limited to those for our auditors, if any. Instructions on how to ask questions for our quarterly earnings interviews are found in the press release announcing the date on which we will release each quarter’s earnings results.
Pursuant to rules promulgated by the Securities and Exchange Commission (“SEC”), we have elected to provide access to our proxy materials over the internet. Accordingly, we will mail, on or about April , 2022, a Notice of Internet Availability of Proxy Materials to stockholders of record and beneficial owners as of the close of business on April 4, 2022, referred to as the Record Date. On the date of mailing of the Notice of Internet Availability of Proxy Materials, all stockholders will have the ability to access all of the proxy materials at https://ir.netflix.net/financials/annual-reports-and-proxies/default.aspx. Should you request it, we will make paper copies of these proxy materials available free of charge. To request a copy, please send your request to our Secretary at the address listed below.
Our principal executive offices are located at 100 Winchester Circle, Los Gatos, California 95032, and our telephone number is (408) 540-3700. Our internet website address is www.netflix.com. You may find our SEC filings, including our annual reports on Form 10-K, on our Investor Relations website at https://ir.netflix.net/financials/sec-filings/default.aspx.
Revocability of Proxies
You may change your vote at any time prior to the vote at the Annual Meeting. If you are a stockholder of record as of the Record Date, you may change your vote by granting a new proxy bearing a later date (which automatically revokes the earlier proxy), by providing a written notice of revocation to our Secretary at the address above prior to your shares being voted, or by attending the Annual Meeting and voting via the internet. Attendance at the Annual Meeting will not cause your previously granted proxy to be revoked unless you specifically make that request. For shares you hold beneficially in the name of a broker, trustee or other nominee, you may change your vote by submitting new voting instructions to your broker, trustee or nominee, or, if you have obtained a legal proxy from your broker or nominee giving you the right to vote your shares, by attending the Annual Meeting and voting via the internet.
2022 Proxy Statement |
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Voting and Solicitation
Only stockholders of record at the close of business on the Record Date will be entitled to notice of and to vote at the Annual Meeting. At the close of business on the Record Date, there were 444,273,850 shares of common stock outstanding and entitled to vote. Each holder of record of shares of common stock on that date will be entitled to one vote for each share held on all matters to be voted upon at the Annual Meeting.
You may vote via the internet by going to www.proxyvote.com and following the instructions on the screen. As explained in greater detail in the Notice of Internet Availability of Proxy Materials, to vote your shares, you may vote via the internet by visiting www.proxyvote.com and having available your 16-digit control number(s) contained on your Notice of Internet Availability of Proxy Materials. If you received your proxy materials by mail, you may vote by completing the enclosed proxy card, dating and signing it and returning it in the postage-paid envelope provided, or you may vote by phone by following the instructions on your proxy card. You may vote via the internet or by phone up until 8:59 p.m. Pacific Time on June 1, 2022. If you vote by mail, your proxy card must be received by June 1, 2022. If you are a stockholder of record on the Record Date, you can participate in the Annual Meeting online at www.virtualshareholdermeeting.com/NFLX2022 and vote your shares during the Annual Meeting.
Properly delivered proxies will be voted at the Annual Meeting in accordance with the specifications made. Where no specifications are given, such proxies will be voted “FOR” all nominees, “FOR” proposals Two through Six, and “AGAINST” proposals Seven and Eight. It is not expected that any matters other than those referred to in this Proxy Statement will be brought before the Annual Meeting. If, however, any matter not described in this Proxy Statement is properly presented for action at the Annual Meeting, the persons named as proxies in the enclosed form of proxy will have authority to vote according to their own discretion.
The required quorum for the transaction of business at the Annual Meeting is the presence via the internet or by proxy of holders of a majority of the stock issued and outstanding and entitled to vote at the Annual Meeting as of the Record Date. Shares that are voted “FOR,” “AGAINST,” “WITHHOLD” or “ABSTAIN,” referred to as the Votes Cast, are treated as being present at the Annual Meeting for purposes of establishing a quorum. An abstention will have the same effect as a vote against proposals Two through Eight. Broker non-votes will be counted for purposes of determining the presence or absence of a quorum for the transaction of business, but such non-votes will not be counted for purposes of determining the number of Votes Cast with respect to any proposal. Thus, a broker non-vote will not affect the outcome of the voting on proposals One through Eight. A “broker non-vote” occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that proposal and has not received instructions with respect to that proposal from the beneficial owner.
If you hold your shares through a broker, bank or other nominee (“street name”) it is critical that you cast your vote if you want it to count in the election of directors (Proposal One of this Proxy Statement), any of the management proposals (Proposals Two, Three, Four and Five of this Proxy Statement), advisory approval of executive officer compensation (Proposal Six of this Proxy Statement), or any of the stockholder proposals (Proposals Seven and Eight of this Proxy Statement). Thus, if you hold your shares in “street name” and you do not instruct your bank or broker how to vote in the election of directors, no vote will be cast on your behalf on these proposals.
The cost of soliciting proxies will be borne by us. We may reimburse banks and brokers and other persons representing beneficial owners for their reasonable out-of-pocket costs. Our officers, directors and others may solicit proxies, personally or by telephone, facsimile or electronic mail, without additional compensation. If you vote using the internet or by phone, you may incur data or telephone usage charges from internet access providers or phone companies. We will not reimburse those costs.
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Stockholder Proposals
Stockholder proposals that are intended to be presented at our 2023 annual meeting of stockholders in our proxy materials for such meeting must comply with the requirements of SEC Rule 14a-8 and must be received by our Secretary no later than December 23, 2022 in order to be included in our Proxy Statement and proxy materials relating to our 2023 annual meeting of stockholders.
Stockholder nominations for director that are intended to be presented at our 2023 annual meeting of stockholders in our proxy materials for such meeting must comply with our bylaws and must be received by our Secretary no earlier than November 23, 2022 and no later than December 23, 2022 in order to be considered for inclusion in our Proxy Statement and proxy materials relating to our 2023 annual meeting of stockholders. A stockholder proposal or a nomination for director or any other matter that will not be included in our Proxy Statement and proxy materials, but that a stockholder intends to present via the internet at the meeting, must generally be submitted to our Secretary no earlier than February 6, 2023, and no later than March 8, 2023. Such proposal or nomination must also comply with the requirements set forth in our bylaws. Proposals and nominations should be mailed to: Netflix, Inc., 100 Winchester Circle, Los Gatos, California 95032, Attention: Secretary. Our bylaws have been filed with the SEC and are available at www.sec.gov.
2022 Proxy Statement | 5 |
Review
Business Highlights
We achieved several milestones in 2021: we had the biggest TV show of the year (Squid Game), our two biggest film releases of all time (Red Notice and Don’t Look Up) and Netflix was the most Emmy-winning and most nominated TV network and the most Oscar-winning and nominated movie studio of 2021. In 2021, we had approximately 222 million paid memberships, and financial highlights for 2021 included achieving approximately $30 billion in annual revenue, representing 19% year-over-year growth, and over $6 billion in operating income, representing 35% year-over-year growth.
Executive Leadership
We have had a Co-Chief Executive Officer structure since 2020, when Ted Sarandos was named Co-Chief Executive Officer along with Reed Hastings. This change mostly formalized the prior working relationship between Ted and Reed, who have had a long history of collaboration on corporate strategy, planning and all aspects of company management. We believe the Co-CEO structure provides broad expertise and deep leadership at the highest level of the Company, and provides an efficient and effective leadership model to support our future growth.
In September 2021, we hired Sergio Ezama as our Chief Talent Officer to lead our talent organization. Mr. Ezama brings over 20 years of experience scaling global talent teams. His truly global perspective is critical as Netflix continues to build teams around the world to support the growth of our business and organization. In March 2022, Marian Lee became Netflix’s Chief Marketing Officer. Ms. Lee previously served as Vice President of Marketing for Netflix in the United States and Canada (“UCAN”) region. She has deep experience in entertainment having previously served as Spotify’s Vice President, Global Co-Head of Music. Additionally, Ms. Lee worked at various companies, including J.Crew, Gilt, Conde Nast, and Vogue.
Board Composition
Ambassador Susan Rice resigned from the Board effective January 20, 2021. More information on each Board member can be found in the section titled, “Proposal 1: Our Board of Directors—Election of Directors—Who We Are.”
Response to COVID-19
The COVID-19 pandemic continued to significantly impact the media and entertainment industry, including our business and operations. We were able to adapt our business operations to resume most of our productions, though certain of our productions continue to experience disruption, as do the productions of our third-party content suppliers. The Board and management team continue to actively monitor the situation and alter our business operations as may be required by federal, state, local or foreign authorities, or that we determine are in the best interests of our employees, customers, partners and shareholders. Our hope is that with increasing accessibility to vaccines in our major production locations that the worst of the pandemic is behind us.
Inclusion and Diversity
Our company culture remains an important aspect of our operations. As we have expanded our offices globally, we have also become mindful of cultural differences across and within regions. Fostering a work environment that is culturally diverse and inclusive is a major focus for us. Our Talent Organization, with the support of a dedicated team, works on building diversity and inclusion into all aspects of our operations globally. We want more people and cultures to see themselves reflected on screen—so it’s important that our employee base is as diverse as the communities we serve.
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We published our second annual Inclusion Report on our website that provides a snapshot of representation within the Company, how we plan to increase it, and how we cultivate a community of belonging and allyship. We also published our U.S. Employer Equal Opportunity data (EEO-1 data) reaching back to our 2014 filing.
We support a broad range of employee resource groups (ERGs), representing employees from many historically underrepresented and/or marginalized communities. Our ERGs are important in creating a more inclusive environment for all employees, allowing space to connect on shared experiences, and providing mentoring, career development and volunteering opportunities. Each ERG is supported by senior leaders across the Company.
Environment
In 2021, Netflix advanced its public corporate sustainability goals through a variety of initiatives. We (a) committed to short-term and long-term science-based emissions reduction targets for our operations and suppliers, (b) made good progress reducing energy use and decarbonizing our electrical supply, (c) piloted clean technology and transport on productions, and (d) invested in the protection of nature-based carbon sinks and removals. More details are available in our most recent ESG Report published in March 2022 on our Investor Relations website.
Transparency
We are committed to continued stockholder engagement and transparency and provide comprehensive information about our ESG initiatives and activities on our Investor Relations website. In response to input from our stockholders, we began publishing in 2020 an Environmental Social Governance report that covers our ESG performance for the prior year. We use the Sustainability Accounting Standards Board (SASB) reporting framework for the “Internet & Media Services” and “Media & Entertainment” industries. In 2022, in response to a stockholder proposal and interest from stockholders for more information about our political activities, we began publishing a report about our political contributions, which to date, have been limited. The ESG Reports, Inclusion Reports, EEO-1 data and other ESG information are available at ir.netflix.net.
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Each nominee has extensive business experience, education and personal skills that qualifies him or her to serve as an effective Board member. The specific experience, qualifications and skills of Mr. Hastings, Mr. Hoag and Mr. Döpfner are set forth below. The Nominating Committee evaluates potential candidates for service on the Board. Mr. Döpfner was recommended by executive officers of the Company.
Required Vote
Directors Standing for Election
Four Class II directors, Timothy Haley, Leslie Kilgore, Strive Masiyiwa and Ann Mather, are to be elected at the Annual Meeting. Unless otherwise instructed, the proxy holders will vote the proxies received by them for Mr. Haley, Ms. Kilgore, Mr. Masiyiwa and Ms. Mather, each of whom is currently a director of the Company. If any of Mr. Haley, Ms. Kilgore, Mr. Masiyiwa and Ms. Mather is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for a substitute nominee designated by the Board to fill the vacancy. Each of Mr. Haley, Ms. Kilgore, Mr. Masiyiwa and Ms. Mather has agreed to serve as a director of the Company if elected. The term of the office of directors elected at this Annual Meeting will continue until the annual meeting of stockholders held in 2025 or until such director’s successor has been duly elected or appointed and qualified, or until their earlier resignation or removal.
We are also presenting a proposal to declassify the Board (management proposal 2). If that proposal receives sufficient stockholder support, starting in 2023, directors will stand for one-year terms, with the full Board standing for annual election starting in 2025.
Nominee | Age | Principal Occupation | ||
| 67 | Managing Director, Redpoint Ventures | ||
Leslie Kilgore | 56 | Former Chief Marketing Officer of | ||
Strive Masiyiwa | 61 | Chairman and founder of Econet Global | ||
Ann Mather | 62 | Former Chief Financial Officer of Pixar | ||
Each nominee has extensive business experience, education and personal skills that qualifies him or her to serve as an effective Board member. The specific experience, qualifications and skills of Mr. Haley, Ms. Kilgore, Mr. Masiyiwa and Ms. Mather are set forth below. The Nominating and Governance Committee evaluates potential candidates for service on the Board. Mr. Masiyiwa was recommended by executive officers of the Company.
Required Vote
The four nominees receiving the highest number of affirmative Votes Cast will each be elected as Class II directors.
Netflix Recommendation
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2022 Proxy Statement |
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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 DVD-by-mail company to a global streaming company to one of the leading entertainment companies in the world, while effectively managing risk and overseeing management performance.
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BOARD TENURE Board | GENDER DIVERSITY A quarter of directors are women. | |
 | STRATEGY ALIGNMENT Our Board expertise that aligns with these important facets of |
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Our Directors
Directors standing for election:
DIRECTOR SINCE: 1998 AGE: 67 COMMITTEES: COMPENSATION (CHAIR) CLASS: II | Timothy Haley | INDEPENDENT DIRECTOR | ||||
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, Inc. • Zuora, Inc. | ||||||
DIRECTOR SINCE: 2012 (INDEPENDENT SINCE 2015) AGE: 56 COMMITTEES: AUDIT CLASS: II | Leslie Kilgore | INDEPENDENT DIRECTOR | ||||
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 • Pinterest, Inc. • Nextdoor Holdings, Inc. | ||||||
2022 Proxy Statement | 11 |
DIRECTOR SINCE: 2020 AGE: 61 COMMITTEES: NOMINATING AND GOVERNANCE1 CLASS: II | Strive Masiyiwa | INDEPENDENT DIRECTOR | ||||
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 | ||||||
DIRECTOR SINCE: 2010 AGE: 62 COMMITTEES: AUDIT (CHAIR, FINANCIAL EXPERT) CLASS: II | Ann Mather | INDEPENDENT DIRECTOR | ||||
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), Glu Mobile Inc., a publisher of mobile games (2005-2021) and Airbnb, Inc., a vacation rental online marketplace company (2018-2021). 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 Inc. • Arista Networks, Inc. (Ms. Mather has announced that she will not stand for re-election and intends to resign from the board of directors of Arista Networks effective as of its 2022 annual meeting.) • Blend Labs, Inc. • Bumble Inc. | ||||||
| 1 | Mr. Masiyiwa was appointed to the Nominating and Governance Committee in March 2022. |
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Directors not standing for election:
DIRECTOR SINCE: 2002 AGE: 54 COMMITTEES: AUDIT CLASS: I (EXPIRES 2024) | Richard Barton | INDEPENDENT DIRECTOR | ||||
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, including Altimeter Growth Corp. from 2020-2021 and Altimeter Growth Corp. 2 from 2021-2022. Mr. Barton holds a B.S. in general engineering: industrial economics from Stanford University. Career Snapshot: • Co-founder and Chief Executive of Zillow-Group (2005-2011 and 2019-present) • Co-founder and Chairman of GlassDoor (2007-2018) • Founder and Chief Executive Officer of Expedia (1996-2003) Other Public Company Boards • Qurate Retail, Inc. (formerly Liberty Interactive Corporation) • Zillow Group, Inc. | ||||||
DIRECTOR SINCE: 2018 AGE: 52 COMMITTEES: COMPENSATION CLASS: I (EXPIRES 2024) | Rodolphe Belmer | INDEPENDENT DIRECTOR | ||||
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 Atos SE, global leader in digital transformation (since 2022) • CEO and director of Eutelsat, the leading satellite operator in Europe, the Middle East and Africa (2016-2021) • CEO of Canal + Group (2012-2015); various additional roles since joining in 2001 Other Public Company Boards • None | ||||||
2022 Proxy Statement | 13 |
DIRECTOR SINCE: 2018 AGE: 59 COMMITTEES: COMPENSATION CLASS: III (EXPIRES 2023) | Mathias Döpfner | INDEPENDENT DIRECTOR | ||||
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 Corp. | ||||||
DIRECTOR AND CHAIRPERSON SINCE:1997 AGE: 61 COMMITTEES: NONE CLASS: III (EXPIRES 2023) | Reed Hastings | CO-CHIEF EXECUTIVE OFFICER AND PRESIDENT OF THE COMPANY, AND CHAIRPERSON OF THE BOARD | ||||
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 Chairperson of Netflix (since 1997) • Founder, Pure Software (1991) through IPO (1995) and ultimate sale to Rational Software Other Public Company Boards • None | ||||||
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6 NETFLIX
Our Directors
DIRECTOR SINCE:1999
Directors standingAGE: 63
COMMITTEES:
NOMINATING AND
GOVERNANCE (CHAIR)
CLASS: III (EXPIRES 2023)
Jay C. Hoag
LEAD INDEPENDENT DIRECTOR
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 election:more than 39 years, involved in numerous technology investments including Altiris (acquired by Symantec), CNET, Expedia, Facebook, Fandango (acquired by Comcast), Intuit, Sybase, Ascend Communications (acquired by Lucent Technologies), Airbnb, Peloton, and Zillow. 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 served on the board of directors of a number of other public and private companies, including TechTarget, Inc. from 2004-2016, Electronic Arts from 2011-2021, and Prodege from 2014-2021. Mr. Hoag holds an M.B.A. from the University of Michigan and a B.A. from Northwestern University.
Career Snapshot:
• Founding General Partner of TCV (Technology Crossover Ventures), a venture capital firm (since 1995)
Other Public Company Boards
• Peloton Interactive, Inc.
• TCV Acquisition Corp.
• TripAdvisor, Inc.
• Zillow Group, Inc.
2022 Proxy Statement | 15 |
DIRECTOR SINCE: 2020 AGE: 57 COMMITTEES: NONE CLASS: III (EXPIRES 2023) | Ted Sarandos | CO-CHIEF EXECUTIVE OFFICER AND CHIEF CONTENT OFFICER OF THE COMPANY | ||||
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 Technology S.A. | ||||||
DIRECTOR SINCE: 2015 AGE: 63 COMMITTEES: NOMINATING AND GOVERNANCE CLASS: I (EXPIRES 2024) | Brad Smith | INDEPENDENT DIRECTOR | ||||
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 Vice Chair of Microsoft (since 2021); he originally joined Microsoft in 1993 • Associate and then Partner, Covington & Burling (1986-1993) Other Public Company Boards • None | ||||||
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12 NETFLIX
Board Skills and Experience
DIRECTOR SINCE: 2015
AGE: 64
COMMITTEES:
COMPENSATION
CLASS: I (EXPIRES 2024)
Anne Sweeney
INDEPENDENT DIRECTOR
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
2022 Proxy Statement | 17 |
Board 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 shareholders’ interests. Below are a number of skills 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.
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DIRECTOR INDEPENDENCE The Board has determined that each of Messrs. Barton, Belmer, Döpfner, Haley, Hoag, Masiyiwa and Smith, and Mses. Kilgore, Mather, and Sweeney are independent under the applicable rules of the SEC and the 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 standards. In addition, the Board determined that Ambassador Rice was independent during the time she served on the Board.
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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 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 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.
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.
Stockholder 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.
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.
are Governed
Our Approach to Corporate Governance
Corporate Governance Philosophy
Netflix operates in a highly competitive industry and has been in a state of constant innovation since inception. We have redefined how people watch video entertainment—first through DVD-by-mail, then streaming video, and now as one of the world’s leading entertainment services with approximately 222 million memberships in 190 countries. We compete with a broad set of activities for consumers’ leisure time including linear TV, video games, and social media to name just a few - and that competition has only increased as this dynamic market continues to evolve and entertainment companies all around the world develop their own streaming offering.
Our corporate governance structure is built against this backdrop. Governance, in this context, means finding the right balance of rights and responsibilities among shareholders, 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 current governance structure, while unconventional, has served our shareholders extraordinarily well with a sustained period of substantial growth. We have, however, clearly proven our business model: streaming is now an established business, we’re self-funding and expect sustained positive free cash flow, and we’ve substantially scaled our revenues, operating profit and margin. Additionally, we have paid attention to our shareholders and increased our accountability to them by adopting provisions such as proxy access, and have continued to consider perspectives from our shareholders to inform our ongoing evaluation of our structure. As part of the regular governance review, the Netflix Board has decided to evolve to a more standard large-cap governance structure. We are presenting a proposal to declassify the Board and, if approved, will elect directors to one-year terms starting in 2023 with the entire Board standing for annual elections in 2025 and beyond. We are also presenting proposals to remove supermajority voting provisions in our Restated Certificate of Incorporation (our “Charter”) and provide shareholders with the ability to call special meetings. This proxy contains management proposals to effectuate these matters. We will also change the voting standard for our directors in uncontested elections, to be effective after our 2022 Annual Meeting.
We are seeking to implement these changes in a timely fashion, yet in a manner that also allows a smooth transition to the new governance structure. In this regard, our directors will be elected for a three-year term this year, but assuming passage of the declassification proposal, elections beginning in 2023 will be for a one-year term. The supermajority standard will also be eliminated for subsequent elections should the proposal succeed. With respect to a shareholder right to call a special meeting, we seek to balance shareholder rights while recognizing that special meetings of shareholders can be potentially disruptive to long-term shareholders’ interests and to business operations, can be misused and can cause us to incur substantial expenses. Accordingly, we are proposing a 20% “net-long” threshold for calling special meetings of shareholders, coupled with a 1-year holding period, to help to balance these considerations, ensuring that special meetings can be called by shareholders with a significant and durationally meaningful interest in the Company but are less likely to be disruptive to the Company and its operations and be more likely to address matters that merit the unusual step of convening a meeting in advance of the regularly scheduled annual meeting process. We note that the 20% threshold is common: of the approximately 64% of S&P 500 companies that allow shareholders to call special meetings, more than two-thirds have set the threshold at 20% or higher. (FactSet financial data and analytics)
Following our 2022 Annual Meeting, the Board will amend our bylaws to provide that directors shall be elected by a majority of the votes cast in an uncontested election. The plurality vote standard will remain for contested elections. We will also adopt a market standard director resignation policy, which will permit the Board to accept or reject such resignation after taking into account any factors or information it believes are appropriate and relevant.
2022 Proxy Statement |
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We believe that the above approach will allow us to successfully transition to a more standard governance structure in a manner that benefits all Netflix shareholders.
Stockholder Engagement and 2021 Stockholder Proposals
We are dedicated to engaging with our stockholders to solicit their views on a wide variety of issues, including corporate governance, environmental and social matters, executive compensation and other matters. Over the past several years, in response to stockholder feedback, and as part of our ongoing evaluation of best practices, the Board has incorporated enhancements to our disclosures and corporate governance practices as set forth below.
2022:
January
Announced intention to make governance changes, including removal of supermajority provisions, providing stockholders the ability to call special meetings, declassification of the Board and changing the voting standard for our directors in uncontested elections
Began publishing on our Investor Relations website disclosure regarding our political activities, including our political contributions, which to date have been limited
2021:
January
Published our first Inclusion Report
Published our EEO-1 reports
2020:
March
Published our first Environmental Social Governance (“ESG”) Report using the Sustainability Accounting Standards Board (SASB) reporting framework for the “Internet & Media Services” and “Media & Entertainment” industries, which is published annually
Updated our insider trading policy to prohibit certain hedging and pledging transactions
April
Significantly enhanced readability and presentation of our proxy statement, including proxy disclosures of director qualifications and skills
2019:
March
Implemented proxy access bylaws
At our 2021 annual meeting, stockholders presented three proposals for vote. One proposal requested additional disclosure around political spending and received 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 received majority support from stockholders. The third proposal sought inclusion of CEO pay ratio and other factors in our executive compensation philosophy and received less than 4% support from stockholders. After last year’s annual meeting and engagement with stockholders, we began disclosing our political activities, including a summary of our political contributions, on our Investor Relations website and are bringing a management proposal at this year’s Annual Meeting to eliminate the supermajority provisions in our Charter.
In 2021, we continued our engagement with shareholders to solicit feedback on a broad range of topics, including these stockholder proposals. We held a virtual ESG Investor Day in November 2021, with participation from a number of our shareholders, members of the Board and participants from our management team including our co-CEOs, and those responsible for sustainability, diversity and inclusion, finance, content, communications and public policy. Our conversations with shareholders during those sessions included governance structure, financial and business strategy, content issues, Netflix’s current actions and goals around decarbonizing our operations while spurring change among our supply chain, and our ongoing focus on diversity, equity and inclusion – for employees and others making content, both on and off screen. Q&A
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from participants also touched on the role of the Board in ESG, appropriate risk assessment, how the Board considers compensation in the context of competition for talent and considerations of various types of equity awards. Reed Hastings and Ted Sarandos also provided perspectives on business strategy and state of the business, and their functioning as co-CEOs. Shareholders were able to submit questions in advance as well as posing them in real time, and this dialogue was transparent to all of those in attendance. We heard feedback similar to that in prior years, that while some shareholders understood the rationale for our current governance structure, many indicated they strongly supported a change to a more standard model. Shareholders were generally positive on the increase in transparency around diversity, equity and inclusion issues as well as our increasing environmental initiatives and our focus on employee well-being. The feedback on our compensation program was limited, and while we did not hear thematic concerns about our compensation program, during the director session one shareholder questioned whether the compensation committee had considered moving from options to a direct grant of shares (whether RSUs or some other form of share grant).
The Board considered this feedback in its ongoing consideration of our governance structure, as well as that of past engagements and the results of prior shareholder votes. As the Board considered the current state of the business, including our proven business model and the acceptance of streaming as an established business, directors determined that moving to a governance structure more in line with established companies was appropriate, and has made and proposed changes that shareholders have indicated that they prefer, including elimination of supermajority, the right to call a special meeting, annual elections of directors and a majority voting standard for uncontested director elections.
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 and oversees the Company’s ESG efforts. Each of the committees oversee various ESG matters, depending on the specific issues, with the Nominating and Governance Committee serving as the primary committee responsible for ESG matters. The Nominating and Governance Committee also manages risks associated with Board independence and corporate governance. The Audit Committee deals with matters of financial and legal risk, including cybersecurity risk. The Compensation Committee addresses risks related to compensation and other human capital management issues, such as diversity and inclusion efforts. Committees report to the full Board regarding their respective considerations and actions.
2022 Proxy Statement | 23 |
Board Meetings and Committees
The Board held four meetings during 2021. 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 2021, the Compensation Committee of the Board consisted of four non-employee directors: Messrs. Belmer, Döpfner, and Haley (Chair), and Ms. Sweeney. 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 three meetings in 2021. Each member attended all the Compensation Committee meetings held in 2021, other than Ms. Sweeney who did not attend one meeting.
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.
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 2021. Each member attended all of the Audit Committee meetings held in 2021.
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.
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Nominating and Governance Committee
In 2021, the Nominating and Governance Committee of the Board consisted 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. Mr. Masiyiwa was appointed to the Nominating and Governance Committee in March 2022. 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 2021. Each member attended all the Nominating and Governance Committee meetings held in 2021.
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 2021, the Compensation Committee consisted of Messrs. Belmer, Döpfner, and Haley, and Ms. Sweeney, none of whom is currently or was formerly an officer or employee of the Company. None of Messrs. Belmer, Döpfner, or Haley, 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, and Haley, and Ms. Sweeney, our Co-Chief Executive Officers and Chief Talent Officer participated in the executive compensation process for the year ended December 31, 2021 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 Chairperson 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 Chairperson 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 Chairperson and Co-Chief Executive Officer facilitates information flow between
2022 Proxy Statement | 25 |
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.
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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.
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Our directors do not 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 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: $25,000 / ([fair market value on the date of grant] x 0.40). Each monthly grant is made on the first trading day of the month, is fully vested upon grant and is exercisable at a strike price equal to the fair market value on the date of grant. The table below sets forth information concerning the compensation of our non-employee directors during 2021.
Compensia annually advises the Board on our Board compensation program for the upcoming year, based on a comparison against our peer group’s board compensation programs and other compensation-related developments. We have not made any changes to the compensation program for our Board since 2016.
The following table summarizes the compensation paid to all Board members for the year ended December 31, 2021, other than Reed Hastings and Ted Sarandos whose compensation is reflected in the Summary Compensation Table:
Name | Option Awards ($)(1) | Total ($) | ||||||
Richard N. Barton | 350,675 | 350,675 | (3) | |||||
Rodolphe Belmer | 350,437 | 350,437 | (4) | |||||
Mathias Döpfner | 350,415 | 350,415 | (5) | |||||
Timothy M. Haley | 350,675 | 350,675 | (6) | |||||
Jay C. Hoag | 350,675 | 350,675 | (7) | |||||
Leslie Kilgore | 350,675 | 350,675 | (8) | |||||
Strive Masiyiwa | 350,415 | 350,415 | (9) | |||||
Ann Mather | 350,675 | 350,675 | (10) | |||||
Susan E. Rice(2) | 31,285 | 31,285 | (11) | |||||
Bradford L. Smith | 350,675 | 350,675 | (12) | |||||
Anne M. Sweeney | 350,675 | 350,675 | (13) | |||||
| (1) | Option awards reflect the monthly grant of stock options to eachnon-employee director on the dates and at the aggregate grant date fair values computed in accordance with FASB ASC Topic 718 as shown below. Only options to purchase whole shares are granted with any remaining amount of the
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Name | Option Awards ($)1 | Total ($) | ||||||
Richard N. Barton | 366,555 | 366,555 | 2 | |||||
Rodolphe Belmer | 366,531 | 366,531 | 3 | |||||
Mathias Döpfner | 366,566 | 366,566 | 4 | |||||
Timothy M. Haley | 366,555 | 366,555 | 5 | |||||
Jay C. Hoag | 366,555 | 366,555 | 6 | |||||
Leslie Kilgore | 366,555 | 366,555 | 7 | |||||
Ann Mather | 366,555 | 366,555 | 8 | |||||
Susan E. Rice | 366,666 | 366,666 | 9 | |||||
Bradford L. Smith | 366,566 | 366,566 | 10 | |||||
Anne M. Sweeney | 366,566 | 366,566 | 11 | |||||
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Grant Date | Fair Value ($) | |||
1/4/2021 | 31,285 | |||
2/1/2021 | 31,178 | |||
3/1/2021 | 31,025 | |||
4/1/2021 | 29,257 | |||
5/3/2021 | 29,280 | |||
6/1/2021 | 29,170 | |||
7/1/2021 | 27,672 | |||
8/2/2021 | 27,860 | |||
9/1/2021 | 27,609 | |||
10/1/2021 | 28,783 | |||
11/1/2021 | 28,841 | |||
12/1/2021 | 28,716 | |||
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| (2) | Ambassador Susan Rice served on the Board through January 20, 2021. |
| (3) | Aggregate number of option awards outstanding held by Mr. Barton at December 31, 2021 was 32,765. | ||
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| (4) | Aggregate number of option awards outstanding held by Mr. Belmer at December 31, 2021 was 5,431. |
| (5) | Aggregate number of option awards outstanding held by Mr. Döpfner at December 31, 2021 was 6,007. | ||
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| (6) | Aggregate number of option awards outstanding held by Mr. Haley at December 31, 2021 was 38,715. |
| (7) | Aggregate number of option awards outstanding held by Mr. Hoag at December 31, 2021 was 13,127. | ||
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| (8) | Aggregate number of option awards outstanding held by Ms. Kilgore at December 31, 2021 was 12,594. |
| (9) | Aggregate number of option awards outstanding held by Mr. Masiyia at December 31, 2021 was 1,353. | ||
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| (10) | Aggregate number of option awards outstanding held by Ms. Mather at December 31, 2021 was 16,946. |
| (11) | Aggregate number of option awards outstanding held by Ms. Rice at December 31, 2021 was 0. | ||
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| (12) | Aggregate number of option awards outstanding held by Mr. Smith at December 31, 2021 was 24,761. | |||
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| (13) | Aggregate number of option awards outstanding held by Ms. Sweeney at December 31, 2021 was 9,594. |
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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.
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This management proposal seeks to provide for the phased-in elimination of the classified board of directors structure, which, when it is complete, will result in all directors standing for election annually for a one-year term.
As part of our continuous evaluation of corporate governance practices, our Board regularly reviews our governing documents and considers possible changes. While we believe our current governance structure has served our stockholders extraordinarily well with a sustained period of substantial growth, our Board, having heard our stockholders’ preferences expressed through our engagement with them and assessment of precatory proposals in recent years, has decided that it is in the best interests of the Company and our stockholders at this time to transition to a more standard large-cap governance structure, including by declassifying our Board.
Over the years, we have engaged with many of our stockholders who have indicated support for declassification. Additionally, following the initial announcement of our move toward an updated governance structure, we heard from a number of stockholders who conveyed their positive reactions to the governance changes, including declassification.
Currently, our Charter provides that the Board is divided into three classes, with members of each class serving for staggered three-year terms.
After considering the advantages and disadvantages of the classification of the Board at this time, the Board has approved, and recommends that stockholders approve, amendments to our Charter to eliminate the classified board structure and provide for annual election of directors, to be phased in as follows: (1) at the 2022 Annual Meeting, stockholders would have the opportunity to vote on the proposed Charter amendment that would implement phased-in declassification, with the Board recommending and soliciting in favor of the passage of the Charter amendment; (2) if such Charter amendment is approved this year, then the directors to be elected at the 2023 annual meeting of our stockholders and thereafter will be elected to one-year terms expiring at the next annual meeting; and (3) directors who were elected prior to the 2023 annual meeting would serve out their remaining terms, including the directors standing for election at this 2022 Annual Meeting for full three-year terms expiring at the 2025 annual meeting. As a result, beginning with the election of directors at the 2025 annual meeting, all directors will be elected for one-year terms and the classification of the Board will terminate. In addition, the proposed amendment to the Charter will specify, consistent with Delaware law, that as long as the Board is classified (that is, until the election of directors to be held at the 2025 annual meeting), directors may be removed only for cause.
The proposed Amended and Restated Certificate of Incorporation is attached to this Proxy Statement as Appendix A, which we would file promptly following the Annual Meeting if our stockholders approve this proposal (subject to revision as described below under “Partial Stockholder Approval of Recommended Charter Amendments” if our stockholders approve only some of the Charter amendment proposals recommended by the Board in this Proxy Statement). Certain conforming changes will be required to be made to our bylaws, contingent upon the effectiveness of the proposed amendment to the Charter. If the Charter amendment is approved, the Board will adopt the conforming changes to the bylaws (which do not require stockholder approval), with such changes as the Board may approve consistent with the amended Charter.
For the reasons discussed above, the Board believes it is in the best interests of the Company and our stockholders at this time to implement this proposal for the phased-in elimination of the classified board of directors structure.
Partial Stockholder Approval of Recommended Charter Amendments
We are submitting, and the Board unanimously recommends that you vote “FOR”, three separate proposals to amend our Charter: Proposal 2 to declassify our Board; Proposal 3 to eliminate supermajority voting provisions; and Proposal 4 to create a new stockholder right to call a special meeting. If all three Board-recommended Charter amendment proposals are approved by our stockholders, all of the changes contained in the proposed Amended and Restated Certificate of Incorporation attached to this Proxy Statement as Appendix A will be made. However, approval of each Board-recommended Charter amendment
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proposal is not contingent on approval of the others, and if only some, but not all, of the Board-recommended Charter amendment proposals are approved by our stockholders, amendments to our Charter contained in Appendix A will made as follows:
Amendment to Article VI, paragraph A will be made as set forth in Appendix A only if Proposal 2 is approved by our stockholders;
Amendment to Article VII and Article IX will be made as set forth in Appendix A only if Proposal 3 is approved by our stockholders;
Amendment to Article V, paragraph D will be made as set forth in Appendix A only if Proposal 4 is approved by our stockholders;
Amendment to Article VI, paragraph D will be made as set forth in Appendix A only if both Proposal 2 and Proposal 3 are approved by our stockholders. If Proposal 2 is approved by our stockholders but Proposal 3 is not, Article VI, paragraph D will be amended such that removal of directors from the Board may only be for cause until the election of directors at our 2025 annual meeting and thereafter may be made with or without cause, but such removal will continue to require the affirmative vote of the holders of at least 66 2/3 percent (66 2/3%) of the voting power of all of the then outstanding shares of our capital stock then entitled to vote at the election of directors, voting together as a single class. If Proposal 3 is approved by our stockholders but Proposal 2 is not, Article VI, paragraph D will be amended such that the Supermajority Voting Requirement would no longer apply to removal of directors but such removal may only be for cause. If neither Proposal 2 nor Proposal 3 is approved by our stockholders, no amendment to Article VI, paragraph D will be made; and
All other amendments set forth in Appendix A will be made if any of Proposal 2, Proposal 3, or Proposal 4 is approved by our stockholders.
Required Vote
The affirmative vote of the holders of 66 2/3 percent (66 2/3%) of the voting power of the shares of voting stock entitled to vote generally in the election of directors, voting together as a single class, is required to approve this proposal pursuant to the Charter.
Netflix Recommendation
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2022 Proxy Statement |
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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.
This management proposal seeks to eliminate all supermajority voting provisions set forth in our Charter.
As part of our continuous evaluation of corporate governance practices, our Board regularly reviews our governing documents and considers possible changes. While the Board recognizes that supermajority voting requirements can promote stability and protect stockholders by requiring broad stockholder support for certain fundamental changes, and notes that we believe our current governance structure has served our stockholders extraordinarily well with a sustained period of substantial growth, the Board, having heard our stockholders’ preferences expressed through their engagement with us and their assessment of precatory proposals in recent years, has decided that it is in the best interests of the Company and our stockholders at this time to recommend that our stockholders adopt amendments to our Charter to eliminate all supermajority voting requirements.
Over the years, we have engaged with many of our stockholders who have indicated support for the elimination of supermajority voting provisions. Additionally, following the initial announcement of our move toward an updated governance structure, we heard from a number of stockholders who conveyed their positive reactions to the governance changes, including the elimination of supermajority voting provisions.
Currently, our Charter provides that certain amendments to our Charter or bylaws require the affirmative vote of the holders of at least 66 2/3% of the voting power of the then-outstanding shares of voting stock entitled to vote generally in the election of directors, voting together as a single class (the “Supermajority Voting Requirement”).
Specifically, Article IX of our Charter provides that any amendment or repeal of any of the Charter provisions listed below must be approved pursuant to the Supermajority Voting Requirement:
Authority of the Board and Annual and Special Meeting of Stockholders (Article V)
Election of the Board (Article VI)
Amendment to the Bylaws (Article VII)
Indemnification (Article VIII)
Amendment to the Charter (Article IX)
Article VII of our Charter provides that any amendment or repeal of any of the bylaw provisions listed below must be approved pursuant to the Supermajority Voting Requirement.
Meetings of Stockholders (Bylaws Article II)
Number of Directors (Bylaws Section 3.2)
Election, Qualification and Term of Office of Directors of the Board (Bylaws Section 3.3)
Resignation and Vacancies on the Board (Bylaws Section 3.4)
Removal of Directors (Bylaws Section 3.15)
Indemnity (Bylaws Article VI)
Amendments (Bylaws Article IX)
In addition, Article VI, paragraph D of our Charter provides that removal of any director is subject to, among others, the Supermajority Voting Requirement.
After considering the advantages and disadvantages of the Supermajority Voting Requirement at this time, the Board has approved, and recommends that stockholders approve, amendments to our Charter to remove the Supermajority Voting Requirements contained therein. If the proposed amendments are approved by our stockholders, (i) future amendments to our Charter, including those provisions listed above, will not be subject to the Supermajority Voting Requirement and will instead require the affirmative vote of the holders of a majority of our outstanding common stock as provided under applicable law, and (ii) stockholders will not be subject to the Supermajority Voting Requirement to remove directors.
Mr. Hastings beneficially owned two aircraft which were leased to Netflix by him under time-sharing agreements for Netflix business related travel by Mr. Hastings and other Netflix employees. These agreements were terminated in 2019. Under the terms of the time-sharing agreements, Netflix provided payment to Mr. Hastings for such travel based on the aggregate incremental cost of each specific flight pursuant to applicable FAA regulations. In 2019, Netflix reimbursed Mr. Hastings $508,438 under these time-sharing agreements.
2020 PROXY STATEMENT 25
2022 Proxy Statement | 35 |
The proposed Amended and Restated Certificate of Incorporation is attached to this Proxy Statement as Appendix A, which we would file promptly following the Annual Meeting if our stockholders approve this proposal (subject to revision as described above under “Proposal 2: Declassification of the Board of Directors—Partial Stockholder Approval of Recommended Charter Amendments” if our stockholders approve only some of the Charter amendment proposals recommended by the Board in this Proxy Statement). Contingent upon the effectiveness of the proposed amendment to the Charter eliminating the Supermajority Voting Requirements, certain conforming changes will be made to our bylaws to eliminate all Supermajority Voting Requirements in the bylaws. If this Charter amendment is approved, the Board will adopt the conforming changes to the bylaws (which do not require stockholder approval), with such changes as the Board may approve consistent with the amended Charter.
For the reasons discussed above, the Board believes it is in the best interests of our stockholders at this time to implement this proposal for the elimination of all of the supermajority voting provisions included in the Charter.
Required Vote
The affirmative vote of the holders of 66 2/3 percent (66 2/3%) of the voting power of the shares of voting stock entitled to vote generally in the election of directors, voting together as a single class, is required to approve this proposal pursuant to the Charter.
Netflix Recommendation
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This management proposal seeks to provide to common stockholders owning a specified percentage of the Company’s outstanding stock the right to require the Company to call a special meeting of stockholders, in accordance with, and subject to, the provisions that would be set forth in our governing documents.
As part of our continuous evaluation of corporate governance practices, our Board regularly reviews our governing documents and considers possible changes. Currently, our Charter provides that only the Chairman of the Board, the Chief Executive Officer, the President or the Board may call special meetings of stockholders.
While we believe that our current governance structure has served our stockholders extraordinarily well with a sustained period of substantial growth, our Board, having heard our stockholders’ preferences (including through their engagement with us and their assessment of a past precatory proposal), has decided that it is in the best interests of the Company and our stockholders to permit stockholders holding a sufficiently large economic and voting interest in the Company to require that the Company call a special meeting of its stockholders, subject to specified procedures, provisions and requirements.
The Board recognizes that providing a significant portion of the stockholders of a company the ability to call special meetings is viewed by some stockholders as a useful corporate governance practice. However, the Board also recognizes the need for appropriate parameters given that special meetings of stockholders can be potentially disruptive to business operations and to long-term stockholder interests, can be misused and can cause the Company to incur substantial expenses. Accordingly, the Board believes that the proposed 20% “net-long” threshold for calling special meetings of stockholders, coupled with a 1-year holding period, will help to balance these considerations, ensuring that special meetings can be called by stockholders with a significant and durationally meaningful interest in the Company but are less likely to be disruptive to the Company and its operations and be more likely to address matters that merit the unusual step of convening a meeting in advance of the regularly scheduled annual meeting process.
The Board notes that, according to data it has received surveying the practices of S&P 500 companies, of the approximately 64% of S&P 500 companies that allow stockholders to call special meetings, more than two-thirds have set the threshold at 20% or higher. (FactSet financial data and analytics)
Over the years, we have engaged with many of our stockholders who have indicated support for a stockholder right to call a special meeting. Additionally, following the initial announcement of our move toward an updated governance structure, we heard from a number of stockholders who conveyed their positive reactions to the governance changes, including the provision of shareholder right to call a special meeting.
Accordingly, the Board has approved, and recommends that stockholders approve, amendments to our Charter to provide stockholders holding not less than 20% “net long position” of our outstanding capital stock continuously for at least one year the right to require that the Company call a special meeting of stockholders.
The proposed Amended and Restated Certificate of Incorporation is attached to this Proxy Statement as Appendix A, which we would file promptly following the Annual Meeting if our stockholders approve this proposal (subject to revision as described above under “Proposal 2: Declassification of the Board of Directors—Partial Stockholder Approval of Recommended Charter Amendments” if our stockholders approve only some of the Charter amendment proposals recommended by the Board in this Proxy Statement). Contingent upon the effectiveness of this proposed amendment to the Charter providing stockholders holding not less than 20% “net long position” of our outstanding capital stock continuously for at least one year the right to require that the Company call a special meeting of stockholders, the Board will effect certain changes to our bylaws to provide appropriate procedures for and limitations on the calling of special meetings of stockholders. For example, matters should be proper subjects for shareholder action, with meaningful disclosure being provided to the Company and to stockholders. In addition, the Board believes that stockholder-requested special meetings should not be held in close proximity to annual meetings or when the matters to be addressed have been recently considered or are planned to be considered an upcoming meeting. If this Charter amendment is approved, the Board will adopt changes to the bylaws (which do not require stockholder
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approval) that will include safeguards and requirements for calling special meetings, including the concepts outlined below and otherwise consistent with the rights provided in the amended Charter.
In particular, among other things, our bylaws would be amended:
To define “net long position” in accordance with the definition of “Ownership” set forth in our “proxy access” bylaw provisions;
To specify the procedures for our stockholders of record to demand that the Board fix a record date to determine the stockholders of record who are entitled to deliver a written request to call a special meeting;
To specify the information required to be set forth in a written request to call a special meeting; and
To specify that the Secretary shall not accept, and shall consider ineffective, a stockholder’s written request to call a special meeting (i) that does not comply with the applicable provisions of our Charter or bylaws, (ii) that relates to an item of business that is not a proper subject for stockholder action, (iii) if such written request is delivered between the time beginning on the 61st day after the earliest date of signature on a written request to call a special meeting that has been delivered to the Secretary relating to an identical or substantially similar item other than the election or removal of directors (a “Similar Item”) and ending on the one-year anniversary of such earliest date, (iv) if a Similar Item will be submitted for stockholder approval at any stockholder meeting to be held on or before the 90th day after the Secretary receives such written request, or (v) if a Similar Item has been presented at any meeting of stockholders held within 180 days prior to receipt by the Secretary of such written request.
For the reasons discussed above, the Board believes it is in the best interests of our stockholders at this time to implement the proposal’s request to provide special meeting rights for our common stockholders.
Required Vote
The affirmative vote of the holders of 66 2/3 percent (66 2/3%) of the voting power of the shares of voting stock entitled to vote generally in the election of directors, voting together as a single class, is required to approve this proposal pursuant to the Charter.
Netflix Recommendation
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2022 Proxy Statement | 39 |
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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, 2022. 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 2021 and 2020, fees for services provided by Ernst & Young was as follows (in thousands):
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| 2021 | 2020 | ||||||
Audit Fees | $ | 5,800 | $ | 5,351 | ||||
Audit-Related Fees | 220 | 70 | ||||||
Tax Fees | 1,938 | 2,096 | ||||||
Total | $ | 7,958 | $ | 7,517 | ||||
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,
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 Netflix, Inc. for the year ending December 31, 2020. The Company is 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 Bylaws require that stockholders ratify the selection of Ernst & Young as the Company’s independent registered public accounting firm. However, the Company is 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 its stockholders.
Principal Accountant Fees and Services
During 2019 and 2018, fees for services provided by Ernst & Young was as follows (in thousands):
| 2019 | 2018 | |||||||
Audit Fees | $ | 4,936 | $ | 4,343 | ||||
Tax Fees | 2,927 | 1,858 | ||||||
Total | $ | 7,863 | $ | 6,201 | ||||
Audit Feesinclude amounts related to the audit of the Company’s annual financial statements and internal control over financial reporting, and quarterly review of the financial statements included in the Company’s
Quarterly Reports on Form10-Q. Audit fees also include amounts related to accounting consultations and services rendered in connection with the Company’s issuance of senior notes in 2019 and 2018, 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,us, other than the services described above, in 20192021 and 2018.
2020.
The Audit Committee has determined that the rendering ofnon-audit services by Ernst & Young was compatible with maintaining their independence.
Policy on Audit CommitteePre-Approval of Audit and PermissibleNon-Audit Services of Independent Registered Public Accounting Firm
The Audit Committeepre-approves all audit and permissiblenon-audit services provided by the Company’sour 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 2019,2021, services provided by Ernst & Young werepre-approved by the Audit Committee in accordance with this policy.
2020 PROXY STATEMENT 27
2022 Proxy Statement | 41 |
Required Vote
The affirmative vote of the majority of the 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, 2020.2022. 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, 2020.
| 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, 2022. |
28 NETFLIX
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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 Form10-K for the year ended December 31, 20192021 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 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 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, 20192021 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 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 the annual report on Form10-K for the year ended December 31, 2019,2021, for filing with the Securities and Exchange Commission.
Audit Committee of the Board
Richard N. Barton
Leslie Kilgore
Ann Mather
2020 PROXY STATEMENT 29
Our executive officers are as follows:
2022 Proxy Statement | 43 |
Our executive officers as of April 8, 2022 are as follows:
Executive Officers | Age | Position | ||||
Sergio Ezama | 50 | Chief Talent Officer | ||||
Reed Hastings | ||||||
David Hyman | 56 | Chief Legal Officer and Secretary | ||||
| 43 | Chief | ||||
Spencer Neumann | 52 | Chief Financial Officer | ||||
Greg Peters | Chief Operating Officer and Chief Product Officer | |||||
Ted Sarandos | Co-Chief Executive Officer and Chief Content Officer | |||||
Rachel Whetstone | 54 | Chief Communications Officer | ||||
For more information about Mr.Messrs. Hastings and Sarandos, see “Proposal One – 1: Our Board of Directors—Election of Directors.Directors—Who We Are.” Information about our other executive officers is set forth below:
| Sergio Ezama | CHIEF TALENT OFFICER | ||||
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About: Sergio was named Netflix Chief Talent Officer in September 2021 and 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... Sergio was previously Global Chief Talent Officer at PepsiCo in addition to serving as Chief Human Resources Officer for global functions and groups. In this role, he led the company’s efforts across all talent-related areas in more than 200 countries. Sergio joined PepsiCo in 2001, serving in a variety of talent leadership roles at PepsiCo headquarters in the U.S., and across Europe, Sub-Saharan Africa and Latin America. Sergio holds a BS in Law and master’s in Juridical Practice, and Human Resources Management from University of Deusto. He also holds a master’s in Health and Safety Management from Instituto Europeo de Salud y Bienestar Social. He is a graduate of Harvard Business School’s General Management Program. Career Snapshot: • Chief Talent Officer of Netflix (since 2021) Prior: • Chief Talent Officer PepsiCo and CHRO Global Groups and Functions (2018-2021) • SVP and CHRO, PepsiCo Europe, Latin America and Sub-Saharan Africa, among other positions at PepsiCo, a multinational food, snack, and beverage corporation (2001-2018) | ||||||
2022 Proxy Statement | 45 |
| David Hyman | CHIEF LEGAL OFFICER | |||||
AGE: 56 | |||||||
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) • Director of Shelby Lane Acquisition Corp. (since 2021)
Prior: • General Counsel of Webvan, an online internet retailer
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| Marian Lee | CHIEF MARKETING OFFICER | |||||
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About:
Also... Previously enjoyed an eight-year tenure at Spotify, where she served as Vice President & Co-Head of Music; Vice President, Global Head of Artist & Label Services; and held various other positions leading the Global Consumer Marketing & Artist & Creator Marketing teams.
Marian has also worked at | Career Snapshot: • Chief
Prior: • • Vice President, Global Head of
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2020 PROXY STATEMENT 31
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| CHIEF FINANCIAL OFFICER | |||||
AGE: 52 | |||||||
About: Spencer was named CFO of Netflix in January of 2019, utilizing his finance, strategy, and accounting experience in
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 member of the national board of directors ofMake-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) • Director of Adobe, Inc. (since 2021)
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
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About: As Chief Operating Officer and Chief Product Officer, Greg oversees global operations and leads the product team, which designs, builds and optimizes the Netflix experience including applications and user interfaces.
Also... Greg 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. He holds a degree in physics and astronomy from Yale University. | Career Snapshot: • Chief Operating Officer (since July 2020) and Chief Product Officer of Netflix (since 2017) • Director of DoorDash Inc. (since 2022) • Director of 2U, Inc. (since 2018)
Prior: • International Development Officer of Netflix (2015-2017) • Chief Streaming and 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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32 NETFLIX
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Rachel Whetstone | CHIEF COMMUNICATIONS OFFICER | ||||||
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About: Rachel
Also... Rachel has spent the last | 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.
2020 PROXY STATEMENT 33
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,Named Executive Officers, as disclosed pursuant to the compensation disclosure rules of the SEC (also referred to as“say-on-pay”).
We currently hold our advisorysay-on-pay vote every year. ShareholdersStockholders will have an opportunity to cast an advisory vote on the frequency ofsay-on-pay votes at least every six years. We currently expect that the next advisory vote on the frequency of thesay-on-pay votes will occur at the 2023 annual meeting of shareholders.stockholders.
As described in our Compensation Discussion and Analysis, we have adopted an executive compensation philosophy designed to attract and retain outstanding performers. The Company’sOur 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 officersNamed 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. |
The Board unanimously recommends that the stockholders vote “FOR” approval of our executive officer compensation disclosed in this Proxy Statement.
50 |
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2020 PROXY STATEMENT 35
and Analysis
A Message from the Compensation Committee Chair
We have designedThroughout 2021, our executive officers demonstrated strong leadership in executing our long-term strategy, providing great content for our members, and promoting the Netflix compensation programfinancial strength of our Company for our shareholders, while also continuing to be simple, highly aligned with our shareholders’ interests, and to attract and retainnavigate the most talented employees from around the globe. We understand that our program is different. However, inongoing COVID-19 pandemic. In light of Netflix’s long-term stock performance,the pandemic, the Compensation Committee held executive compensation flat for 2021 given the economic shock and uncertain impact that the pandemic presented.
The Netflix Board, alongside management, continued to actively engage with stockholders throughout 2021. In November, we held a virtual ESG Investor Day with a number of our low voluntary employee turnover rate of 4%, and our three-year average dilution rate of just 0.55%, we believe that “different” is better for our company and our shareholders.
We recognize that with ourSay-on-Pay proposal receiving 49.8% approval last year, many shareholders may not share our perspective. Following our last annual meeting, I and other members Members of the Board metand management participated, including our Co-CEOs, as well as those responsible for sustainability, diversity and inclusion, finance, content, communications and public policy. We engaged with our shareholders to better understand their concernsin an honest and open manner, and were presented with many thoughtful questions about our compensation program. This effort provided an opportunity for us to hear shareholder views, and to explain our rationale behindviewpoints on a variety of topics covering environmental, social and governance matters, as well as the various elementscore business itself. We discussed this feedback with the full Board, where it formed part of the program.
Our shareholder engagement efforts highlighted thatdiscussion around how we could do a better jobcan best serve the long-term interests of explaining our programshareholders, and factored into our decision to investors. Our goal is to do that hereevolve our governance structure, as described elsewhere in this CD&A and achieve an improved understanding of our executiveProxy Statement.
On compensation program, as I believe we accomplished during our direct shareholder discussions.
The key elements of our program and how they align with our compensation philosophy are as follows:
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Personal Choice. We set a dollar-denominated compensation amount for each employee (“allocatable compensation”) who can then choose to allocate any portion of that compensation amount toward 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 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. We believe granting options monthly provides 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 option grants. In addition to the choice outlined above, each salaried employee, including executive officers, is awarded a minimum annual stock option allowance (generally based upon 5% of their total allocatable compensation) so that each employee is invested in the long-term success of the Company and aligned with shareholders regardless of whether they allocate cash compensation to the stock option program.
36 NETFLIX
Objective and Transparent Stock Option Grant Formula. The number of monthly options granted is determined by the following formula:
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For example:
If the stock price is $375 on the date of grant and the recipient allocated $1,500 per month of their allocatable compensation to stock options, the recipient would receive 10 stock options with an exercise price of $375.
| $1500 | = | 1500 | = | 10 options with an exercise price of $375. | ||||
| $375*0.40 | 150 |
The stock price would need to rise to $525 (40% appreciation from $375) for the recipient to earn back the $1,500 of cash they traded for the options:
$525- $375 = $150 x 10 shares = $1,500
Anything below a 40% appreciation in the stock means that the employee would have been better off electing cash. We believe that this structure significantly aligns our employee interest with that of our shareholders.
In 2019, 100% of Named Executive Officers elected to allocate a portion of their cash compensation to this stock option program. Our CEO allocated 97.7% of his cash compensation toward our stock option program and the average election across our Named Executive Officers was 46.5%.
Vested10-year Options. We grant fully vested10-year options, which means that employees have 10 years from the date of grant to exercise their options. We believe a10-year option life is important to encourage participation in the equity portion of our program and reinforce a long-term focus. As the options generally 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 the 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.
The Board and Compensation Committee considered the input from our shareholders, the results of our annual Say-on-Pay vote and our engagement with shareholders, including at our ESG Investor Day, to determine why our Say-on-Pay vote has dipped in recent years. While some shareholders have raised concerns with our program, such as with the overall level of compensation and the ability of executives to choose between cash and stock options (a feature that has been part of the program for well over a decade), other shareholders have strongly supported the program’s design and appreciate its alignment with their interests. Given these divergent perspectives, the Compensation Committee will continue to consider whether changes to the program are appropriate, but for the present it is preserving the program’s general design. We continue to strongly believe that our current compensation program’s design is a significant contributor to Netflix’s success, including our ability to attract and is highly aligned withretain talent and to align executive and shareholder interests. Therefore, we are not making material changes to the executive compensation program for 2020. However,
We appreciate your trust in response to other feedback we have received, we have attempted to better describe our program and have added an anti-hedging and anti-pledging policy. We will continue to explore ways that we can implement changes to the program desired by shareholders while preserving the program’s general design and valuecommitment to Netflix, and our shareholders.
Thankthank you for being a shareholder 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.shareholder.
Tim Haley
Compensation Committee Chairperson
2020 PROXY STATEMENT 37
Our Company and 20192021 Performance
Netflix Inc. is one of the world’s leading subscription streaming entertainment serviceservices with more than 182approximately 222 million paid streaming memberships in over 190 countries enjoying TV series, documentaries and feature films across a wide variety of genres and languages.countries. We launched our streaming service in 2007, and have since added an increasing amountsvariety of content that enableenables consumers to enjoy entertainment directly on their internet-connected screens. Our content is increasingly exclusive and curated and includes our own original programming. In 2021, we added mobile games to our service.
We believe that Netflix remains a growth venture, even though it has been a public company for more than 20 years. Our streaming revenue grew by 29% in 2019, with 23% coming from an increase in average streamingadded 18 million paid memberships in 2021 and 5% coming from Average Revenue Per User (“ARPU”) growth (9% excluding the impact of foreign currency).achieved approximately $30 billion in revenue, representing 19% year-over-year growth. Our profitability also improved, with operating income rising 62% year over year35% year-over-year while operating margins increased from 10%18% to 13%21%. We manage our business for the long term with a focus on shareholderstockholder value creation. Consistent with this approach, Netflix was the best performing S&P 500 stock of the 2010-2019 decade, returning approximately 45% on an annualized basis to our shareholders over this time period (compared with approximately 14% for the S&P 500).
In 2019,2021, we continued to invest heavily in content to great success. As noted in our investor letters, some of our big hits included new seasons ofseries like Stranger Things, Squid Game, Maid and Lupin, and returning shows such as The Witcher, You, La Casa de Papel (aka,(aka Money Heist), andThe CrownSex Education as well as new series likeUmbrella Academy,Unbelievable andThe Witcher, while. We took a big step forward with our original films initiative premieredslate delivering a wide variety of successes such asquality movies, including big hits like The Irishman,Marriage Story,Six UndergroundRed Notice andThe Two PopesDon’t Look Up. We continued to expand our local language 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 117129 Emmys and won 44 - matching the record for most in a single year set by CBS in 1974. We were nominated for an industry-leading 2427 Academy Award nominations within the last year.year and won Best Director. We’re also proud to lead the industry in nominations at both the 20202022 NAACP Image Awards (42(51 nominations), and we received 24
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nominations from the GLAAD MediaBritish Academy of Film and Television Arts (BAFTA) for the 2022 Film Awards, (15 nominations).winning Best Picture, Best Director, and Outstanding Debut by a British Writer, Director or Producer. 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.
ShareholderStockholder Engagement and the 20192021 Say-on-Pay Vote Result
In 2019, 49.8%2021, 50.6% of voted shares approved the compensation of our Named Executive Officers. At the time of the 2019 vote in 2021, the Compensation Committee had already approved the design of our 20192021 executive compensation program. The Compensation Committee reviewed these voting results, and in response, the Company, including members of the Compensation Committee undertook an extensive shareholder engagement campaignand management engaged with stockholders to solicit the feedback of shareholders regarding our compensation program.
WeIn November 2021, we held 22 meetings (either in person or on the phone)an ESG Investor Day and met with investorsstockholders representing approximately 50%40% of our common shares outstanding. Members of the Board,stock outstanding, including shareholders that did not support our 2021 Say-on-Pay vote. Investors heard from our Sustainability Officer, Emma Stewart, Ph.D., on our sustainability efforts, as well as our VP of Inclusion Strategy, Vernā Myers, on our approach to diversity and inclusion. Members of management, including our Co-CEOs, provided an overview of the business, and members of management, participatedour Board engaged in these conversations. We also engageda meaningful and candid discussion with major proxy advisors covering our company.
In our meetings, we discussedinvestors on a wide range of topicsissues, including executive compensation, compensation governance,the Company’s corporate governance ESG issues, corporate strategy, financial and operational performance,structure and executive succession. Throughcompensation. Company representatives also held engagement meetings earlier in 2021, prior to our conversations, we heard that:
Other shareholders question our unique approach to compensation, particularly with respect to ourstock options, use of immediately vested options. After explaining our equity program, including thatoptions without certain vesting criteria and the lack of stock must appreciate 40% from grant before an employee earns from the options the amount that would have been guaranteed to the employee byownership guidelines, among other concerns.
38 NETFLIX
Our Compensation Committee considered shareholderstockholder feedback (including feedback shared with the management team immediately following the 2019 annual meeting) in its deliberations regarding 20202022 compensation and continues to believe our compensation philosophy and structure align with stockholder interests and best incentivize the executive officers to execute on strategies aimed at achieving long-term success. The Compensation Committee will continue to consider feedback in ongoing executive compensation decisions.
This Compensation Discussion and Analysis describes the compensation program for our Named Executive Officers. During 2021, these individuals were:
Reed Hastings, Co-Chief Executive Officer, President, and Chairperson of the Board
Ted Sarandos, Co-Chief Executive Officer and Chief Content Officer
Spencer Neumann, Chief Financial Officer
Greg Peters, Chief Operating Officer and Chief Product Officer
David Hyman, Chief Legal Officer
Rachel Whetstone, Chief Communications Officer
We have had a Co-Chief Executive Officer structure since 2020, when Ted Sarandos was named Co-Chief Executive Officer along with Reed Hastings. This change mostly formalized the prior working relationship between Ted and Reed, who have had a long history of collaboration on corporate strategy, planning and all aspects of company management. We believe the Co-CEO structure provides broad expertise and deep leadership at the highest level of the Company, and provides an efficient and effective leadership model to support our future growth.
2022 Proxy Statement | 53 |
We aim to provide highly competitive compensation packages for all our key positions, including our Named Executive Officers. OurWe operate in a highly dynamic industry where the market for talent is extremely competitive. We rely on our Named Executive Officers to execute on the Company’s strategies and initiatives for long-term success. To attract and retain top talent, we believe we must provide highly competitive compensation packages. As such, our compensation practices are also 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.
The Compensation Committee aims for the compensation program to be simple to understand and administer, to be transparent to both shareholdersstockholders and executives,executive officers, and to create a long-term alignment between our shareholdersstockholders and our executives.executive officers.
The Company’sOur compensation practices are evaluated by the Compensation Committee 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.
2019Compensation Program Overview
Our long-term success depends on our continued ability to innovate and create opportunities for our members to engage. We push forward the boundaries of our industry and do not believe success can be measured by any specific isolated performance metric. A combination of long-term financial, strategic and operational achievements has to occur for our stock price to appreciate meaningfully to deliver value to our executives. The current program design incentivizes the spirit of creativity and innovative achievements that are at the foundation of our long-term success.
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. |
Prior to 2021, we granted eligible employees, including executive officers, a minimum annual stock option allowance (generally based on 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 were eliminated for most employees and the value was added to the employee’s total allocatable compensation.
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 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. This approach is also consistent with our company culture of freedom and responsibility.
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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.
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 $375 on the date of grant and the recipient allocated $1,500 per month of their allocatable compensation to stock options, the recipient would receive 10 stock options with an exercise price of $375.
| $1500 | = | 1500 | = | 10 options with an | ||||
| $375*0.40 | 150 | exercise price of $375. |
The stock price would need to rise to $525 (40% appreciation from $375) for the recipient to earn back the $1,500 of cash they traded for the options:
$525 - $375 = $150 x 10 shares = $1,500
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 2021, each Named Executive Officer elected to allocate a portion of their annual compensation to our stock option program. Reed Hastings, our Co-Chief Executive Officer allocated 98% of his annual compensation toward our stock option program, Ted Sarandos, our Co-Chief Executive Officer allocated 42% of his annual compensation toward our stock option program, and the average election across our Named Executive Officers was 47%.
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.
Dilution, Burn Rate and Equity Overhang
The Compensation Committee, with the assistance of its compensation consultant, Compensia, Inc. (“Compensia”), reviews the Company’s compensation program annually, including the stock option program to ensure that we balance our employee compensation objectives with our stockholders’ interests. The Compensation Committee regularly reviews the proportion of our total shares outstanding used annually for the stock option program (our “burn rate”), the potential voting power dilution to our stockholders (our “equity overhang”), and the average value of the stock options granted to employees, each in relation to the companies in our compensation peer group. The following table provides detailed information regarding our burn rate and equity overhang for 2019, 2020 and 2021.
2022 Proxy Statement | 55 |
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| 2019 | 2020 | 2021 | |||||||||
Gross Burn Rate(1) | 0.59 | % | 0.43 | % | 0.35 | % | ||||||
Net Burn Rate(2) | 0.59 | % | 0.43 | % | 0.35 | % | ||||||
Equity Overhang(3) | 4.75 | % | 4.22 | % | 3.96 | % | ||||||
This Compensation Discussion
| (1) | Gross Burn Rate equals (x) the number of options we granted in each year divided by (y) our weighted average common shares outstanding for that year. |
| (2) | Net Burn Rate equals (x) the number of options we granted minus options canceled in each year divided by (y) our weighted average common shares outstanding for that year. |
| (3) | Equity Overhang equals (x) the total number of our unexercised options outstanding at each year end divided by (y) our total common shares outstanding at each year end. |
Our burn rate was significantly lower than industry thresholds established by certain major proxy advisory firms, and Analysis describeshas historically been well below the median burn rate of our compensation programs for the
Company’s Named Executive Officers. During 2019, these individuals were:
Mr. Wells’s employment with the Company ended on January 18,peer group, including in 2019 and Mr. Bennett’s employment with2020. We have yet to analyze the Company ended on June 30, 2019.2021 burn rate of our peers.
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:
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the individual could otherwise command in the employment marketplace. |
The ChiefRole of executive officers
Each of our Co-Chief Executive Officer,Officers, in consultation with theour Chief Talent Officer, reviews comparative data derived from publicly available market compensation information for each of the other Named Executive Officers. The ChiefCo-Chief Executive OfficerOfficers then makes recommendationsmake a recommendation to the Compensation Committee regarding compensation for eachthe other Named Executive Officer.Officers. The Compensation Committee
2020 PROXY STATEMENT 39
reviews and discusses this information and the informationrecommendation 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.Named Executive Officer.
The ChiefOur Co-Chief Executive Officer’sOfficers’ compensation is determined by the Compensation Committee outside the presence of the ChiefCo-Chief Executive Officer.Officers. The Compensation Committee’s decision regarding compensation for the ChiefCo-Chief Executive OfficerOfficers is based on the philosophy outlineddescribed above. It includes a review of comparative data, including the compensation paid by the Company’scompanies in our compensation peer group companies to their chief executive officers and consideration of the accomplishments of the ChiefCo-Chief Executive OfficerOfficers in developing the business strategy for the Company, the Company’s performance of the Company relative toagainst this strategy, and histhe Co-Chief Executive Officers’ ability to attract and retain senior management. In establishing the Chiefeach Co-Chief Executive Officer’s compensation, the Compensation Committee is also mindful of the results of the stockholder’s Advisory Vote on Executive CompensationSay-on-Pay vote for the prior year.
Compensation for any given year is generally established at the end of the prior year. The 2021 compensation for our Named Executive Officers was determined at the end of 2020.
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Role of the compensation consultant
In determining compensation for 2019,2021, the Compensation Committee retained Compensia, a national compensation consulting firm, providingto advise on executive and director compensation advisorymatters. Compensia provided various services to help the Compensation Committee, assessincluding the competitivenessreview, analysis and update of our compensation peer group; the Chiefreview and analysis of our Named Executive Officer’sOfficer compensation obtain a general understandingagainst competitive market data based on the companies in our compensation peer group; the review and analysis of chief executive compensation practices in the marketplace,our non-employee director compensation; advice on our equity plans and serve as a resource for its deliberations concerning the Chief Executive Officer’s specific compensation. Total fees paid to Compensia were less than $120,000 in each of 2018 and 2019.support on other ad hoc matters.
Peer group and benchmarking
In 2018 and 2019, theThe Compensation Committee workedworks with Compensia in determining an appropriate peer group of companies. Comparedcompanies each year. In changes from 2020, eBay, Intuit and VMWare were removed for size (too small). AT&T, Mastercard, Tesla, Verizon and Visa were added consistent with 2018, there were a number of changes to the peer group for
2019. These changes were made to account for Netflix’s considerablecontinued growth, to better align Netflix with the median revenue and market capitalization of the peer group, to eliminate small and acquired peers, and to continue to prioritize media & entertainment and consumer-facingsoftware & services companies. Twitter, AMC, Workday, ScrippsCBS and Time WarnerViacom were removed from theeach peers in 2019; we retained ViacomCBS (now named Paramount Global) as a peer group, and Charter, Comcast, Intuit, Microsoft, Oracle and VMWare were added.following their merger. The compensation peer group for 20192021 was comprisedcomposed of the following companies:
20192021 Netflix Peer Group
Activision Blizzard, Inc. |
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Adobe, | Oracle Corporation | |
| PayPal Holdings, Inc. | |
Booking Holdings Inc. |
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Charter Communications, Inc. |
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Comcast Corporation |
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Discovery, |
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DISH Network Corporation |
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Electronic Arts Inc. |
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| Visa Inc. | |
| (1) | ViacomCBS changed its name to Paramount Global in February 2022. |
With respect to each of theour Named Executive Officers, in determining compensation, the Compensation Committee considered the Company’sour compensation philosophy as outlineddescribed above, comparative market data and specific factors relative to each Named Executive Officer’s responsibilities and performance. The Company doesWe do not specifically benchmark compensation for itsour Named Executive Officers in terms of picking a particular percentile relative to other individuals with similar titles at peer group companies. The CompanyCompensation 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.
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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, the Companywe also utilizesuse salary and stock options as itsour 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, the Company believeswe believe it is important to provide this opportunity to itsour employees,
2022 Proxy Statement | 57 |
including theour Named Executive Officers. By permitting employees to request a customized combination of salary and stock options, the Company endeavorswe 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 executivesNamed Executive Officers the opportunity to select the proportion of cash and equity compensation they receive each year. While our executivesNamed Executive Officers generally have elected to receive a significant portion of their compensation in equity, the remaining compensation is paid in cash asin the form of salary.
Stock Options
The Company believesWe believe that equity ownership, including stock and stock options, helps align the interest of theour Named Executive Officers with those of the Company’sour 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 the Company’sour common stock increases after the date of grant, thereby directly linking compensation in the form of stock options to Company performance.
OfferingMaking 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, the Company believeswe believe it alleviates to a great extent the arbitrariness of option grant timing and the potential negative employee issues associated with “underwater” options.
Vested stockStock options are vested upon grant and can be exercised for up to ten (10) years following grant regardless of employment status. The Company believesAs discussed above, the stock price needs to appreciate at least 40% before an employee is better off allocating cash to stock options. We believe this serves as de facto vesting criteria and aligns employees’ and stockholders’ interests. We believe that this increase in theten-year life of the options enhances thetheir value of such options for each employee and thereby encourages equity ownership in the Company, which is helpful in aligning employee and shareholderstockholder interests. The Company doesWe 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, the Company believeswe believe that creating and maintaining a high-performance culture and providing highly competitive compensation packages are the critical components for retaining employees, including itsour Named Executive Officers.
Empirically, stock options have proven to be an effective way of creating long-term alignment between executives and shareholders.stockholders. Even though the options are vested upon grant, our executivesNamed Executive Officers often do not exercise their options for an extended period of time. Our CEO, in particular, consistently holds his options until they are near expiration.
Other Components of Compensation
EachIn 2021, each Named Executive Officer, like all of the Company’sour full-time employees, iswas eligible to receive an additional $15,000$16,000 in annual compensation that may be used to defray the cost of health care benefits previously paid by the Company.us. 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, all exemptcertain eligible U.S. employees, including our Named Executive Officers, also have the opportunity to participate in the Company’sour 401(k) matching program which enables them to receive adollar-for-dollar Company match of up to
2020 PROXY STATEMENT 41
3.5% 4% of his or her compensation to the 401(k) fund, subject to limitations under applicable law. Messrs. Neumann, Sarandos, Hyman, Bennett and WellsHyman all participated in this program in 20192021 and therefore the Companywe matched their 401(k) contributions as shown in the compensation tables of this Proxy Statement.
The CompanyWe also maintainsmaintain a group term life insurance policy for all full-time employees, including theour Named Executive Officers. The Company permits
named executive officersWe permit our Named Executive Officers and their family members and guests to use the Company’sour corporate aircraft for personal use and considersconsider amounts related to such travel to be a perquisite. Additionally, named executive officersour Named Executive Officers are permitted to use a
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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“All Other CompensationCompensation” column of the Summary Executive Compensation table.
Table.
Executive Compensation in 20192021
2020 presented unprecedented challenges for Netflix and the world, as we navigated the COVID-19 pandemic. Our Named Executive Officers continued to execute our strategies and deliver strong performance throughout 2020 amidst the continuously evolving and challenging environment. Nonetheless, given the COVID-19 pandemic and its impact on the global economic environment, the Compensation Committee, in consultation with Compensia, determined not to make any changes to executive officers’ allocatable compensation for 2021 as compared to 2020, aside from incorporating the value of each Named Executive Officer’s former minimum stock option allowance. Specifically, the value of the minimum stock option allowance that was eliminated in 2021 (generally equal to 5% of the allocatable compensation) was added to the allocatable compensation for each Named Executive Officer, as it was done for all eligible employees.
Each year, we allow our Named Executive Officers to allocate their compensation between cash and stock options. Each year, our executivesOur Named Executive Officers continue to express their confidence in the Company and our growth strategy by electing to receive a substantialsignificant percentage of their compensation throughat-risk stock option awards. These elections are made prior to the compensation year and are irrevocable. For 2019,2021, the following elections were made by our executive team:Named Executive Officers:
Named Executive Officer | Allocatable Compensation ($) | Amount of Allocatable Compensation Elected to be received as Stock Options (%) | Amount of Allocatable Compensation Elected to be received as Cash Salary (%) | ||||||||||||
Reed Hastings, Co-Chief Executive Officer, President, Chairperson of the Board | 34,650,000 | 98.1 | 1.9 | ||||||||||||
Ted Sarandos, Co-Chief Executive Officer and Chief Content Officer | 34,650,000 | 42.3 | 57.7 | ||||||||||||
Spencer Neumann, Chief Financial Officer | 11,550,000 | 48.1 | 51.9 | ||||||||||||
Greg Peters, Chief Operating Officer and Chief Product Officer | 18,900,000 | 36.5 | 63.5 | ||||||||||||
David Hyman, Chief Legal Officer | 9,450,000 | 50.0 | 50.0 | ||||||||||||
Rachel Whetstone, Chief Communications Officer | 5,250,000 | 9.5 | 90.5 | ||||||||||||
Named Executive Officer | Allocatable Compensation ($) | Amount of Allocatable Compensation Elected to be received as Stock Options (%) | Amount of Allocatable Compensation Elected to be received as Cash Salary (%) | |||||||||
Reed Hastings, Chief Executive Officer, President, | 30,000,000 | 97.7 | 2.3 | |||||||||
Spencer Neumann, Chief Financial Officer | 9,524,000 | 47.5 | 52.5 | |||||||||
Ted Sarandos, Chief Content Officer | 30,000,000 | 40.0 | 60.0 | |||||||||
Greg Peters, Chief Product Officer | 16,000,000 | 37.5 | 62.5 | |||||||||
David Hyman, Chief Legal Officer | 7,000,000 | 50.0 | 50.0 | |||||||||
David Wells, former Chief Financial Officer | 6,000,000 | 41.7 | 58.3 | |||||||||
Kelly Bennett, former Chief Marketing Officer | 7,000,000 | 11.4 | 88.6 | |||||||||
The Company also provides a minimum annual stock option allowance (generally 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 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 is used by the Company 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 the Company’sour Amended and Restated Executive Severance and Retention Incentive Plan (the “Severance Plan”) described below.
.
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The compensation of our Named Executive Officers for 2021 was determined in 2020. In determining compensation for theour Named Executive Officers for 2019,2021, in consultation with Compensia, the Compensation Committee considered the philosophy outlined above. In addition,described above, including comparative market data. As discussed above, due to the following factors were considered for eachCOVID-19 pandemic, while our Named Executive Officer:
Individual employee performance, including that of our Named Executive Officers, is 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.
2020 PROXY STATEMENT 43
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After considering the above, in 2019,
In 2021, the compensation components for theour Named Executive Officers were as follows. Please see the Summary Executive Compensation tableTable provided in this Proxy Statement for a complete description of the compensation of theour Named Executive Officers:
Name and Position | 2021 Total Annual Stock Option Allocation, 1/12 granted monthly ($)(1) | 2021 Annual Cash Salary ($) | ||||||||
Reed Hastings, Co-Chief Executive Officer, President, and Chairperson of the Board | 34,000,000 | 650,000 | ||||||||
Ted Sarandos, Co-Chief Executive Officer and Chief Content Officer | 14,650,000 | 20,000,000 | ||||||||
Spencer Neumann, Chief Financial Officer | 5,550,000 | 6,000,000 | ||||||||
Greg Peters, Chief Operating Officer and Chief Product Officer | 6,900,000 | 12,000,000 | ||||||||
David Hyman, Chief Legal Officer | 4,725,000 | 4,725,000 | ||||||||
Rachel Whetstone, Chief Communications Officer | 500,000 | 4,750,000 | ||||||||
Name and Position | 2019 Annual Cash Salary ($) | 2019 ($)1 | ||||||
Reed Hastings, Chief Executive Officer, President, Chairman of the Board | 700,000 | 30,800,000 | ||||||
Spencer Neumann, Chief Financial Officer | 5,000,000 | 5,000,000 | ||||||
Ted Sarandos, Chief Content Officer | 18,000,000 | 13,500,000 | ||||||
Greg Peters, Chief Product Officer | 10,000,000 | 6,800,000 | ||||||
David Hyman, Chief Legal Officer | 3,500,000 | 3,850,000 | ||||||
David Wells, former Chief Financial Officer | 3,500,000 | 2,800,000 | ||||||
Kelly Bennett, former Chief Marketing Officer | 6,200,000 | 1,150,000 | ||||||
The dollar amounts set forth in this column are different than the amounts in the “Option Awards” column of the Summary |
Further, in connection with their mutually agreed departure from Netflix, Mr. Wells and Mr. Bennett entered into Netflix’s standard form of release agreement which included customary confidentiality and release provisions and each received a lump sum cash payment calculated in accordance with the Severance Plan of $4,500,000 and $5,250,000 respectively. Upon joining the Company, Mr. Neumann received aone-time cash payment of $1,700,000, which served as an inducement for him to join the Company.
Method for determining monthly stock option grants
After the total annual stock option allocation is established, theour Named Executive Officers receive monthly option grants pursuant to the Company’sour monthly stock option grant program, which is applicable to all salariedthe majority of our employees. Under this program, salariedeligible employees, including theour 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 granted monthly fluctuates based on the closing price of our stock on the date of the option grant.
In 2019,2021, the actual number of options granted to theour Named Executive Officers each month was determined by the following formula: (The amount of an employee’s total annual stock option allocation/12) / ([the closing price of our stock on the date of option grant] x 0.40).
For stock option accounting purposes, the dollar values of stock options granted by the Company, as reflected in the Summary Executive Compensation table,Table, below, are different than the dollar values of the total annual stock option allocation in the table above. The difference arises as the stock option allocation in the table above is the amount used to determine the number of options granted, whereas the dollar values of stock option grants in the Summary Executive Compensation tableTable reflects their grant date fair value under the accounting rules.
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Named Executive Officer Compensation for 20202022
Allocatable compensation for theour Named Executive Officers in 20202022 was determined in consultation with
Compensia. For the fiscal year ending December 31, 2020,2022, the compensation components for theour Named Executive Officers serving in 20202022 are being allocated as follows, based on the methods described above:
Name and Position | 2020 Annual Salary ($) | 2020 Annual Stock Option Allocation1 | 2020 Monthly Stock Option Allocation1 | |||||||||
Reed Hastings | 650,000 | 34,000,000 | 2,833,333 | |||||||||
Spencer Neumann | 6,050,000 | 5,500,000 | 458,333 | |||||||||
Ted Sarandos | 20,000,000 | 14,650,000 | 1,220,833 | |||||||||
Greg Peters | 12,000,000 | 6,900,000 | 575,000 | |||||||||
David Hyman | 5,500,000 | 3,950,000 | 329,167 | |||||||||
Name and Position | 2022 Annual Stock Option ($) | 2022 Annual Stock Option Allocation as percentage of Allocatable Compensation (%) | 2022 Annual ($) | 2022 Annual Salary as Percentage of Allocatable Compensation (%) | ||||||||||||||||
Reed Hastings, Co-Chief Executive Officer, President, and Chairperson of the Board | 34,000,000 | 98.1 | 650,000 | 1.9 | ||||||||||||||||
Ted Sarandos, Co-Chief Executive Officer and Chief Content Officer | 20,000,000 | 50.0 | 20,000,000 | 50.0 | ||||||||||||||||
Spencer Neumann, Chief Financial Officer | 7,000,000 | 50.0 | 7,000,000 | 50.0 | ||||||||||||||||
Greg Peters, Chief Operating Officer and Chief Product Officer | 8,000,000 | 33.3 | 16,000,000 | 66.7 | ||||||||||||||||
David Hyman, Chief Legal Officer | 5,000,000 | 45.5 | 6,000,000 | 54.5 | ||||||||||||||||
Rachel Whetstone, Chief Communications Officer | 1,000,000 | 15.4 | 5,500,000 | 84.6 | ||||||||||||||||
Termination-BasedTermination-based Compensation and Change in Control Retention Incentives
TheOur Named Executive Officers are beneficiaries of the Company’sour Severance 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.
TheIn 2021, the severance benefit consistsconsisted of a lump sum cash payment equal to nine (9)12 months of allocatable compensation, or, for newly hired Covered Executives only, a cash payment equal to 2436 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 1524 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)12 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 order to remain competitive in attracting and retaining top talent, the Severance Plan was amended during 2021 to increase the minimum severance benefit under the Severance Plan from 9 months to 12 months of allocatable compensation and to increase the starting severance benefit for newly hired Covered Executives from 24 months to 36 months of allocatable compensation.
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
2020 PROXY STATEMENT 45
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.
We have a single trigger“single trigger” change in control plan for our executives.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
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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 for an executive to receive severance, create a misaligned incentive for executives to attempt to be terminated from the Company in the event of a change in control. We would rather encourage our executives to continue to focus on the long-term success of the 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 Severance Plan are consistent with similar benefits offered to executive officers of similarly situated companies and moreover, the Severance Plan is an important mechanism for attracting and retaining outstanding performers. Each of the terms “allocatable compensation,” “cause” and “change in control” are defined in the Severance Plan, a copy of which is attached as Exhibit 10.1410.1 to the Company’s Form10-Q8-K filed on July 19, 2017.September 10, 2021.
Section 162(m) of the Internal Revenue Code (“Section 162(m)”) was among the provisions that were amended pursuant to
The Tax Cuts and Jobs Act (the “Tax Act”), which was signed into law on December 22, 2017. The prior version of Section 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 Tax Act amended Section 162(m) to eliminate the exception 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 paid to any officer covered by Section 162(m) will beis $1 million per officer, subject to a transition rule that is described below.
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. The CompanyWe continued to grant stock options in 2019,2021, 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. On December 30, 2020, the Internal Revenue Service published final Section 162(m) 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. However, the Compensation Committee reserves the right to pay compensation that is not tax deductible.
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The Company’sOur 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 the Company’sour equity securities, provided that it does not limit director and officer participation in the Company’sour 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.
The Company’s compensation policies fornon-executive salaried employees are the same as
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those outlined for its Named Executive Officers. Given the design
Clawback of our compensation structure, as detailed in the foregoing Compensation Discussion and Analysis,Performance-Based Awards
While we do not believe that our compensation policies and practices are reasonably likely to have a material adverse effect on the Company.
Moreover, as described in Proposal Four, if the Company’s proposed Netflix, Inc. 2020 Stock Plan is adopted by shareholders,currently use performance-based awards, the Netflix, Inc. 2020 Stock Plan will allowallows us to recover certain performance-based equity awards or amounts paid in respect of such awards in the event 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.
Our compensation policies for non-executive salaried employees are the same as those outlined for our Named Executive Officers. 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.
The Company hasWe have adopted a Code of Ethics for itsour directors, officers and other employees. A copy of the Code of Ethics is available on the Company’sour Investor Relations website athttp:https://www.netflixinvestor.com/ir.netflix.net/governance/governance-docsgovernance-docs/default.aspx. Any changes or waivers of the Code of Ethics will be posted at that website.
2020 PROXY STATEMENT 47
2022 Proxy Statement | 63 |
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, 2019.2021.
Compensation Committee of the Board
Rodolphe Belmer
Mathias Döpfner
Timothy M. Haley
Jay C. Hoag
Anne Sweeney
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Summary Compensation of ExecutiveTable
Officers and Other Matters
Summary Executive Compensation
The following Summary Executive Compensation tableTable sets forth information concerning the compensation paid by the Company to: (i) the Chiefto our Named Executive Officers in 2021, 2020, and 2019, other than 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 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 ($) | Bonus ($) | Option Awards ($)(1) | All Other Compensation ($)(2) | Total ($) | ||||||||||||||||
REED HASTINGS Co-Chief Executive Officer, President, and | 2021 | 650,000 | 39,731,118 | 442,607 | (3) | 40,823,725 | ||||||||||||||||
| 2020 | 650,000 | 42,428,878 | 147,146 | (3) | 43,226,024 | |||||||||||||||||
| 2019 | 700,000 | 37,411,492 | 465,637 | (3) | 38,577,129 | |||||||||||||||||
TED SARANDOS Co-Chief Executive Officer and Chief Content Officer | 2021 | 20,000,000 | 17,119,501 | 1,112,663 | (4) | 38,232,164 | ||||||||||||||||
| 2020 | 20,000,000 | 18,304,124 | 1,014,127 | (5) | 39,318,251 | |||||||||||||||||
| 2019 | 18,000,000 | 16,575,902 | 98,497 | (6) | 34,674,399 | |||||||||||||||||
SPENCER NEUMANN Chief Financial Officer | 2021 | 6,000,000 | 6,480,431 | 30,265 | (7) | 12,510,696 | ||||||||||||||||
| 2020 | 6,050,000 | 6,865,017 | 24,134 | (8) | 12,939,151 | |||||||||||||||||
| 2019 | 4,981,693 | (9) | 1,700,000 | (10) | 5,272,020 | 29,008 | (11) | 11,982,721 | ||||||||||||||
GREG PETERS Chief Operating Officer and Chief Product Officer | 2021 | 12,000,000 | 8,063,284 | 308,109 | (12) | 20,371,393 | ||||||||||||||||
| 2020 | 12,000,000 | 8,664,337 | 141,658 | (13) | 20,805,995 | |||||||||||||||||
| 2019 | 10,000,000 | 8,287,734 | 340,976 | (14) | 18,628,710 | |||||||||||||||||
DAVID HYMAN Chief Legal Officer | 2021 | 4,725,000 | 5,440,831 | 11,742 | (15) | 10,177,573 | ||||||||||||||||
| 2020 | 5,500,000 | 4,956,023 | 13,324 | (16) | 10,469,347 | |||||||||||||||||
| 2019 | 3,500,000 | 4,643,129 | 15,550 | (17) | 8,158,679 | |||||||||||||||||
RACHEL WHETSTONE Chief Communications Officer | 2021 | 4,750,000 | 579,116 | 302 | (18) | 5,329,418 | ||||||||||||||||
| 2020 | 4,800,000 | 555,929 | 170 | (18) | 5,356,099 | |||||||||||||||||
Name and Principal Position | Year | Salary ($) | Bonus ($) | Option Awards ($)1 | Non-Equity Incentive Plan Compensation ($)2 | All Other Compensation ($) | Total ($) | |||||||||||||||||||||
Reed Hastings
Chief Executive Officer, President, Chairman of the Board | 2019 | 700,000 | 37,411,492 | — | 465,637 | 5 | 38,577,129 | |||||||||||||||||||||
| 2018 | 700,000 | 35,380,417 | — | — | 36,080,417 | |||||||||||||||||||||||
| 2017 | 850,000 | 23,527,499 | — | — | 24,377,499 | |||||||||||||||||||||||
Spencer Neumann
Chief Financial Officer | 2019 | 4,981,693 | 3 | 1,700,000 | 4 | 5,272,020 | | — | | 29,008 | 6 | 11,982,721 | ||||||||||||||||
Ted Sarandos
Chief Content Officer | 2019 | 18,000,000 | 16,575,902 | — | 98,497 | 7 | 34,674,399 | |||||||||||||||||||||
| 2018 | 12,000,000 | 17,615,220 | — | 32,251 | 8 | 29,647,471 | ||||||||||||||||||||||
| 2017 | 1,000,000 | 12,389,532 | 9,045,000 | 8,100 | 9 | 22,442,632 | ||||||||||||||||||||||
Greg Peters
Chief Product Officer | 2019 | 10,000,000 | 8,287,734 | — | 340,976 | 10 | 18,628,710 | |||||||||||||||||||||
| 2018 | 6,000,000 | 7,985,902 | — | 832,687 | 11 | 14,818,589 | ||||||||||||||||||||||
| 2017 | 1,000,000 | 3,725,022 | 2,763,750 | 1,748,718 | 12 | 9,237,490 | ||||||||||||||||||||||
David Hyman13
Chief Legal Officer | 2019 | 3,500,000 | 4,643,129 | — | 15,550 | 14 | 8,158,679 | |||||||||||||||||||||
| 2018 | 2,500,000 | 3,914,510 | — | 11,890 | 15 | 6,426,400 | ||||||||||||||||||||||
| 2017 | 1,761,538 | 1,435,074 | 1,608,000 | 309,027 | 16 | 5,113,639 | ||||||||||||||||||||||
Kelly Bennett17
Former Chief Marketing Officer | 2019 | 3,234,615 | 18 | 702,806 | — | 5,287,099 | 19 | 9,224,520 | ||||||||||||||||||||
| 2018 | 5,284,616 | 1,124,402 | — | 47,550 | 20 | 6,456,568 | ||||||||||||||||||||||
David Wells
Former Chief Financial Officer | 2019 | 365,385 | 21 | 260,975 | — | 4,506,222 | 22 | 5,132,582 | ||||||||||||||||||||
| 2018 | 2,800,000 | 3,030,461 | — | 8,250 | 23 | 5,838,711 | ||||||||||||||||||||||
| 2017 | 2,500,000 | 2,127,673 | — | 553,641 | 24 | 5,181,314 | ||||||||||||||||||||||
| (1) | Dollar amounts in the Option Awards column reflect the grant date fair value with respect to stock options during the respective fiscal |
2020 PROXY STATEMENT 49
| because the stock option allocation amounts in such section are reflective of the total compensation amount attributable to stock option grants, rather than the accounting valuation. For a discussion of the assumptions made in the valuation reflected in the Option Awards column, refer to Note |
We 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 |
Includes $442,607, $147,146 and $465,637 for personal use of company |
Includes |
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. |
| (6) | Includes $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. |
Includes |
Includes |
Amount reflects the prorated payment of Mr. Neumann’s salary based on his employment start date of January 7, 2019. |
| (10) | 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. |
| (11) | Includes $6,731 representing our matching contribution made under our 401(k) plan and $22,277 for car services. |
| (12) | Includes $308,109 for personal use of company aircraft. |
| (13) | Includes $140,394 for personal use of company aircraft and $1,264 for commuting expenses. |
| (14) | Includes $340,471 for personal use of company aircraft and $505 for commuting expenses. |
Includes |
Includes |
Includes $9,800 representing our matching contribution made under our 401(k) plan, $1,481 reimbursed by the Company for tax preparation, $4,118 for commuting expenses and $151 for car services. |
Includes |
66 |
|
50 NETFLIX
The following table sets forth information concerning grants of awards made to the Named Executive Officers during 2019.2021. As described above in “Compensation Discussion and Analysis,” the Company grantswe grant eligible employees, including the Named Executive Officers, fully vested stock options on a monthly basis. These stock options can generally be exercised up to 10 years following the date of grant, regardless of employment status. These are the only equity awards made to the Named Executive Officers. The material terms of these stock option grants, including the formula for determining the number of stock options to be granted, are set forth above in “Compensation Discussion and Analysis.”
Name | Grant Date | All Other Option Securities Underlying Options | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of | ||||||
Reed Hastings | 1/4/2021 | 13,547 | 522.86 | 3,531,765 | ||||||
| 2/1/2021 | 13,141 | 539.04 | 3,531,934 | |||||||
| 3/1/2021 | 12,864 | 550.64 | 3,531,890 | |||||||
| 4/1/2021 | 13,131 | 539.42 | 3,311,892 | |||||||
| 5/3/2021 | 13,913 | 509.11 | 3,311,949 | |||||||
| 6/1/2021 | 14,193 | 499.08 | 3,312,040 | |||||||
| 7/1/2021 | 13,276 | 533.54 | 3,139,985 | |||||||
| 8/2/2021 | 13,750 | 515.15 | 3,140,001 | |||||||
| 9/1/2021 | 12,169 | 582.07 | 3,139,955 | |||||||
| 10/1/2021 | 11,553 | 613.15 | 3,260,099 | |||||||
| 11/1/2021 | 10,398 | 681.17 | 3,259,678 | |||||||
| 12/1/2021 | 11,466 | 617.77 | 3,259,929 | |||||||
Ted Sarandos | 1/4/2021 | 5,837 | 522.86 | 1,521,733 | ||||||
| 2/1/2021 | 5,662 | 539.04 | 1,521,788 | |||||||
| 3/1/2021 | 5,543 | 550.64 | 1,521,864 | |||||||
| 4/1/2021 | 5,658 | 539.42 | 1,427,057 | |||||||
| 5/3/2021 | 5,995 | 509.11 | 1,427,092 | |||||||
| 6/1/2021 | 6,116 | 499.08 | 1,427,213 | |||||||
| 7/1/2021 | 5,720 | 533.54 | 1,352,871 | |||||||
| 8/2/2021 | 5,925 | 515.15 | 1,353,055 | |||||||
| 9/1/2021 | 5,243 | 582.07 | 1,352,846 | |||||||
| 10/1/2021 | 4,978 | 613.15 | 1,404,724 | |||||||
| 11/1/2021 | 4,481 | 681.17 | 1,404,753 | |||||||
| 12/1/2021 | 4,940 | 617.77 | 1,404,505 | |||||||
Name | Grant Date | All Other (#) | Exercise ($/Sh) | Grant Date ($) | ||||||||||||
Reed Hastings | 1/2/2019 | 22,338 | 267.66 | 3,056,980 | ||||||||||||
Reed Hastings | 2/1/2019 | 18,881 | 339.85 | 3,280,781 | ||||||||||||
Reed Hastings | 3/1/2019 | 17,958 | 357.32 | 3,280,804 | ||||||||||||
Reed Hastings | 4/1/2019 | 17,486 | 366.96 | 3,185,022 | ||||||||||||
Reed Hastings | 5/1/2019 | 16,939 | 378.81 | 3,185,022 | ||||||||||||
Reed Hastings | 6/3/2019 | 19,061 | 336.63 | 3,184,943 | ||||||||||||
Reed Hastings | 7/1/2019 | 17,130 | 374.60 | 3,056,095 | ||||||||||||
Reed Hastings | 8/1/2019 | 20,083 | 319.50 | 3,055,914 | ||||||||||||
Reed Hastings | 9/3/2019 | 22,181 | 289.29 | 3,056,021 | ||||||||||||
Reed Hastings | 10/1/2019 | 23,802 | 269.58 | 3,023,273 | ||||||||||||
Reed Hastings | 11/1/2019 | 22,373 | 286.81 | 3,023,393 | ||||||||||||
Reed Hastings | 12/2/2019 | 20,699 | 309.99 | 3,023,244 | ||||||||||||
Spencer Neumann | 2/1/2019 | 1,308 | 339.85 | 227,279 | ||||||||||||
Spencer Neumann | 3/1/2019 | 2,916 | 357.32 | 532,733 | ||||||||||||
Spencer Neumann | 4/1/2019 | 2,838 | 366.96 | 516,933 | ||||||||||||
Spencer Neumann | 5/1/2019 | 2,750 | 378.81 | 517,079 | ||||||||||||
Spencer Neumann | 6/3/2019 | 3,095 | 336.63 | 517,150 | ||||||||||||
Spencer Neumann | 7/1/2019 | 2,781 | 374.60 | 496,147 | ||||||||||||
Spencer Neumann | 8/1/2019 | 3,260 | 319.50 | 496,055 | ||||||||||||
Spencer Neumann | 9/3/2019 | 3,601 | 289.29 | 496,133 | ||||||||||||
2020 PROXY STATEMENT 51
2022 Proxy Statement | 67 |
Name | Grant Date | All Other (#) | Exercise ($/Sh) | Grant Date ($) | ||||||||||||
Spencer Neumann | 10/1/2019 | 3,864 | 269.58 | 490,796 | ||||||||||||
Spencer Neumann | 11/1/2019 | 3,632 | 286.81 | 490,813 | ||||||||||||
Spencer Neumann | 12/2/2019 | 3,361 | 309.99 | 490,899 | ||||||||||||
Ted Sarandos | 1/2/2019 | 11,091 | 267.66 | 1,517,816 | ||||||||||||
Ted Sarandos | 2/1/2019 | 8,276 | 339.85 | 1,438,046 | ||||||||||||
Ted Sarandos | 3/1/2019 | 7,871 | 357.32 | 1,437,978 | ||||||||||||
Ted Sarandos | 4/1/2019 | 7,664 | 366.96 | 1,395,975 | ||||||||||||
Ted Sarandos | 5/1/2019 | 7,425 | 378.81 | 1,396,115 | ||||||||||||
Ted Sarandos | 6/3/2019 | 8,355 | 336.63 | 1,396,055 | ||||||||||||
Ted Sarandos | 7/1/2019 | 7,508 | 374.60 | 1,339,472 | ||||||||||||
Ted Sarandos | 8/1/2019 | 8,802 | 319.50 | 1,339,349 | ||||||||||||
Ted Sarandos | 9/3/2019 | 9,723 | 289.29 | 1,339,601 | ||||||||||||
Ted Sarandos | 10/1/2019 | 10,433 | 269.58 | 1,325,175 | ||||||||||||
Ted Sarandos | 11/1/2019 | 9,806 | 286.81 | 1,325,142 | ||||||||||||
Ted Sarandos | 12/2/2019 | 9,073 | 309.99 | 1,325,180 | ||||||||||||
Greg Peters | 1/2/2019 | 5,137 | 267.66 | 703,004 | ||||||||||||
Greg Peters | 2/1/2019 | 4,168 | 339.85 | 724,236 | ||||||||||||
Greg Peters | 3/1/2019 | 3,965 | 357.32 | 724,379 | ||||||||||||
Greg Peters | 4/1/2019 | 3,861 | 366.96 | 703,270 | ||||||||||||
Greg Peters | 5/1/2019 | 3,739 | 378.81 | 703,040 | ||||||||||||
Greg Peters | 6/3/2019 | 4,209 | 336.63 | 703,291 | ||||||||||||
Greg Peters | 7/1/2019 | 3,782 | 374.60 | 674,731 | ||||||||||||
Greg Peters | 8/1/2019 | 4,434 | 319.50 | 674,696 | ||||||||||||
Greg Peters | 9/3/2019 | 4,897 | 289.29 | 674,692 | ||||||||||||
Greg Peters | 10/1/2019 | 5,255 | 269.58 | 667,477 | ||||||||||||
Greg Peters | 11/1/2019 | 4,939 | 286.81 | 667,436 | ||||||||||||
Greg Peters | 12/2/2019 | 4,570 | 309.99 | 667,483 | ||||||||||||
David Hyman | 1/2/2019 | 2,549 | 267.66 | 348,833 | ||||||||||||
Name | Grant Date | All Other Option Securities Underlying Options | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of | ||||||
Spencer Neumann | 1/4/2021 | 2,192 | 522.86 | 571,464 | ||||||
| 2/1/2021 | 2,145 | 539.04 | 576,516 | |||||||
| 3/1/2021 | 2,100 | 550.64 | 576,568 | |||||||
| 4/1/2021 | 2,143 | 539.42 | 540,506 | |||||||
| 5/3/2021 | 2,271 | 509.11 | 540,605 | |||||||
| 6/1/2021 | 2,317 | 499.08 | 540,689 | |||||||
| 7/1/2021 | 2,167 | 533.54 | 512,530 | |||||||
| 8/2/2021 | 2,245 | 515.15 | 512,677 | |||||||
| 9/1/2021 | 1,986 | 582.07 | 512,446 | |||||||
| 10/1/2021 | 1,886 | 613.15 | 532,204 | |||||||
| 11/1/2021 | 1,697 | 681.17 | 531,994 | |||||||
| 12/1/2021 | 1,872 | 617.77 | 532,233 | |||||||
Greg Peters | 1/4/2021 | 2,750 | 522.86 | 716,938 | ||||||
| 2/1/2021 | 2,666 | 539.04 | 716,546 | |||||||
| 3/1/2021 | 2,611 | 550.64 | 716,866 | |||||||
| 4/1/2021 | 2,665 | 539.42 | 672,164 | |||||||
| 5/3/2021 | 2,823 | 509.11 | 672,007 | |||||||
| 6/1/2021 | 2,881 | 499.08 | 672,302 | |||||||
| 7/1/2021 | 2,694 | 533.54 | 637,174 | |||||||
| 8/2/2021 | 2,790 | 515.15 | 637,135 | |||||||
| 9/1/2021 | 2,470 | 582.07 | 637,332 | |||||||
| 10/1/2021 | 2,344 | 613.15 | 661,445 | |||||||
| 11/1/2021 | 2,111 | 681.17 | 661,779 | |||||||
| 12/1/2021 | 2,327 | 617.77 | 661,596 | |||||||
David Hyman | 1/4/2021 | 1,573 | 522.86 | 410,088 | ||||||
| 2/1/2021 | 1,827 | 539.04 | 491,047 | |||||||
| 3/1/2021 | 1,787 | 550.64 | 490,632 | |||||||
| 4/1/2021 | 1,825 | 539.42 | 460,300 | |||||||
| 5/3/2021 | 1,934 | 509.11 | 460,383 | |||||||
| 6/1/2021 | 1,972 | 499.08 | 460,181 | |||||||
| 7/1/2021 | 1,845 | 533.54 | 436,372 | |||||||
| 8/2/2021 | 1,911 | 515.15 | 436,403 | |||||||
| 9/1/2021 | 1,691 | 582.07 | 436,327 | |||||||
| 10/1/2021 | 1,605 | 613.15 | 452,909 | |||||||
| 11/1/2021 | 1,445 | 681.17 | 452,994 | |||||||
| 12/1/2021 | 1,594 | 617.77 | 453,194 | |||||||
52 NETFLIX
68 |
|
Name | Grant Date | All Other (#) | Exercise ($/Sh) | Grant Date ($) | ||||||||||||
David Hyman | 2/1/2019 | 2,360 | 339.85 | 410,076 | ||||||||||||
David Hyman | 3/1/2019 | 2,245 | 357.32 | 410,146 | ||||||||||||
David Hyman | 4/1/2019 | 2,186 | 366.96 | 398,173 | ||||||||||||
David Hyman | 5/1/2019 | 2,117 | 378.81 | 398,057 | ||||||||||||
David Hyman | 6/3/2019 | 2,383 | 336.63 | 398,180 | ||||||||||||
David Hyman | 7/1/2019 | 2,141 | 374.60 | 381,967 | ||||||||||||
David Hyman | 8/1/2019 | 2,511 | 319.50 | 382,084 | ||||||||||||
David Hyman | 9/3/2019 | 2,772 | 289.29 | 381,916 | ||||||||||||
David Hyman | 10/1/2019 | 2,976 | 269.58 | 378,004 | ||||||||||||
David Hyman | 11/1/2019 | 2,796 | 286.81 | 377,840 | ||||||||||||
David Hyman | 12/2/2019 | 2,587 | 309.99 | 377,851 | ||||||||||||
Kelly Bennett | 1/2/2019 | 739 | 267.66 | 101,133 | ||||||||||||
Kelly Bennett | 2/1/2019 | 705 | 339.85 | 122,502 | ||||||||||||
Kelly Bennett | 3/1/2019 | 670 | 357.32 | 122,404 | ||||||||||||
Kelly Bennett | 4/1/2019 | 653 | 366.96 | 118,942 | ||||||||||||
Kelly Bennett | 5/1/2019 | 633 | 378.81 | 119,022 | ||||||||||||
Kelly Bennett | 6/3/2019 | 711 | 336.63 | 118,802 | ||||||||||||
David Wells | 1/2/2019 | 1,907 | 267.66 | 260,975 | ||||||||||||
Name | Grant Date | All Other Option Securities Underlying Options | Exercise or Base Price of Option Awards ($/Sh) | Grant Date Fair Value of | ||||||
Rachel Whetstone | 1/4/2021 | 179 | 522.86 | 46,666 | ||||||
| 2/1/2021 | 193 | 539.04 | 51,873 | |||||||
| 3/1/2021 | 189 | 550.64 | 51,891 | |||||||
| 4/1/2021 | 194 | 539.42 | 48,931 | |||||||
| 5/3/2021 | 204 | 509.11 | 48,562 | |||||||
| 6/1/2021 | 209 | 499.08 | 48,772 | |||||||
| 7/1/2021 | 195 | 533.54 | 46,121 | |||||||
| 8/2/2021 | 202 | 515.15 | 46,129 | |||||||
| 9/1/2021 | 179 | 582.07 | 46,187 | |||||||
| 10/1/2021 | 170 | 613.15 | 47,972 | |||||||
| 11/1/2021 | 153 | 681.17 | 47,964 | |||||||
| 12/1/2021 | 169 | 617.77 | 48,049 | |||||||
2020 PROXY STATEMENT 53
Outstanding Equity Awards at FiscalYear-End
The following table sets forth information concerning equity awards for each Named Executive Officer that remained outstanding as of December 31, 2019.2021. All stock options are fully 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 ($) | Option Expiration Date | |||
Reed Hastings | 26,278 | 31.71 | 06/03/2023 | |||
| 26,012 | 32.04 | 07/01/2023 | ||||
| 23,415 | 35.59 | 08/01/2023 | ||||
| 20,188 | 41.29 | 09/03/2023 | ||||
| 17,969 | 46.37 | 10/01/2023 | ||||
| 17,717 | 47.04 | 11/01/2023 | ||||
| 16,030 | 51.99 | 12/02/2023 | ||||
| 16,079 | 51.83 | 01/02/2024 | ||||
| 21,637 | 57.77 | 02/03/2024 | ||||
| 19,635 | 63.66 | 03/03/2024 | ||||
| 23,996 | 52.10 | 04/01/2024 | ||||
| 25,998 | 48.07 | 05/01/2024 | ||||
| 20,734 | 60.29 | 06/02/2024 | ||||
| 18,494 | 67.59 | 07/01/2024 | ||||
| 20,566 | 60.77 | 08/01/2024 | ||||
| 18,361 | 68.09 | 09/02/2024 | ||||
| 19,943 | 62.69 | 10/01/2024 | ||||
| Option Awards | ||||||||||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||||||||
Reed Hastings | 83,692 | 9.96 | 3/1/2020 | |||||||||
Reed Hastings | 77,777 | 10.71 | 4/1/2020 | |||||||||
Reed Hastings | 57,197 | 14.57 | 5/3/2020 | |||||||||
Reed Hastings | 54,369 | 15.33 | 6/1/2020 | |||||||||
Reed Hastings | 53,193 | 15.67 | 7/1/2020 | |||||||||
Reed Hastings | 57,260 | 14.55 | 8/2/2020 | |||||||||
Reed Hastings | 43,239 | 19.27 | 9/1/2020 | |||||||||
Reed Hastings | 37,716 | 22.09 | 10/1/2020 | |||||||||
Reed Hastings | 34,853 | 23.91 | 11/1/2020 | |||||||||
Reed Hastings | 29,148 | 28.59 | 12/1/2020 | |||||||||
Reed Hastings | 32,697 | 25.49 | 1/3/2021 | |||||||||
Reed Hastings | 41,097 | 30.41 | 2/1/2021 | |||||||||
Reed Hastings | 42,763 | 29.23 | 3/1/2021 | |||||||||
Reed Hastings | 36,141 | 34.58 | 4/1/2021 | |||||||||
Reed Hastings | 36,890 | 33.88 | 5/2/2021 | |||||||||
Reed Hastings | 32,739 | 38.18 | 6/1/2021 | |||||||||
Reed Hastings | 32,648 | 38.28 | 7/1/2021 | |||||||||
Reed Hastings | 33,222 | 37.63 | 8/1/2021 | |||||||||
Reed Hastings | 37,513 | 33.32 | 9/1/2021 | |||||||||
Reed Hastings | 77,266 | 16.18 | 10/3/2021 | |||||||||
Reed Hastings | 109,249 | 11.44 | 11/1/2021 | |||||||||
Reed Hastings | 130,263 | 9.60 | 12/1/2021 | |||||||||
54 NETFLIX
2022 Proxy Statement | 69 |
| Option Awards | ||||||||||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||||||||
Reed Hastings | 121,121 | 10.32 | 1/3/2022 | |||||||||
Reed Hastings | 35,581 | 17.57 | 2/1/2022 | |||||||||
Reed Hastings | 38,801 | 16.11 | 3/1/2022 | |||||||||
Reed Hastings | 38,388 | 16.28 | 4/2/2022 | |||||||||
Reed Hastings | 53,774 | 11.62 | 5/1/2022 | |||||||||
Reed Hastings | 69,503 | 8.99 | 6/1/2022 | |||||||||
Reed Hastings | 64,477 | 9.69 | 7/2/2022 | |||||||||
Reed Hastings | 80,276 | 7.79 | 8/1/2022 | |||||||||
Reed Hastings | 78,225 | 7.99 | 9/4/2022 | |||||||||
Reed Hastings | 78,057 | 8.01 | 10/1/2022 | |||||||||
Reed Hastings | 56,315 | 11.10 | 11/1/2022 | |||||||||
Reed Hastings | 57,561 | 10.86 | 12/3/2022 | |||||||||
Reed Hastings | 47,551 | 13.14 | 1/2/2023 | |||||||||
Reed Hastings | 35,399 | 23.54 | 2/1/2023 | |||||||||
Reed Hastings | 30,807 | 27.05 | 3/1/2023 | |||||||||
Reed Hastings | 31,976 | 26.06 | 4/1/2023 | |||||||||
Reed Hastings | 27,398 | 30.42 | 5/1/2023 | |||||||||
Reed Hastings | 26,278 | 31.71 | 6/3/2023 | |||||||||
Reed Hastings | 26,012 | 32.04 | 7/1/2023 | |||||||||
Reed Hastings | 23,415 | 35.59 | 8/1/2023 | |||||||||
Reed Hastings | 20,188 | 41.29 | 9/3/2023 | |||||||||
Reed Hastings | 17,969 | 46.37 | 10/1/2023 | |||||||||
Reed Hastings | 17,717 | 47.04 | 11/1/2023 | |||||||||
Reed Hastings | 16,030 | 51.99 | 12/2/2023 | |||||||||
Reed Hastings | 16,079 | 51.83 | 1/2/2024 | |||||||||
Reed Hastings | 21,637 | 57.77 | 2/3/2024 | |||||||||
Reed Hastings | 19,635 | 63.66 | 3/3/2024 | |||||||||
Reed Hastings | 23,996 | 52.10 | 4/1/2024 | |||||||||
|
| Option Awards
| |||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||
Reed Hastings (continued) | 22,526 | 55.49 | 11/03/2024 | |||
| 25,599 | 48.83 | 12/01/2024 | ||||
| 25,074 | 49.85 | 01/02/2025 | ||||
| 45,290 | 63.01 | 02/02/2025 | ||||
| 41,601 | 68.61 | 03/02/2025 | ||||
| 48,363 | 59.02 | 04/01/2025 | ||||
| 35,868 | 79.58 | 05/01/2025 | ||||
| 32,067 | 89.00 | 06/01/2025 | ||||
| 30,485 | 93.64 | 07/01/2025 | ||||
| 25,360 | 112.56 | 08/03/2025 | ||||
| 26,977 | 105.79 | 09/01/2025 | ||||
| 26,933 | 105.98 | 10/01/2025 | ||||
| 26,513 | 107.64 | 11/02/2025 | ||||
| 22,765 | 125.37 | 12/01/2025 | ||||
| 25,959 | 109.96 | 01/04/2026 | ||||
| 42,176 | 94.09 | 02/01/2026 | ||||
| 40,374 | 98.30 | 03/01/2026 | ||||
| 37,547 | 105.70 | 04/01/2026 | ||||
| 42,629 | 93.11 | 05/02/2026 | ||||
| 39,097 | 101.51 | 06/01/2026 | ||||
| 41,055 | 96.67 | 07/01/2026 | ||||
| 42,055 | 94.37 | 08/01/2026 | ||||
| 40,755 | 97.38 | 09/01/2026 | ||||
| 38,670 | 102.63 | 10/03/2026 | ||||
| 32,188 | 123.30 | 11/01/2026 | ||||
| 33,857 | 117.22 | 12/01/2026 | ||||
| 31,130 | 127.49 | 01/03/2027 | ||||
| 31,373 | 140.78 | 02/01/2027 | ||||
| 30,961 | 142.65 | 03/01/2027 | ||||
| 30,062 | 146.92 | 04/03/2027 | ||||
| 28,431 | 155.35 | 05/01/2027 | ||||
| 27,097 | 162.99 | 06/01/2027 | ||||
| 30,216 | 146.17 | 07/03/2027 | ||||
| 24,264 | 182.03 | 08/01/2027 | ||||
| 25,275 | 174.74 | 09/01/2027 | ||||
| 24,952 | 177.01 | 10/02/2027 | ||||
| 22,306 | 198.00 | 11/01/2027 | ||||
| 23,641 | 186.82 | 12/01/2027 | ||||
2020 PROXY STATEMENT 55
70 |
|
|
| Option Awards
| |||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||
Reed Hastings (continued) | 21,966 | 201.07 | 01/02/2028 | |||
| 22,557 | 265.07 | 02/01/2028 | ||||
| 20,590 | 290.39 | 03/01/2028 | ||||
| 21,332 | 280.29 | 04/02/2028 | ||||
| 19,085 | 313.30 | 05/01/2028 | ||||
| 16,612 | 359.93 | 06/01/2028 | ||||
| 15,016 | 398.18 | 07/02/2028 | ||||
| 17,670 | 338.38 | 08/01/2028 | ||||
| 16,444 | 363.60 | 09/04/2028 | ||||
| 15,676 | 381.43 | 10/01/2028 | ||||
| 18,839 | 317.38 | 11/01/2028 | ||||
| 20,597 | 290.30 | 12/03/2028 | ||||
| 22,338 | 267.66 | 01/02/2029 | ||||
| 18,881 | 339.85 | 02/01/2029 | ||||
| 17,958 | 357.32 | 03/01/2029 | ||||
| 17,486 | 366.96 | 04/01/2029 | ||||
| 16,939 | 378.81 | 05/01/2029 | ||||
| 19,061 | 336.63 | 06/03/2029 | ||||
| 17,130 | 374.60 | 07/01/2029 | ||||
| 20,083 | 319.50 | 08/01/2029 | ||||
| 22,181 | 289.29 | 09/03/2029 | ||||
| 23,802 | 269.58 | 10/01/2029 | ||||
| 22,373 | 286.81 | 11/01/2029 | ||||
| 20,699 | 309.99 | 12/02/2029 | ||||
| 19,456 | 329.81 | 01/02/2030 | ||||
| 19,786 | 358.00 | 02/03/2030 | ||||
| 18,589 | 381.05 | 03/02/2030 | ||||
| 19,455 | 364.08 | 04/01/2030 | ||||
| 17,057 | 415.27 | 05/01/2030 | ||||
| 16,631 | 425.92 | 06/01/2030 | ||||
| 14,585 | 485.64 | 07/01/2030 | ||||
| 14,206 | 498.62 | 08/03/2030 | ||||
| 12,727 | 556.55 | 09/01/2030 | ||||
| 13,428 | 527.51 | 10/01/2030 | ||||
| 14,632 | 484.12 | 11/02/2030 | ||||
| 14,038 | 504.58 | 12/01/2030 | ||||
| 13,547 | 522.86 | 01/04/2031 | ||||
| 13,141 | 539.04 | 02/01/2031 | |||
| Option Awards | ||||||||||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||||||||
Reed Hastings | 25,998 | 48.07 | 5/1/2024 | |||||||||
Reed Hastings | 20,734 | 60.29 | 6/2/2024 | |||||||||
Reed Hastings | 18,494 | 67.59 | 7/1/2024 | |||||||||
Reed Hastings | 20,566 | 60.77 | 8/1/2024 | |||||||||
Reed Hastings | 18,361 | 68.09 | 9/2/2024 | |||||||||
Reed Hastings | 19,943 | 62.69 | 10/1/2024 | |||||||||
Reed Hastings | 22,526 | 55.49 | 11/3/2024 | |||||||||
Reed Hastings | 25,599 | 48.83 | 12/1/2024 | |||||||||
Reed Hastings | 25,074 | 49.85 | 1/2/2025 | |||||||||
Reed Hastings | 45,290 | 63.01 | 2/2/2025 | |||||||||
Reed Hastings | 41,601 | 68.61 | 3/2/2025 | |||||||||
Reed Hastings | 48,363 | 59.02 | 4/1/2025 | |||||||||
Reed Hastings | 35,868 | 79.58 | 5/1/2025 | |||||||||
Reed Hastings | 32,067 | 89.00 | 6/1/2025 | |||||||||
Reed Hastings | 30,485 | 93.64 | 7/1/2025 | |||||||||
Reed Hastings | 25,360 | 112.56 | 8/3/2025 | |||||||||
Reed Hastings | 26,977 | 105.79 | 9/1/2025 | |||||||||
Reed Hastings | 26,933 | 105.98 | 10/1/2025 | |||||||||
Reed Hastings | 26,513 | 107.64 | 11/2/2025 | |||||||||
Reed Hastings | 22,765 | 125.37 | 12/1/2025 | |||||||||
Reed Hastings | 25,959 | 109.96 | 1/4/2026 | |||||||||
Reed Hastings | 42,176 | 94.09 | 2/1/2026 | |||||||||
Reed Hastings | 40,374 | 98.30 | 3/1/2026 | |||||||||
Reed Hastings | 37,547 | 105.70 | 4/1/2026 | |||||||||
Reed Hastings | 42,629 | 93.11 | 5/2/2026 | |||||||||
Reed Hastings | 39,097 | 101.51 | 6/1/2026 | |||||||||
Reed Hastings | 41,055 | 96.67 | 7/1/2026 | |||||||||
Reed Hastings | 42,055 | 94.37 | 8/1/2026 | |||||||||
56 NETFLIX
2022 Proxy Statement | 71 |
| Option Awards | ||||||||||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||||||||
Reed Hastings | 40,755 | 97.38 | 9/1/2026 | |||||||||
Reed Hastings | 38,670 | 102.63 | 10/3/2026 | |||||||||
Reed Hastings | 32,188 | 123.30 | 11/1/2026 | |||||||||
Reed Hastings | 33,857 | 117.22 | 12/1/2026 | |||||||||
Reed Hastings | 31,130 | 127.49 | 1/3/2027 | |||||||||
Reed Hastings | 31,373 | 140.78 | 2/1/2027 | |||||||||
Reed Hastings | 30,961 | 142.65 | 3/1/2027 | |||||||||
Reed Hastings | 30,062 | 146.92 | 4/3/2027 | |||||||||
Reed Hastings | 28,431 | 155.35 | 5/1/2027 | |||||||||
Reed Hastings | 27,097 | 162.99 | 6/1/2027 | |||||||||
Reed Hastings | 30,216 | 146.17 | 7/3/2027 | |||||||||
Reed Hastings | 24,264 | 182.03 | 8/1/2027 | |||||||||
Reed Hastings | 25,275 | 174.74 | 9/1/2027 | |||||||||
Reed Hastings | 24,952 | 177.01 | 10/2/2027 | |||||||||
Reed Hastings | 22,306 | 198.00 | 11/1/2027 | |||||||||
Reed Hastings | 23,641 | 186.82 | 12/1/2027 | |||||||||
Reed Hastings | 21,966 | 201.07 | 1/2/2028 | |||||||||
Reed Hastings | 22,557 | 265.07 | 2/1/2028 | |||||||||
Reed Hastings | 20,590 | 290.39 | 3/1/2028 | |||||||||
Reed Hastings | 21,332 | 280.29 | 4/2/2028 | |||||||||
Reed Hastings | 19,085 | 313.30 | 5/1/2028 | |||||||||
Reed Hastings | 16,612 | 359.93 | 6/1/2028 | |||||||||
Reed Hastings | 15,016 | 398.18 | 7/2/2028 | |||||||||
Reed Hastings | 17,670 | 338.38 | 8/1/2028 | |||||||||
Reed Hastings | 16,444 | 363.60 | 9/4/2028 | |||||||||
Reed Hastings | 15,676 | 381.43 | 10/1/2028 | |||||||||
Reed Hastings | 18,839 | 317.38 | 11/1/2028 | |||||||||
Reed Hastings | 20,597 | 290.30 | 12/3/2028 | |||||||||
|
| Option Awards
| |||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||
Reed Hastings (continued) | 12,864 | 550.64 | 03/01/2031 | |||
| 13,131 | 539.42 | 04/01/2031 | ||||
| 13,913 | 509.11 | 05/03/2031 | ||||
| 14,193 | 499.08 | 06/01/2031 | ||||
| 13,276 | 533.54 | 07/01/2031 | ||||
| 13,750 | 515.15 | 08/02/2031 | ||||
| 12,169 | 582.07 | 09/01/2031 | ||||
| 11,553 | 613.15 | 10/01/2031 | ||||
| 10,398 | 681.17 | 11/01/2031 | ||||
| 11,466 | 617.77 | 12/01/2031 | ||||
Ted Sarandos | 25,130 | 79.58 | 05/1/2025 | |||
| 22,470 | 89.00 | 06/1/2025 | ||||
| 21,357 | 93.64 | 07/1/2025 | ||||
| 15,952 | 125.37 | 12/1/2025 | ||||
| 26,125 | 94.09 | 02/1/2026 | ||||
| 25,008 | 98.30 | 03/1/2026 | ||||
| 26,405 | 93.11 | 05/2/2026 | ||||
| 25,430 | 96.67 | 07/1/2026 | ||||
| 26,050 | 94.37 | 08/1/2026 | ||||
| 25,245 | 97.38 | 09/1/2026 | ||||
| 19,282 | 127.49 | 01/3/2027 | ||||
| 16,279 | 140.78 | 02/1/2027 | ||||
| 15,679 | 146.17 | 07/3/2027 | ||||
| 8,248 | 359.93 | 06/1/2028 | ||||
| 7,456 | 398.18 | 07/2/2028 | ||||
| 8,773 | 338.38 | 08/1/2028 | ||||
| 8,165 | 363.60 | 09/4/2028 | ||||
| 7,783 | 381.43 | 10/1/2028 | ||||
| 8,276 | 339.85 | 02/1/2029 | ||||
| 7,871 | 357.32 | 03/1/2029 | ||||
| 7,664 | 366.96 | 04/1/2029 | ||||
| 7,425 | 378.81 | 05/1/2029 | ||||
| 8,355 | 336.63 | 06/3/2029 | ||||
| 7,508 | 374.60 | 07/1/2029 | ||||
| 8,802 | 319.50 | 08/1/2029 | ||||
| 8,527 | 329.81 | 01/2/2030 | ||||
| 8,525 | 358.00 | 02/3/2030 | ||||
| 8,010 | 381.05 | 03/2/2030 | |||
2020 PROXY STATEMENT 57
72 |
|
|
| Option Awards
| |||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||
Ted Sarandos (continued) | 8,383 | 364.08 | 04/1/2030 | |||
| 7,350 | 415.27 | 05/1/2030 | ||||
| 7,166 | 425.92 | 06/1/2030 | ||||
| 6,284 | 485.64 | 07/1/2030 | ||||
| 6,121 | 498.62 | 08/3/2030 | ||||
| 5,484 | 556.55 | 09/1/2030 | ||||
| 5,786 | 527.51 | 10/1/2030 | ||||
| 6,304 | 484.12 | 11/2/2030 | ||||
| 6,049 | 504.58 | 12/1/2030 | ||||
| 5,837 | 522.86 | 01/4/2031 | ||||
| 5,662 | 539.04 | 02/1/2031 | ||||
| 5,543 | 550.64 | 03/1/2031 | ||||
| 5,658 | 539.42 | 04/1/2031 | ||||
| 5,995 | 509.11 | 05/3/2031 | ||||
| 6,116 | 499.08 | 06/1/2031 | ||||
| 5,720 | 533.54 | 07/1/2031 | ||||
| 5,925 | 515.15 | 08/2/2031 | ||||
| 5,243 | 582.07 | 09/1/2031 | ||||
| 4,978 | 613.15 | 10/1/2031 | ||||
| 4,481 | 681.17 | 11/1/2031 | ||||
| 4,940 | 617.77 | 12/1/2031 | ||||
Spencer Neumann | 1,308 | 339.85 | 02/1/2029 | |||
| 2,916 | 357.32 | 03/1/2029 | ||||
| 2,838 | 366.96 | 04/1/2029 | ||||
| 2,750 | 378.81 | 05/1/2029 | ||||
| 3,095 | 336.63 | 06/3/2029 | ||||
| 2,781 | 374.60 | 07/1/2029 | ||||
| 3,260 | 319.50 | 08/1/2029 | ||||
| 3,601 | 289.29 | 09/3/2029 | ||||
| 3,864 | 269.58 | 10/1/2029 | ||||
| 3,632 | 286.81 | 11/1/2029 | ||||
| 3,361 | 309.99 | 12/2/2029 | ||||
| 3,158 | 329.81 | 01/2/2030 | ||||
| 3,201 | 358.00 | 02/3/2030 | ||||
| 3,007 | 381.05 | 03/2/2030 | ||||
| 3,147 | 364.08 | 04/1/2030 | ||||
| 2,759 | 415.27 | 05/1/2030 | ||||
| 2,690 | 425.92 | 06/1/2030 | |||
| Option Awards | ||||||||||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||||||||
Reed Hastings | 22,338 | 267.66 | 1/2/2029 | |||||||||
Reed Hastings | 18,881 | 339.85 | 2/1/2029 | |||||||||
Reed Hastings | 17,958 | 357.32 | 3/1/2029 | |||||||||
Reed Hastings | 17,486 | 366.96 | 4/1/2029 | |||||||||
Reed Hastings | 16,939 | 378.81 | 5/1/2029 | |||||||||
Reed Hastings | 19,061 | 336.63 | 6/3/2029 | |||||||||
Reed Hastings | 17,130 | 374.60 | 7/1/2029 | |||||||||
Reed Hastings | 20,083 | 319.50 | 8/1/2029 | |||||||||
Reed Hastings | 22,181 | 289.29 | 9/3/2029 | |||||||||
Reed Hastings | 23,802 | 269.58 | 10/1/2029 | |||||||||
Reed Hastings | 22,373 | 286.81 | 11/1/2029 | |||||||||
Reed Hastings | 20,699 | 309.99 | 12/2/2029 | |||||||||
Spencer Neumann | 1,308 | 339.85 | 2/1/2029 | |||||||||
Spencer Neumann | 2,916 | 357.32 | 3/1/2029 | |||||||||
Spencer Neumann | 2,838 | 366.96 | 4/1/2029 | |||||||||
Spencer Neumann | 2,750 | 378.81 | 5/1/2029 | |||||||||
Spencer Neumann | 3,095 | 336.63 | 6/3/2029 | |||||||||
Spencer Neumann | 2,781 | 374.60 | 7/1/2029 | |||||||||
Spencer Neumann | 3,260 | 319.50 | 8/1/2029 | |||||||||
Spencer Neumann | 3,601 | 289.29 | 9/3/2029 | |||||||||
Spencer Neumann | 3,864 | 269.58 | 10/1/2029 | |||||||||
Spencer Neumann | 3,632 | 286.81 | 11/1/2029 | |||||||||
Spencer Neumann | 3,361 | 309.99 | 12/2/2029 | |||||||||
Ted Sarandos | 25,130 | 79.58 | 5/1/2025 | |||||||||
Ted Sarandos | 22,470 | 89.00 | 6/1/2025 | |||||||||
Ted Sarandos | 21,357 | 93.64 | 7/1/2025 | |||||||||
Ted Sarandos | 15,952 | 125.37 | 12/1/2025 | |||||||||
Ted Sarandos | 26,125 | 94.09 | 2/1/2026 | |||||||||
58 NETFLIX
2022 Proxy Statement | 73 |
| Option Awards | ||||||||||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||||||||
Ted Sarandos | 25,008 | 98.30 | 3/1/2026 | |||||||||
Ted Sarandos | 26,405 | 93.11 | 5/2/2026 | |||||||||
Ted Sarandos | 25,430 | 96.67 | 7/1/2026 | |||||||||
Ted Sarandos | 26,050 | 94.37 | 8/1/2026 | |||||||||
Ted Sarandos | 25,245 | 97.38 | 9/1/2026 | |||||||||
Ted Sarandos | 19,938 | 123.30 | 11/1/2026 | |||||||||
Ted Sarandos | 20,972 | 117.22 | 12/1/2026 | |||||||||
Ted Sarandos | 19,282 | 127.49 | 1/3/2027 | |||||||||
Ted Sarandos | 16,279 | 140.78 | 2/1/2027 | |||||||||
Ted Sarandos | 15,679 | 146.17 | 7/3/2027 | |||||||||
Ted Sarandos | 11,574 | 198.00 | 11/1/2027 | |||||||||
Ted Sarandos | 11,397 | 201.07 | 1/2/2028 | |||||||||
Ted Sarandos | 11,200 | 265.07 | 2/1/2028 | |||||||||
Ted Sarandos | 10,223 | 290.39 | 3/1/2028 | |||||||||
Ted Sarandos | 10,592 | 280.29 | 4/2/2028 | |||||||||
Ted Sarandos | 9,476 | 313.30 | 5/1/2028 | |||||||||
Ted Sarandos | 8,248 | 359.93 | 6/1/2028 | |||||||||
Ted Sarandos | 7,456 | 398.18 | 7/2/2028 | |||||||||
Ted Sarandos | 8,773 | 338.38 | 8/1/2028 | |||||||||
Ted Sarandos | 8,165 | 363.60 | 9/4/2028 | |||||||||
Ted Sarandos | 7,783 | 381.43 | 10/1/2028 | |||||||||
Ted Sarandos | 9,354 | 317.38 | 11/1/2028 | |||||||||
Ted Sarandos | 10,227 | 290.30 | 12/3/2028 | |||||||||
Ted Sarandos | 11,091 | 267.66 | 1/2/2029 | |||||||||
Ted Sarandos | 8,276 | 339.85 | 2/1/2029 | |||||||||
Ted Sarandos | 7,871 | 357.32 | 3/1/2029 | |||||||||
Ted Sarandos | 7,664 | 366.96 | 4/1/2029 | |||||||||
Ted Sarandos | 7,425 | 378.81 | 5/1/2029 | |||||||||
|
| Option Awards
| |||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||
Spencer Neumann (continued) | 2,360 | 485.64 | 07/1/2030 | |||
| 2,298 | 498.62 | 08/3/2030 | ||||
| 2,058 | 556.55 | 09/1/2030 | ||||
| 2,173 | 527.51 | 10/1/2030 | ||||
| 2,367 | 484.12 | 11/2/2030 | ||||
| 2,270 | 504.58 | 12/1/2030 | ||||
| 2,192 | 522.86 | 01/4/2031 | ||||
| 2,145 | 539.04 | 02/1/2031 | ||||
| 2,100 | 550.64 | 03/1/2031 | ||||
| 2,143 | 539.42 | 04/1/2031 | ||||
| 2,271 | 509.11 | 05/3/2031 | ||||
| 2,317 | 499.08 | 06/1/2031 | ||||
| 2,167 | 533.54 | 07/1/2031 | ||||
| 2,245 | 515.15 | 08/2/2031 | ||||
| 1,986 | 582.07 | 09/1/2031 | ||||
| 1,886 | 613.15 | 10/1/2031 | ||||
| 1,697 | 681.17 | 11/1/2031 | ||||
| 1,872 | 617.77 | 12/1/2031 | ||||
Greg Peters | 7,230 | 94.37 | 08/1/2026 | |||
| 7,007 | 97.38 | 09/1/2026 | ||||
| 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 | 01/3/2027 | ||||
| 4,846 | 140.78 | 02/1/2027 | ||||
| 4,783 | 142.65 | 03/1/2027 | ||||
| 4,644 | 146.92 | 04/3/2027 | ||||
| 4,392 | 155.35 | 05/1/2027 | ||||
| 4,186 | 162.99 | 06/1/2027 | ||||
| 4,668 | 146.17 | 07/3/2027 | ||||
| 3,891 | 182.03 | 08/1/2027 | ||||
| 4,054 | 174.74 | 09/1/2027 | ||||
| 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 | 01/2/2028 | ||||
| 5,187 | 265.07 | 02/1/2028 | ||||
| 4,735 | 290.39 | 03/1/2028 | |||
2020 PROXY STATEMENT 59
74 |
|
|
| Option Awards
| |||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||
Greg Peters (continued) | 4,906 | 280.29 | 04/2/2028 | |||
| 4,389 | 313.30 | 05/1/2028 | ||||
| 3,820 | 359.93 | 06/1/2028 | ||||
| 3,453 | 398.18 | 07/2/2028 | ||||
| 4,063 | 338.38 | 08/1/2028 | ||||
| 3,782 | 363.60 | 09/4/2028 | ||||
| 3,605 | 381.43 | 10/1/2028 | ||||
| 4,332 | 317.38 | 11/1/2028 | ||||
| 4,737 | 290.30 | 12/3/2028 | ||||
| 5,137 | 267.66 | 01/2/2029 | ||||
| 4,168 | 339.85 | 02/1/2029 | ||||
| 3,965 | 357.32 | 03/1/2029 | ||||
| 3,861 | 366.96 | 04/1/2029 | ||||
| 3,739 | 378.81 | 05/1/2029 | ||||
| 4,209 | 336.63 | 06/3/2029 | ||||
| 3,782 | 374.60 | 07/1/2029 | ||||
| 4,434 | 319.50 | 08/1/2029 | ||||
| 4,897 | 289.29 | 09/3/2029 | ||||
| 5,255 | 269.58 | 10/1/2029 | ||||
| 4,939 | 286.81 | 11/1/2029 | ||||
| 4,570 | 309.99 | 12/2/2029 | ||||
| 4,296 | 329.81 | 01/2/2030 | ||||
| 4,015 | 358.00 | 02/3/2030 | ||||
| 3,772 | 381.05 | 03/2/2030 | ||||
| 3,949 | 364.08 | 04/1/2030 | ||||
| 3,461 | 415.27 | 05/1/2030 | ||||
| 3,375 | 425.92 | 06/1/2030 | ||||
| 2,960 | 485.64 | 07/1/2030 | ||||
| 2,883 | 498.62 | 08/3/2030 | ||||
| 2,583 | 556.55 | 09/1/2030 | ||||
| 2,725 | 527.51 | 10/1/2030 | ||||
| 2,969 | 484.12 | 11/2/2030 | ||||
| 2,849 | 504.58 | 12/1/2030 | ||||
| 2,750 | 522.86 | 01/4/2031 | ||||
| 2,666 | 539.04 | 02/1/2031 | ||||
| 2,611 | 550.64 | 03/1/2031 | ||||
| 2,665 | 539.42 | 04/1/2031 | ||||
| 2,823 | 509.11 | 05/3/2031 | ||||
| 2,881 | 499.08 | 06/1/2031 | ||||
| 2,694 | 533.54 | 07/1/2031 | |||
| Option Awards | ||||||||||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||||||||
Ted Sarandos | 8,355 | 336.63 | 6/3/2029 | |||||||||
Ted Sarandos | 7,508 | 374.60 | 7/1/2029 | |||||||||
Ted Sarandos | 8,802 | 319.50 | 8/1/2029 | |||||||||
Ted Sarandos | 9,723 | 289.29 | 9/3/2029 | |||||||||
Ted Sarandos | 10,433 | 269.58 | 10/1/2029 | |||||||||
Ted Sarandos | 9,806 | 286.81 | 11/1/2029 | |||||||||
Ted Sarandos | 9,073 | 309.99 | 12/2/2029 | |||||||||
Greg Peters | 5,047 | 112.56 | 8/3/2025 | |||||||||
Greg Peters | 5,366 | 105.79 | 9/1/2025 | |||||||||
Greg Peters | 5,357 | 105.98 | 10/1/2025 | |||||||||
Greg Peters | 5,274 | 107.64 | 11/2/2025 | |||||||||
Greg Peters | 4,528 | 125.37 | 12/1/2025 | |||||||||
Greg Peters | 5,163 | 109.96 | 1/4/2026 | |||||||||
Greg Peters | 7,251 | 94.09 | 2/1/2026 | |||||||||
Greg Peters | 6,941 | 98.30 | 3/1/2026 | |||||||||
Greg Peters | 6,455 | 105.70 | 4/1/2026 | |||||||||
Greg Peters | 7,329 | 93.11 | 5/2/2026 | |||||||||
Greg Peters | 6,721 | 101.51 | 6/1/2026 | |||||||||
Greg Peters | 7,058 | 96.67 | 7/1/2026 | |||||||||
Greg Peters | 7,230 | 94.37 | 8/1/2026 | |||||||||
Greg Peters | 7,007 | 97.38 | 9/1/2026 | |||||||||
Greg Peters | 6,648 | 102.63 | 10/3/2026 | |||||||||
Greg Peters | 5,533 | 123.30 | 11/1/2026 | |||||||||
Greg Peters | 5,821 | 117.22 | 12/1/2026 | |||||||||
Greg Peters | 5,352 | 127.49 | 1/3/2027 | |||||||||
Greg Peters | 4,846 | 140.78 | 2/1/2027 | |||||||||
Greg Peters | 4,783 | 142.65 | 3/1/2027 | |||||||||
Greg Peters | 4,644 | 146.92 | 4/3/2027 | |||||||||
60 NETFLIX
2022 Proxy Statement | 75 |
| Option Awards | ||||||||||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||||||||
Greg Peters | 4,392 | 155.35 | 5/1/2027 | |||||||||
Greg Peters | 4,186 | 162.99 | 6/1/2027 | |||||||||
Greg Peters | 4,668 | 146.17 | 7/3/2027 | |||||||||
Greg Peters | 3,891 | 182.03 | 8/1/2027 | |||||||||
Greg Peters | 4,054 | 174.74 | 9/1/2027 | |||||||||
Greg Peters | 4,001 | 177.01 | 10/2/2027 | |||||||||
Greg Peters | 3,578 | 198.00 | 11/1/2027 | |||||||||
Greg Peters | 3,791 | 186.82 | 12/1/2027 | |||||||||
Greg Peters | 3,523 | 201.07 | 1/2/2028 | |||||||||
Greg Peters | 5,187 | 265.07 | 2/1/2028 | |||||||||
Greg Peters | 4,735 | 290.39 | 3/1/2028 | |||||||||
Greg Peters | 4,906 | 280.29 | 4/2/2028 | |||||||||
Greg Peters | 4,389 | 313.30 | 5/1/2028 | |||||||||
Greg Peters | 3,820 | 359.93 | 6/1/2028 | |||||||||
Greg Peters | 3,453 | 398.18 | 7/2/2028 | |||||||||
Greg Peters | 4,063 | 338.38 | 8/1/2028 | |||||||||
Greg Peters | 3,782 | 363.60 | 9/4/2028 | |||||||||
Greg Peters | 3,605 | 381.43 | 10/1/2028 | |||||||||
Greg Peters | 4,332 | 317.38 | 11/1/2028 | |||||||||
Greg Peters | 4,737 | 290.30 | 12/3/2028 | |||||||||
Greg Peters | 5,137 | 267.66 | 1/2/2029 | |||||||||
Greg Peters | 4,168 | 339.85 | 2/1/2029 | |||||||||
Greg Peters | 3,965 | 357.32 | 3/1/2029 | |||||||||
Greg Peters | 3,861 | 366.96 | 4/1/2029 | |||||||||
Greg Peters | 3,739 | 378.81 | 5/1/2029 | |||||||||
Greg Peters | 4,209 | 336.63 | 6/3/2029 | |||||||||
Greg Peters | 3,782 | 374.60 | 7/1/2029 | |||||||||
Greg Peters | 4,434 | 319.50 | 8/1/2029 | |||||||||
|
| Option Awards
| |||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||
Greg Peters (continued) | 2,790 | 515.15 | 08/2/2031 | |||
| 2,470 | 582.07 | 09/1/2031 | ||||
| 2,344 | 613.15 | 10/1/2031 | ||||
| 2,111 | 681.17 | 11/1/2031 | ||||
| 2,327 | 617.77 | 12/1/2031 | ||||
David Hyman | 3,143 | 79.58 | 05/1/2025 | |||
| 2,807 | 89.00 | 06/1/2025 | ||||
| 2,667 | 93.64 | 07/1/2025 | ||||
| 2,221 | 112.56 | 08/3/2025 | ||||
| 2,363 | 105.79 | 09/1/2025 | ||||
| 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 | 01/4/2026 | ||||
| 4,439 | 94.09 | 02/1/2026 | ||||
| 4,249 | 98.30 | 03/1/2026 | ||||
| 3,952 | 105.70 | 04/1/2026 | ||||
| 4,487 | 93.11 | 05/2/2026 | ||||
| 4,115 | 101.51 | 06/1/2026 | ||||
| 4,321 | 96.67 | 07/1/2026 | ||||
| 4,426 | 94.37 | 08/1/2026 | ||||
| 4,290 | 97.38 | 09/1/2026 | ||||
| 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 | 01/3/2027 | ||||
| 1,798 | 140.78 | 02/1/2027 | ||||
| 1,775 | 142.65 | 03/1/2027 | ||||
| 1,722 | 146.92 | 04/3/2027 | ||||
| 1,630 | 155.35 | 05/1/2027 | ||||
| 1,553 | 162.99 | 06/1/2027 | ||||
| 1,732 | 146.17 | 07/3/2027 | ||||
| 1,390 | 182.03 | 08/1/2027 | ||||
| 1,449 | 174.74 | 09/1/2027 | ||||
| 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 | 01/2/2028 | ||||
| 2,574 | 265.07 | 02/1/2028 | ||||
| 2,349 | 290.39 | 03/1/2028 | |||
2020 PROXY STATEMENT 61
76 |
|
|
| Option Awards
| |||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||
David Hyman (continued) | 2,435 | 280.29 | 04/2/2028 | |||
| 2,177 | 313.30 | 05/1/2028 | ||||
| 1,896 | 359.93 | 06/1/2028 | ||||
| 1,713 | 398.18 | 07/2/2028 | ||||
| 2,017 | 338.38 | 08/1/2028 | ||||
| 1,876 | 363.60 | 09/4/2028 | ||||
| 1,789 | 381.43 | 10/1/2028 | ||||
| 2,150 | 317.38 | 11/1/2028 | ||||
| 2,350 | 290.30 | 12/3/2028 | ||||
| 2,549 | 267.66 | 01/2/2029 | ||||
| 2,360 | 339.85 | 02/1/2029 | ||||
| 2,245 | 357.32 | 03/1/2029 | ||||
| 2,186 | 366.96 | 04/1/2029 | ||||
| 2,117 | 378.81 | 05/1/2029 | ||||
| 2,383 | 336.63 | 06/3/2029 | ||||
| 2,141 | 374.60 | 07/1/2029 | ||||
| 2,511 | 319.50 | 08/1/2029 | ||||
| 2,772 | 289.29 | 09/3/2029 | ||||
| 2,976 | 269.58 | 10/1/2029 | ||||
| 2,796 | 286.81 | 11/1/2029 | ||||
| 2,587 | 309.99 | 12/2/2029 | ||||
| 2,432 | 329.81 | 01/2/2030 | ||||
| 2,299 | 358.00 | 02/3/2030 | ||||
| 2,160 | 381.05 | 03/2/2030 | ||||
| 2,260 | 364.08 | 04/1/2030 | ||||
| 1,981 | 415.27 | 05/1/2030 | ||||
| 1,932 | 425.92 | 06/1/2030 | ||||
| 1,695 | 485.64 | 07/1/2030 | ||||
| 1,650 | 498.62 | 08/3/2030 | ||||
| 1,479 | 556.55 | 09/1/2030 | ||||
| 1,560 | 527.51 | 10/1/2030 | ||||
| 1,700 | 484.12 | 11/2/2030 | ||||
| 1,631 | 504.58 | 12/1/2030 | ||||
| 1,573 | 522.86 | 01/4/2031 | ||||
| 1,827 | 539.04 | 02/1/2031 | ||||
| 1,787 | 550.64 | 03/1/2031 | ||||
| 1,825 | 539.42 | 04/1/2031 | ||||
| 1,934 | 509.11 | 05/3/2031 | ||||
| 1,972 | 499.08 | 06/1/2031 | ||||
| 1,845 | 533.54 | 07/1/2031 | ||||
| 1,911 | 515.15 | 08/2/2031 | |||
| Option Awards | ||||||||||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||||||||
Greg Peters | 4,897 | 289.29 | 9/3/2029 | |||||||||
Greg Peters | 5,255 | 269.58 | 10/1/2029 | |||||||||
Greg Peters | 4,939 | 286.81 | 11/1/2029 | |||||||||
Greg Peters | 4,570 | 309.99 | 12/2/2029 | |||||||||
David Hyman | 5,145 | 60.77 | 8/1/2024 | |||||||||
David Hyman | 4,592 | 68.09 | 9/2/2024 | |||||||||
David Hyman | 4,984 | 62.69 | 10/1/2024 | |||||||||
David Hyman | 5,635 | 55.49 | 11/3/2024 | |||||||||
David Hyman | 6,398 | 48.83 | 12/1/2024 | |||||||||
David Hyman | 6,272 | 49.85 | 1/2/2025 | |||||||||
David Hyman | 3,962 | 63.01 | 2/2/2025 | |||||||||
David Hyman | 3,647 | 68.61 | 3/2/2025 | |||||||||
David Hyman | 4,235 | 59.02 | 4/1/2025 | |||||||||
David Hyman | 3,143 | 79.58 | 5/1/2025 | |||||||||
David Hyman | 2,807 | 89.00 | 6/1/2025 | |||||||||
David Hyman | 2,667 | 93.64 | 7/1/2025 | |||||||||
David Hyman | 2,221 | 112.56 | 8/3/2025 | |||||||||
David Hyman | 2,363 | 105.79 | 9/1/2025 | |||||||||
David Hyman | 2,359 | 105.98 | 10/1/2025 | |||||||||
David Hyman | 2,322 | 107.64 | 11/2/2025 | |||||||||
David Hyman | 1,994 | 125.37 | 12/1/2025 | |||||||||
David Hyman | 2,274 | 109.96 | 1/4/2026 | |||||||||
David Hyman | 4,439 | 94.09 | 2/1/2026 | |||||||||
David Hyman | 4,249 | 98.30 | 3/1/2026 | |||||||||
David Hyman | 3,952 | 105.70 | 4/1/2026 | |||||||||
David Hyman | 4,487 | 93.11 | 5/2/2026 | |||||||||
David Hyman | 4,115 | 101.51 | 6/1/2026 | |||||||||
David Hyman | 4,321 | 96.67 | 7/1/2026 | |||||||||
62 NETFLIX
2022 Proxy Statement | 77 |
| Option Awards | ||||||||||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||||||||
David Hyman | 4,426 | 94.37 | 8/1/2026 | |||||||||
David Hyman | 4,290 | 97.38 | 9/1/2026 | |||||||||
David Hyman | 4,070 | 102.63 | 10/3/2026 | |||||||||
David Hyman | 3,387 | 123.30 | 11/1/2026 | |||||||||
David Hyman | 3,564 | 117.22 | 12/1/2026 | |||||||||
David Hyman | 3,276 | 127.49 | 1/3/2027 | |||||||||
David Hyman | 1,798 | 140.78 | 2/1/2027 | |||||||||
David Hyman | 1,775 | 142.65 | 3/1/2027 | |||||||||
David Hyman | 1,722 | 146.92 | 4/3/2027 | |||||||||
David Hyman | 1,630 | 155.35 | 5/1/2027 | |||||||||
David Hyman | 1,553 | 162.99 | 6/1/2027 | |||||||||
David Hyman | 1,732 | 146.17 | 7/3/2027 | |||||||||
David Hyman | 1,390 | 182.03 | 8/1/2027 | |||||||||
David Hyman | 1,449 | 174.74 | 9/1/2027 | |||||||||
David Hyman | 1,430 | 177.01 | 10/02/2027 | |||||||||
David Hyman | 1,278 | 198.00 | 11/01/2027 | |||||||||
David Hyman | 1,355 | 186.82 | 12/01/2027 | |||||||||
David Hyman | 1,259 | 201.07 | 01/02/2028 | |||||||||
David Hyman | 2,574 | 265.07 | 02/01/2028 | |||||||||
David Hyman | 2,349 | 290.39 | 03/01/2028 | |||||||||
David Hyman | 2,435 | 280.29 | 04/02/2028 | |||||||||
David Hyman | 2,177 | 313.30 | 05/01/2028 | |||||||||
David Hyman | 1,896 | 359.93 | 06/01/2028 | |||||||||
David Hyman | 1,713 | 398.18 | 07/02/2028 | |||||||||
David Hyman | 2,017 | 338.38 | 08/01/2028 | |||||||||
David Hyman | 1,876 | 363.60 | 09/04/2028 | |||||||||
David Hyman | 1,789 | 381.43 | 10/01/2028 | |||||||||
David Hyman | 2,150 | 317.38 | 11/01/2028 | |||||||||
|
| Option Awards
| |||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||
David Hyman (continued) | 1,691 | 582.07 | 09/1/2031 | |||
| 1,605 | 613.15 | 10/1/2031 | ||||
| 1,445 | 681.17 | 11/1/2031 | ||||
| 1,594 | 617.77 | 12/1/2031 | ||||
Rachel Whetstone | 20 | 290.30 | 12/3/2028 | |||
| 137 | 267.66 | 01/2/2029 | ||||
| 214 | 339.85 | 02/1/2029 | ||||
| 204 | 357.32 | 03/1/2029 | ||||
| 199 | 366.96 | 04/1/2029 | ||||
| 192 | 378.81 | 05/1/2029 | ||||
| 217 | 336.63 | 06/3/2029 | ||||
| 195 | 374.60 | 07/1/2029 | ||||
| 228 | 319.50 | 08/1/2029 | ||||
| 252 | 289.29 | 09/3/2029 | ||||
| 271 | 269.58 | 10/1/2029 | ||||
| 254 | 286.81 | 11/1/2029 | ||||
| 235 | 309.99 | 12/2/2029 | ||||
| 221 | 329.81 | 01/2/2030 | ||||
| 262 | 358.00 | 02/3/2030 | ||||
| 246 | 381.05 | 03/2/2030 | ||||
| 257 | 364.08 | 04/1/2030 | ||||
| 226 | 415.27 | 05/1/2030 | ||||
| 220 | 425.92 | 06/1/2030 | ||||
| 193 | 485.64 | 07/1/2030 | ||||
| 188 | 498.62 | 08/3/2030 | ||||
| 169 | 556.55 | 09/1/2030 | ||||
| 177 | 527.51 | 10/1/2030 | ||||
| 194 | 484.12 | 11/2/2030 | ||||
| 186 | 504.58 | 12/1/2030 | ||||
| 179 | 522.86 | 01/4/2031 | ||||
| 193 | 539.04 | 02/1/2031 | ||||
| 189 | 550.64 | 03/1/2031 | ||||
| 194 | 539.42 | 04/1/2031 | ||||
| 204 | 509.11 | 05/3/2031 | ||||
| 209 | 499.08 | 06/1/2031 | ||||
| 195 | 533.54 | 07/1/2031 | ||||
| 202 | 515.15 | 08/2/2031 | ||||
| 179 | 582.07 | 09/1/2031 | ||||
| 170 | 613.15 | 10/1/2031 | ||||
| 153 | 681.17 | 11/1/2031 | ||||
| 169 | 617.77 | 12/1/2031 | ||||
2020 PROXY STATEMENT 63
78 |
|
| Option Awards | ||||||||||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||||||||
David Hyman | 2,350 | 290.30 | 12/03/2028 | |||||||||
David Hyman | 2,549 | 267.66 | 01/02/2029 | |||||||||
David Hyman | 2,360 | 339.85 | 02/01/2029 | |||||||||
David Hyman | 2,245 | 357.32 | 03/01/2029 | |||||||||
David Hyman | 2,186 | 366.96 | 04/01/2029 | |||||||||
David Hyman | 2,117 | 378.81 | 05/01/2029 | |||||||||
David Hyman | 2,383 | 336.63 | 06/03/2029 | |||||||||
David Hyman | 2,141 | 374.60 | 07/01/2029 | |||||||||
David Hyman | 2,511 | 319.50 | 08/01/2029 | |||||||||
David Hyman | 2,772 | 289.29 | 09/03/2029 | |||||||||
David Hyman | 2,976 | 269.58 | 10/01/2029 | |||||||||
David Hyman | 2,796 | 286.81 | 11/01/2029 | |||||||||
David Hyman | 2,587 | 309.99 | 12/02/2029 | |||||||||
Kelly Bennett | 644 | 68.61 | 3/2/2025 | |||||||||
Kelly Bennett | 1,470 | 79.58 | 5/1/2025 | |||||||||
Kelly Bennett | 1,309 | 89.00 | 6/1/2025 | |||||||||
Kelly Bennett | 1,246 | 93.64 | 7/1/2025 | |||||||||
Kelly Bennett | 1,040 | 112.56 | 8/3/2025 | |||||||||
Kelly Bennett | 1,181 | 105.79 | 9/1/2025 | |||||||||
Kelly Bennett | 1,180 | 105.98 | 10/1/2025 | |||||||||
Kelly Bennett | 1,161 | 107.64 | 11/2/2025 | |||||||||
Kelly Bennett | 997 | 125.37 | 12/1/2025 | |||||||||
Kelly Bennett | 1,137 | 109.96 | 1/4/2026 | |||||||||
Kelly Bennett | 1,771 | 94.09 | 2/1/2026 | |||||||||
Kelly Bennett | 1,695 | 98.30 | 3/1/2026 | |||||||||
Kelly Bennett | 1,577 | 105.70 | 4/1/2026 | |||||||||
Kelly Bennett | 1,790 | 93.11 | 5/2/2026 | |||||||||
Kelly Bennett | 1,642 | 101.51 | 6/1/2026 | |||||||||
64 NETFLIX
| Option Awards | ||||||||||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||||||||
Kelly Bennett | 1,724 | 96.67 | 7/1/2026 | |||||||||
Kelly Bennett | 1,766 | 94.37 | 8/1/2026 | |||||||||
Kelly Bennett | 1,712 | 97.38 | 9/1/2026 | |||||||||
Kelly Bennett | 1,624 | 102.63 | 10/3/2026 | |||||||||
Kelly Bennett | 1,351 | 123.30 | 11/1/2026 | |||||||||
Kelly Bennett | 1,422 | 117.22 | 12/1/2026 | |||||||||
Kelly Bennett | 1,308 | 127.49 | 1/3/2027 | |||||||||
Kelly Bennett | 1,272 | 140.78 | 2/1/2027 | |||||||||
Kelly Bennett | 1,256 | 142.65 | 3/1/2027 | |||||||||
Kelly Bennett | 1,220 | 146.92 | 4/3/2027 | |||||||||
Kelly Bennett | 1,153 | 155.35 | 5/1/2027 | |||||||||
Kelly Bennett | 1,099 | 162.99 | 6/1/2027 | |||||||||
Kelly Bennett | 1,226 | 146.17 | 7/3/2027 | |||||||||
Kelly Bennett | 984 | 182.03 | 8/1/2027 | |||||||||
Kelly Bennett | 1,026 | 174.74 | 9/1/2027 | |||||||||
Kelly Bennett | 1,012 | 177.01 | 10/2/2027 | |||||||||
Kelly Bennett | 905 | 198.00 | 11/1/2027 | |||||||||
Kelly Bennett | 959 | 186.82 | 12/1/2027 | |||||||||
Kelly Bennett | 891 | 201.07 | 1/2/2028 | |||||||||
Kelly Bennett | 668 | 265.07 | 2/1/2028 | |||||||||
Kelly Bennett | 609 | 290.39 | 3/1/2028 | |||||||||
Kelly Bennett | 632 | 280.29 | 4/2/2028 | |||||||||
Kelly Bennett | 565 | 313.30 | 5/1/2028 | |||||||||
Kelly Bennett | 492 | 359.93 | 6/1/2028 | |||||||||
Kelly Bennett | 445 | 398.18 | 7/2/2028 | |||||||||
Kelly Bennett | 585 | 338.38 | 8/1/2028 | |||||||||
Kelly Bennett | 544 | 363.60 | 9/4/2028 | |||||||||
Kelly Bennett | 519 | 381.43 | 10/1/2028 | |||||||||
2020 PROXY STATEMENT 65
| Option Awards | ||||||||||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||||||||
Kelly Bennett | 624 | 317.38 | 11/1/2028 | |||||||||
Kelly Bennett | 682 | 290.30 | 12/3/2028 | |||||||||
Kelly Bennett | 739 | 267.66 | 1/2/2029 | |||||||||
Kelly Bennett | 705 | 339.85 | 2/1/2029 | |||||||||
Kelly Bennett | 670 | 357.32 | 3/1/2029 | |||||||||
Kelly Bennett | 653 | 366.96 | 4/1/2029 | |||||||||
Kelly Bennett | 633 | 378.81 | 5/1/2029 | |||||||||
Kelly Bennett | 711 | 336.63 | 6/3/2029 | |||||||||
David Wells | 3,367 | 68.09 | 9/2/2024 | |||||||||
David Wells | 3,654 | 62.69 | 10/1/2024 | |||||||||
David Wells | 4,130 | 55.49 | 11/3/2024 | |||||||||
David Wells | 4,690 | 48.83 | 12/1/2024 | |||||||||
David Wells | 4,599 | 49.85 | 1/2/2025 | |||||||||
David Wells | 5,537 | 63.01 | 2/2/2025 | |||||||||
David Wells | 5,082 | 68.61 | 3/2/2025 | |||||||||
David Wells | 5,915 | 59.02 | 4/1/2025 | |||||||||
David Wells | 4,382 | 79.58 | 5/1/2025 | |||||||||
David Wells | 3,920 | 89.00 | 6/1/2025 | |||||||||
David Wells | 3,731 | 93.64 | 7/1/2025 | |||||||||
David Wells | 3,101 | 112.56 | 8/3/2025 | |||||||||
David Wells | 3,298 | 105.79 | 9/1/2025 | |||||||||
David Wells | 3,293 | 105.98 | 10/1/2025 | |||||||||
David Wells | 3,241 | 107.64 | 11/2/2025 | |||||||||
David Wells | 2,784 | 125.37 | 12/1/2025 | |||||||||
David Wells | 3,173 | 109.96 | 1/4/2026 | |||||||||
David Wells | 3,986 | 94.09 | 2/1/2026 | |||||||||
David Wells | 3,814 | 98.30 | 3/1/2026 | |||||||||
David Wells | 3,548 | 105.70 | 4/1/2026 | |||||||||
66 NETFLIX
| Option Awards | ||||||||||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||||||||
David Wells | 4,028 | 93.11 | 5/2/2026 | |||||||||
David Wells | 3,694 | 101.51 | 6/1/2026 | |||||||||
David Wells | 3,880 | 96.67 | 7/1/2026 | |||||||||
David Wells | 3,973 | 94.37 | 8/1/2026 | |||||||||
David Wells | 3,851 | 97.38 | 9/1/2026 | |||||||||
David Wells | 3,654 | 102.63 | 10/3/2026 | |||||||||
David Wells | 3,041 | 123.30 | 11/1/2026 | |||||||||
David Wells | 3,199 | 117.22 | 12/1/2026 | |||||||||
David Wells | 2,942 | 127.49 | 1/3/2027 | |||||||||
David Wells | 2,826 | 140.78 | 2/1/2027 | |||||||||
David Wells | 2,790 | 142.65 | 3/1/2027 | |||||||||
David Wells | 2,708 | 146.92 | 4/3/2027 | |||||||||
David Wells | 2,562 | 155.35 | 5/1/2027 | |||||||||
David Wells | 2,441 | 162.99 | 6/1/2027 | |||||||||
David Wells | 2,722 | 146.17 | 7/3/2027 | |||||||||
David Wells | 2,186 | 182.03 | 8/1/2027 | |||||||||
David Wells | 2,277 | 174.74 | 9/1/2027 | |||||||||
David Wells | 2,248 | 177.01 | 10/2/2027 | |||||||||
David Wells | 2,010 | 198.00 | 11/1/2027 | |||||||||
David Wells | 2,130 | 186.82 | 12/1/2027 | |||||||||
David Wells | 1,979 | 201.07 | 1/2/2028 | |||||||||
David Wells | 1,925 | 265.07 | 2/1/2028 | |||||||||
David Wells | 1,758 | 290.39 | 3/1/2028 | |||||||||
David Wells | 1,821 | 280.29 | 4/2/2028 | |||||||||
David Wells | 1,629 | 313.30 | 5/1/2028 | |||||||||
David Wells | 1,418 | 359.93 | 6/1/2028 | |||||||||
David Wells | 1,282 | 398.18 | 7/2/2028 | |||||||||
David Wells | 1,508 | 338.38 | 8/1/2028 | |||||||||
2020 PROXY STATEMENT 67
| Option Awards | ||||||||||||
Name | Number of Securities Underlying Unexercised Options: Exercisable (#) | Option Exercise Price ($) | Option Expiration Date | |||||||||
David Wells | 1,404 | 363.60 | 9/4/2028 | |||||||||
David Wells | 1,338 | 381.43 | 10/1/2028 | |||||||||
David Wells | 1,609 | 317.38 | 11/1/2028 | |||||||||
David Wells | 1,758 | 290.30 | 12/3/2028 | |||||||||
David Wells | 1,907 | 267.66 | 1/2/2029 | |||||||||
The following table sets forth information concerning each exercise of stock options during 20192021 for each of the Named Executive Officers on an aggregated basis.
| Option Awards | ||||||||||
Name | Number of Shares Acquired on Exercise | Value Realized on Exercise ($)(1) | ||||||||
Reed Hastings | 788,508 | 452,432,715 | ||||||||
Ted Sarandos | 69,707 | 23,410,294 | ||||||||
Spencer Neumann | — | — | ||||||||
Greg Peters | 34,504 | 19,028,557 | ||||||||
David Hyman | 18,116 | 10,169,476 | ||||||||
Rachel Whetstone | — | — | ||||||||
| Option Awards | ||||||||
Name | Number of Shares Acquired on Exercise (#) | Value Realized on Exercise ($)1 | ||||||
Reed Hastings | 682,199 | 221,477,910 | ||||||
Spencer Neumann | — | — | ||||||
Ted Sarandos | — | — | ||||||
Greg Peters | — | — | ||||||
David Hyman | — | — | ||||||
David Wells | 35,917 | 9,899,689 | ||||||
Kelly Bennett | — | — | ||||||
Dollar value realized on exercise equals the difference between the closing price on the date of exercise less the exercise price of the option and does not necessarily reflect the sales price of the shares or if a sale was made. |
68 NETFLIX
Potential Payments upon Termination orChange-in-Control
The Named Executive Officers are beneficiaries of the Company’s Amended and Restated Executiveour Severance and Retention Incentive Plan, as described in more detail above in “Compensation Discussion and Analysis.” The information below reflects the estimated value of the compensation to be paid by the Companyus to each of the Named Executive Officers in the event of termination or a change in control under the terms of the Amended and Restated Executive Severance and Retention Incentive Plan. The amounts shown below assume that termination or change in control was effective as of December 31, 20192021 and is based on 20202022 allocatable compensation, which went into effect prior to the end of the 20192021 fiscal year. The actual amounts that would be paid can only be determined at the time of the actual triggering event.
Name | Severance Benefit ($)(1) | Change in Control Benefit ($)(2) | ||||||||
Reed Hastings | 34,650,000 | 34,650,000 | ||||||||
Ted Sarandos | 40,000,000 | 40,000,000 | ||||||||
Spencer Neumann | 14,000,000 | 14,000,000 | ||||||||
Greg Peters | 24,000,000 | 24,000,000 | ||||||||
David Hyman | 11,000,000 | 11,000,000 | ||||||||
Rachel Whetstone | 6,500,000 | 6,500,000 | ||||||||
Name | Severance Benefit1 | Change in Control Benefit2 | ||||||
Reed Hastings | 24,750,000 | 33,000,000 | ||||||
Spencer Neumann | 11,916,667 | 11,000,000 | ||||||
Ted Sarandos | 24,750,000 | 33,000,000 | ||||||
Greg Peters | 13,500,000 | 18,000,000 | ||||||
David Hyman | 6,750,000 | 9,000,000 | ||||||
The amounts in this column correspond to lump sum payments in cash that are equal to |
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, |
In connection with their mutually agreed departures from Netflix in January 2019 and June 2019, respectively, Mr. Wells and Mr. Bennett entered into Netflix’s standard form of release agreement which included customary confidentiality and release provisions and each received a lump sum cash payment calculated in accordance with the Severance Plan of $4,500,000 and $5,250,000 respectively.
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As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of RegulationS-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Mr.our Co-Chief Executive Officers, Messrs. Hastings our 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 Executive Compensation table,Table, the 20192021 annual total compensation as determined under Item 402 of RegulationS-K was $40,823,725 for our CEO was $38,577,129.Mr. Hastings and $38,232,164 for Mr. Sarandos. The 20192021 annual total compensation
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as determined under Item 402 of RegulationS-K for our median employee was $202,931.$201,743. Based on the foregoing, our estimate of the ratio of our CEO’sCo-Chief Executive Officers’ annual total compensation to our median employee’s annual total compensation for fiscal year 20192021 is 202 to 1, in the case of Mr. Hastings, and 190 to 1.1, 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 we used were as follows:
We determined that, as ofselected December 31, 2019, our global employee population consisted2021, which is within the last three months of 8,628 employees, which excludes workers employed through unaffiliated third parties for2021, as the date upon which we do not set compensation.would identify the “median employee.” We also used December 31 as our measuring date in 2020. Consistent with the Summary Compensation Table, we examined total annual compensation for all employees (excluding Messrs. Hastings and Sarandos), which included: base salary, 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 2019.
We selected December 31, 2019, which is within the last three months of 2019, as the date upon which we would identify the “median employee”. We also used December 31 as our measuring date in 2018.
Consistent with the Summary Executive Compensation table, we examined total annual compensation for all employees, which included: base salary, incentive compensation plan payments, option awards consisting of stock options, and other compensation such as 401(k) matching contributions.
2021. For employees outside the United States, we converted their compensation to U.S. dollars using the applicable average exchange rate for 2019.2021.
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Reason for the Proposal
We are asking stockholders to approve the Netflix, Inc. 2020 Stock Plan (the “2020 Plan”), which was adopted, subject to stockholder approval, by the Board on March 4, 2020 (the “Board Approval Date”).
The Company currently maintains the Netflix, Inc. 2011 Stock Plan (the “2011 Plan”). As of April 8, 2020, a total of 18,796,456 shares of Netflix common stock (“Shares”) were then subject to outstanding awards granted under the 2011 Plan, and an additional 5,343,099 Shares were then available for new grants under the 2011 Plan. The Board and management believe that the 2011 Plan should be updated to align with current compensation and benefits best practices. Moreover, it is difficult to precisely estimate when the shares under the 2011 Plan will be exhausted, since the number of shares granted under our program is dependent on our stock price, employee population and the participation of employees in allocating compensation to stock options.
The purpose of the 2020 Plan is to help the Company attract and retain the best available employees, consultants and directors and to incentivize such individuals to promote the Company’s success. The Board and management believe that being able to offer equity awards as one element of our total compensation serves as an effective vehicle for aligning stockholder interest with employees’ interests. Our three-year average dilution rate of just 0.55%—extremely low compared to S&P 500 Media and Entertainment companies—has ensured that our equity offering has had limited impact on our existing shareholders. As such, the Board and management believe that the approval of the 2020 Plan is in the best interest of stockholders and important to the future success of the Company.
If stockholders approve the 2020 Plan, no new awards will be granted under the 2011 Plan after the
Annual Meeting. In that case, (1) 17,500,000 new Shares will become available for award grants under the 2020 Plan; (2) the number of Shares that remained available for award grants under the 2011 Plan as of 12:01 a.m. Pacific Time on the Board Approval Date (such time, the “Effective Time”) will become available
for award grants under the 2020 Plan, and (3) any Shares subject to awards under the 2011 Plan that are outstanding as of the Effective Time that, after the Effective Time, expire, become unexercisable, or are forfeited or repurchased by the Company without having become vested will also become available for grant under the 2020 Plan (such Shares in this prong (3), the “Returning Shares”). In sum, if stockholders approve the 2020 Plan, the 2020 Plan will be the successor to the 2011 Plan, provided that the termination of our grant authority under the 2011 Plan will not affect awards then outstanding thereunder.
If stockholders do not approve the 2020 Plan, the Company will continue to have the authority to grant awards under the 2011 Plan.
Based solely on the closing price of the Company’s common stock, as reported on the Nasdaq Stock Market on April 8, 2020, which was $371.12 per Share, the maximum aggregate market value of the 17,500,000 new Shares that could be issued under the 2020 Plan is $6,494,600,000.
Key Features of the 2020 Plan
The 2020 Plan, as approved by the Board, has several key differences from the 2011 Plan, which are intended to reflect current compensation and governance best practices, including:
Limitations on Shares Available for Awards. No more than 41,724,628 Shares may be issued under the 2020 Plan, which is the sum of 17,500,000 new Shares, plus the number of Shares available under the 2011 Plan for additional award grant purposes as of the Effective Time, plus the aggregate number of Shares subject to outstanding awards under the 2011 Plan as of the Effective Time to account for the maximum potential amount of Returning Shares. Shares granted under the 2020 Plan may be either authorized but unissued Shares or treasury Shares. The 2020 Plan also contains limitations on the number of Shares that may be issued to a participant during any fiscal year by award type. The Board expects that the number of Shares available, if approved by the stockholders,
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The 2020 Plan also retains the 2011 Plan’s disciplined equity compensation practices, such as:
2020 PROXY STATEMENT 73
Additional Information Regarding Share Increase
Compared with the 2011 Plan, the 2020 Plan would increase the number of Shares reserved for issuance by 17,500,000 new Shares, which would help ensure that a sufficient reserve of Shares remains available for issuance to allow the Company to use equity incentives to attract, retain and motivate key employees, consultants and directors, who are essential to the Company’s long-term growth and financial success. The Company relies on equity incentives in the form of stock options, and the Board, the Committee and management believe that these equity incentives are necessary for the Company to maintain a competitive equity compensation program. The 2011 Plan was designed to be effective for a maximum term of 10 years, with the intent of having the equity incentive share reserve replenished thereafter. It is difficult to precisely estimate when the shares under the 2011 Plan will be exhausted, since the number of shares granted under our program is dependent on our stock price, employee population and the participation of employees in allocating compensation to stock options. Given the importance of offering competitive equity compensation to our employees, directors and other service providers, the Company proposes that no more than 41,724,628 Shares may be issued under the 2020 Plan, which is the sum of the 17,500,000 new Shares, plus the number of Shares available under the 2011 Plan for additional award grant purposes as of the Effective Time, plus the aggregate number of Shares subject to outstanding awards under the 2011 Plan as of the Effective Time to account for the maximum potential amount of Returning Shares.
In determining the number of Shares to reserve under the 2020 Plan, management and the Committee, in consultation with an independent compensation consultant, evaluated share usage, dilution, overhang, burn rate, and the existing terms of outstanding equity awards, as discussed further in the “Share Usage, Dilution, Burn Rate, and Overhang” section below. The Board, the Committee and management believe the increased dilution resulting from the approval of the 2020 Plan remains consistent with stockholder interests, in particular since our three-year average dilution rate of 0.55% is extremely low as compared to S&P 500 Media and Entertainment companies.
Incentive Equity Awards in Fiscal 2019
The Company grants stock options to more than 82% of all our employees annually. In fiscal 2019, we granted stock options covering 2,588,380 Shares under the 2011 Plan, of which awards for 466,961 Shares, or 18%, were granted to our named executive officers; awards for 23,431 Shares, or 1%, were granted to ournon-employee directors; and awards for 2,097,998 Shares, or 81%, were granted to our broad-based employee population. We did not grant any other form of equity awards or equity-based awards.
As of December 31, 2019, the total number of Shares underlying outstanding options under the 2011 Plan was 18,658,946. The outstanding options have exercise prices ranging from $7.79 to $398.18, and the aggregate intrinsic value of these options that were in the money on December 31, 2019 was $3,562,686,526. The outstanding options generally are vested on the date of grant, pursuant to the Company’s monthly option grant program. Vested stock options can be exercised up to ten years following grant regardless of employment status. The 2020 Plan was adopted on the Board Approval Date and no awards were granted thereunder prior to the Annual Meeting.
Equity Grants in Fiscal 2020
Pursuant to past practice, on the first trading date of each month in fiscal 2020, the Company granted vested options to our named executive officers. For such options, the weighted average exercise price
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was $357.85 and the weighted average remaining contractual life was 9.86 years. Immediately following the April 2020 grant, 5,343,099 Shares remained available for issuance as incentive awards under the 2011 Plan and our overhang was 5.91%. We calculated overhang based on the number of shares subject to equity awards outstanding but not exercised, plus number of shares available to be granted, divided by total common shares outstanding as of April 1, 2020. Overhang is also described in greater detail below.
Share Usage, Dilution, Burn Rate, and Overhang
Upon adoption by stockholders at the Annual Meeting, the 2020 Plan will authorize no more than 41,724,628 Shares for issuance under the 2020 Plan, which is the sum of the 17,500,000 new Shares, plus the number of
Shares available under the 2011 Plan for additional award grant purposes as of the Effective Time, plus the aggregate number of Shares subject to outstanding awards under the 2011 Plan as of the Effective Time to account for the maximum potential amount of Returning Shares. Incentive awards under the 2020 Plan may be in the form of stock options, stock appreciation rights, restricted stock, restricted stock units, or dividend equivalents. The number of Shares available for awards under the 2020 Plan will be increased in an amount equal to awards that are forfeited, repurchased or terminated without issuance of Shares. Adjustments will be made in the aggregate number of Shares that may be issued under the 2020 Plan in the event of a change affecting Shares, such as a stock dividend or split, recapitalization, reorganization, or merger.
Equity Plan Share Reservation Summary Table1
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In determining the number of shares to reserve under the 2020 Plan, management and the Committee evaluated the 2011 Plan’s historic dilution rate, burn rate, and overhang. This helps the Company ensure that it is continuing to take a disciplined approach to equity compensation.
The 17,500,000 new Shares represents 3.99% of our total common shares outstanding as of December 31, 2019. There were 438,806,649 Shares outstanding as of December 31, 2019. Dilution is the total number
of shares subject to equity awards granted (less cancellations) divided by the total common shares outstanding at the end of the year. The average annual dilution over the last three fiscal years was 0.55%. Several factors contribute to our low dilution rate. In particular, our high market capitalization relative to our number of employees allows for competitive compensation to be delivered to employees at a relatively low cost to shareholders.
2020 PROXY STATEMENT 75
Additionally, our employees generally make an election regarding how their compensation is allocated between cash and equity compensation, which generally leads to higher salaries and lower equity compensation spending, relative to our peers.
Burn rate is another measure of dilution that shows how rapidly a company is depleting its shares reserved for equity compensation plans, and differs from annual dilution because it does not take into account cancellations. Our annual burn rate over the last three fiscal years has averaged 0.55%, which falls below the ISS 20203-year gross burn rate guideline for S&P 500 Media & Entertainment companies, which is 3.50%. Our method for calculating burn rate is generally aligned with ISS’s method and any differences for Netflix are negligible. Our burn rate is nearly identical to our dilution rate because the Company has so few cancellations, due to our
practice of granting fully vested options and our strong share price performance.
An additional metric that we use to measure the cumulative impact of the 2011 Plan is overhang (number of shares subject to equity awards outstanding but not exercised, plus number of shares available to be granted, divided by total common shares outstanding at the end of the year). For each of the last three fiscal years, our overhang has averaged 6.77%. If the 2020 Plan is approved with 17,500,000 new Shares, our overhang would increase to 10.13%.
We calculate dilution, burn rate and overhang based upon total common shares outstanding at the end of the fiscal year. Taking into account the Company’s equity grant practices and the foregoing information, the Company believes that the additional share authorization requested is appropriate.
Equity Compensation Plan Key Metrics Summary Table
| Fiscal 2019 (%) | Fiscal 2018 (%) | Fiscal 2017 (%) | Three Year Average (Fiscal 2017-2019) (%) | |||||||||||||
Percentage of Equity-Based Awards Granted | 18 | 20 | 24 | 21 | ||||||||||||
Dilution | 0.59 | 0.47 | 0.59 | 0.55 | ||||||||||||
Burn Rate | 0.59 | 0.47 | 0.59 | 0.55 | ||||||||||||
Overhang | 6.15 | 6.68 | 7.47 | 6.77 | ||||||||||||
New Plan Benefits and Plan Participation
Our executive officers andnon-employee directors have an interest in this proposal because they are eligible to receive discretionary awards under the 2020 Plan.
All benefits or amounts that will be awarded or paid under the 2020 Plan cannot currently be determined. Awards granted under the 2020 Plan are within the discretion of the Committee, and the Committee has not determined all future awards or who might receive them. The 2020 Plan does not have set benefits or amounts, and no grants or awards have been made by the Board or the Committee to date under the 2020 Plan subject to stockholder approval.
Under our current monthly option grant program, we generally permit salaried employees to elect to receive monthly grants of fully vested stock options instead of cash compensation. The Company expects to continue to make grants under the Company’s monthly option grant program, under which certain employees receive, on the first trading day of the month, fully vested options granted at fair market value as reflected by the closing price on the day of the option grant. The actual number of options granted to employees each month in 2019 was determined based on 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). The total annual
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stock option allocation is comprised of a minimum of stock option allowance (generally based on upon 5% of a salaried employee’s allocatable compensation), and certain employees are permitted to make a supplemental allocation to their total annual stock option allocation from their cash compensation.
Awards granted in fiscal year 2019 under the 2011 Plan would not have changed if the 2020 Plan had
been in effect instead of the 2011 Plan, provided that the Board or a Committee may adjust, eliminate or otherwise modify the Company’s option granting
practices and option allowances, including, without limitation, the monthly option formula that underlies our monthly option grant program. The following table sets forth information with respect to the grant of options and other awards under our 2011 Plan to the executive officers named in this proxy statement’s Summary Executive Compensation table who are current executive officers, to all current executive officers as a group, to allnon-employee directors as a group, to several other classes of individuals, and to all other employees as a group during the Company’s last fiscal year:
Name and Position | Number of Units Underlying Options1 | Weighted Average Share ($) | ||||||
Reed Hastings Chief Executive Officer, President, Chairman of the Board | 238,931 | 320.44 | ||||||
Spencer Neumann Chief Financial Officer | 33,406 | 325.14 | ||||||
Ted Sarandos Chief Content Officer | 106,027 | 319.79 | ||||||
Greg Peters Chief Product Officer | 52,956 | 320.23 | ||||||
David Hyman Chief Legal Officer | 29,623 | 320.87 | ||||||
David Wells Former Chief Financial Officer | 1,907 | 267.66 | ||||||
Kelly Bennett Former Chief Marketing Officer | 4,111 | 339.47 | ||||||
All current executive officers as a group | 468,038 | 320.66 | ||||||
Allnon-employee directors as a group | 23,431 | 320.08 | ||||||
Each nominee for election as a director | 243,617 | 320.43 | ||||||
Each associate of any such directors, executive officers or nominees | — | — | ||||||
Each other person who received or is to receive 5 percent of such | — | — | ||||||
All employees, other than executive officers, as a group | 2,096,911 | 320.67 | ||||||
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Equity Compensation Plan Information
The following table summarizes the Company’s equity compensation plans as of December 31, 2019. There were no equity compensation plans or arrangements not approved by security holders.
Plan Category | Number of (a) | Weighted-Average (b) ($) | Number of Securities Reflected in Column (a)) | |||||||||
Equity compensation plans or arrangements approved | ||||||||||||
2011 Plan | 18,658,946 | 136.55 | 6,111,561 | |||||||||
2002 Plan1 | 2,200,380 | 20.29 | — | |||||||||
Equity compensation plans not approved by security holders | — | — | — | |||||||||
Total | 20,859,326 | 2 | 124.28 | 6,111,561 | ||||||||
The Board unanimously recommends that the stockholders vote “FOR” approval of the 2020 Plan.
Description of the 2020 Plan
The following is a summary of the principal features of the 2020 Plan, as approved by the Board on March 4, 2020, subject to stockholder approval. This summary is not a complete description of all of the provisions of the 2020 Plan, and is qualified in its entirety by the specific language of the 2020 Plan. A copy of the 2020 Plan is provided as Appendix A to this Proxy Statement.
Background and Purpose of the 2020 Plan
The 2020 Plan permits the grant of the following types of incentive awards: (1) stock options, (2) stock appreciation rights, (3) restricted stock, (4) restricted stock units, and (5) dividend equivalents (individually, an “Award”). The 2020 Plan is intended to attract and retain (1) employees of the Company and its subsidiaries, (2) consultants who provide significant services to the Company and its subsidiaries, and (3) directors of the Company who are not employees of the Company or any subsidiary. The 2020 Plan is also intended to encourage stock ownership by such
employees, directors, and consultants, thereby aligning their interests with those of the Company’s stockholders. As defined in the 2020 Plan and used in the description below, “Shares” refers to shares of Netflix’s common stock.
Administration of the 2020 Plan
The 2020 Plan is administered by one or more Committees appointed by the Board. The Compensation Committee of the Board (the “Compensation Committee”) and any Authorized Officers (defined below) are Committees under the 2020 Plan and have certain delegated authority to administer the 2020 Plan and currently are expected to do so throughout the life of the 2020 Plan. The Compensation Committee must consist of at least two directors who qualify as“non-employee directors” under Rule16b-3 of the Securities Exchange Act of 1934, and as “outside directors” under Section 162(m) of the Code (“Section 162(m)”). The Board delegated authority to administer the 2020 Plan and to designate employees to receive Shares
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under and pursuant to the terms of the 2020 Plan to the Chief Executive Officer, the Chief Financial Officer, the Chief Talent Officer, the General Counsel, the Secretary, the Assistant Secretary, and Allison Wright (Vice President in the Company’s Talent organization) during her employment with the Company (each, an “Authorized Officer”); provided that only the Board or the Compensation Committee may award options to any Authorized Officer or any officer subject to the reporting obligations of Section 16(a) of the Securities Exchange Act of 1934, as amended.
Subject to the terms of the 2020 Plan, the Administrator (which consists of the Board or any of its Committees) has the discretion to select the employees, consultants, and directors who will receive Awards, determine the terms and conditions of Awards, and interpret the provisions of the 2020 Plan and outstanding Awards; subject to limitations on any authority delegated by the Board to any Committee. The Administrator may not delegate its authority and powers with respect to Awards intended to continue to qualify as performance-based compensation under Section 162(m) if the delegation would cause the Awards to fail to so qualify.
Number of Shares of Common Stock Available Under the 2020 Plan
No more than 41,724,628 Shares may be issued under the 2020 Plan, which is the sum of the 17,500,000 new Shares, plus the number of Shares available under the 2011 Plan for additional award grant purposes as of the Effective Time, plus the aggregate number of Shares subject to outstanding awards under the 2011 Plan as of the Effective Time to account for the maximum potential amount of Returning Shares. As of April 8, 2020, no Awards have been granted under the 2020 Plan. Shares granted under the 2020 Plan may be either authorized but unissued Shares or treasury Shares. As of April 8, 2020, the closing price of our common stock on NASDAQ was $371.12 per Share.
The maximum number of Shares reserved for issuance under the 2020 Plan will be reduced by 2.39 Shares for every one (1) restricted stock unit or share
of restricted stock (referred to as a “full value award”) granted. If an Award is settled in cash, cancelled, terminates, expires, or lapses for any reason without having been fully exercised or vested, the unvested or cancelled Shares generally will be returned to the available pool of Shares reserved for issuance under the 2020 Plan in the same proportion. For example, for every full value award share that is cancelled, terminated, expired or lapsed, 2.39 Shares will return to the available pool, and for every stock option that is cancelled, terminated, expired or lapsed, one (1) Share will return to the available pool.
If an Award expires or becomes unexercisable without having been exercised in full, or, with respect to full value awards, is forfeited to or repurchased by the Company, the unpurchased (or forfeited or repurchased, as applicable) Shares that were subject to the Award will become available for future grant or sale under the 2020 Plan. Shares used to pay the exercise or purchase price of an Award and/or to satisfy the tax withholding obligations related to an Award will not become available for future grant or sale under the 2020 Plan. Upon exercise of a stock appreciation right settled in Shares, the gross number of Shares covered by the portion of the Award that is exercised will cease to be available under the 2020 Plan. Shares that actually have been issued under the 2020 Plan under any Award will not be returned to or become available for future distribution under the 2020 Plan, excluding unvested Shares of any full value awards that are repurchased by the Company or are forfeited to the Company. To the extent an Award is paid out in cash rather than Shares, such cash payments will not reduce the number of Shares available for issuance under the 2020 Plan. Shares actually issued pursuant to Awards transferred under any exchange program to reprice options or stock appreciation rights will not become available for grant under the 2020 Plan.
If the Company experiences a stock dividend, reorganization, or other change in capital structure, the Committee will, in such manner as it determines is equitable, adjust the number and class of Shares available for issuance under the 2020 Plan, the outstanding Awards, and theper-person limits on
2020 PROXY STATEMENT 79
Awards, as appropriate to reflect the stock dividend or other change.
Eligibility to Receive Awards
The Committee selects the employees, consultants, and directors who will be granted Awards under the 2020 Plan on the basis of their service to the Company and its subsidiaries. The actual number of individuals who will receive Awards cannot be determined in advance because the Committee has the discretion to select the participants. As of April 8, 2020, approximately 8,382 of our employees, 11 directors and 1,866 consultants would be eligible to participate in the 2020 Plan.
No Repricing
No exchange programs to reprice options or stock appreciation rights are permitted under the 2020 Plan without the approval of our stockholders.
Stock Options
A stock option is the right to acquire Shares at a fixed exercise price for a fixed period of time. Under the 2020 Plan, the Committee may grant nonqualified stock options to employees, consultants and directors and/or incentive stock options to employees (which entitle employees, but not the Company, to more favorable tax treatment). The Committee will determine the number of Shares covered by each option, but during any fiscal year of the Company, no participant may be granted options (and/or stock appreciation rights) covering more than 5,000,000 Shares.
The exercise price of the Shares subject to each option is set by the Committee but cannot be less than 100% of the fair market value (on the date of grant) of the Shares covered by the option. An exception may be made for any options that the Committee grants in substitution for options held by employees of companies that the Company acquires (in which case the exercise price preserves the economic value of the employee’s cancelled option from his or her former employer). In addition, the exercise price of an incentive stock option must be at least 110% of fair market value if (on the grant date)
the participant owns stock possessing more than 10% of the total combined voting power of all classes of stock of Netflix or any of its subsidiaries. The aggregate fair market value of the Shares (determined on the grant date) covered by incentive stock options which first become exercisable by any participant during any calendar year also may not exceed $100,000. The exercise price of each option must be paid in full in cash (or cash equivalent) at the time of exercise. The Committee also may permit payment through the tender of Shares that are already owned by the participant, or by any other means that the Committee determines to be consistent with the purpose of the 2020 Plan.
Options become exercisable at the times and on the terms established by the Committee. The Committee also establishes the time at which options expire, but the expiration may not be later than 10 years after the grant date for incentive stock options. In addition, a participant who owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any of its subsidiaries may not be granted an incentive stock option that is exercisable after five years from the option’s grant date.
Stock Appreciation Rights
Stock appreciation rights (“SARs”) are awards that grant the participant the right to receive an amount (in the form of cash, Shares of equal value, or a combination thereof, as determined by the Committee) equal to (1) the number of Shares exercised, times (2) the amount by which the Company’s stock price exceeds the exercise price. The exercise price is set by the Committee but cannot be less than 100% of the fair market value of the covered Shares on the grant date. A SAR may be exercised only if it becomes vested based on the vesting schedule established by the Committee. SARs expire under the same rules that apply to incentive stock options, meaning that the expiration may not be later than 10 years after the grant date. SARs also are subject to the sameper-person limits (5,000,000 covered Shares for SARs and/or options in any fiscal year).
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Restricted Stock
Awards of restricted stock are Shares that vest in accordance with the terms and conditions established by the Committee. The Committee determines the number of Shares of restricted stock granted to any participant, but during any fiscal year of the Company, no participant may be granted more than 5,000,000 Shares of restricted stock (and/or restricted stock units).
In determining whether an Award of restricted stock should be made, and/or the period of restriction for any such Award, the Committee may impose whatever conditions it determines to be appropriate.
A holder of restricted stock will have full voting rights, unless determined otherwise by the Committee. A holder of restricted stock also generally will be entitled to receive all dividends and other distributions paid with respect to Shares; provided, however, that such dividends and other distribution amounts may be accrued but not paid to such holder until all conditions or restrictions relating to the Shares underlying the restricted stock have been satisfied or lapsed, and will otherwise be forfeited.
Restricted Stock Units
Restricted stock units represent a right to receive Shares at a future date determined in accordance with the participant’s award agreement. No monetary payment is required for receipt of restricted stock units or the Shares issued in settlement of the Award, the consideration for which is furnished in the form of the participant’s service to the Company. In determining whether an Award of restricted stock units should be made, and/or the vesting schedule for any such Award, the Committee may impose whatever conditions to vesting it determines to be appropriate. The Company may settle the restricted stock units in cash, in Shares or in a combination of both.
The initial value of each restricted stock unit on the date of grant will be equal to the fair market value of a Share on such date. Grants of restricted stock units are subject to the sameper-person limits as restricted stock (5,000,000 restricted stock units and/or Shares of restricted stock in any fiscal year).
Dividend Equivalents
The Committee may provide that awards under the 2020 Plan (other than options or stock appreciation rights) earn dividends or dividend equivalents based on the amount of cash dividends paid by the Company to holders of Shares, provided that such dividend and dividend equivalent and other distribution amounts or consideration with respect to
any Share underlying an Award may not paid to a participant until all conditions or restrictions relating to such Share have been satisfied or lapsed and shall otherwise be forfeited. Dividend equivalents may be settled in cash, Shares, other securities, other Awards, or property as determined in the Committee’s discretion.
Performance Goals
The Committee (in its discretion) may make performance goals applicable to a participant with respect to an Award, including, but not limited to, the following measures, which are defined in the 2020 Plan:
Any performance criteria used under the 2020 Plan may be measured, as applicable (1) in absolute terms, (2) in combination with more than one performance goal, (3) in relative terms (including, but not limited to, as compared to results for other periods of time, and/or against another company or companies), (4) on aper-share orper-capita basis, (5) against the performance of the Company as a whole or a business unit or units of the Company, and/or (6) on apre-tax orafter-tax basis. Further, any performance goals may be used to measure the performance of the Company as a whole or of a business unit or other segment of the Company, or of one or more product lines or specific markets, and may be measured relative to a peer group or index. Pursuant to the terms of the 2020 Plan, the Committee may determine whether any element(s) or item(s) will be
2020 PROXY STATEMENT 81
included in or excluded from the calculation of any performance goal with respect to any participants.
The 2020 Plan contains individual award limitations and performance goals to allow certain performance-based awards granted prior to November 2, 2017 to preserve their grandfathered treatment under the Tax Cuts and Jobs Act of 2017 (the “Grandfathered Awards”), to the extent applicable.
Change in Control Treatment
In the event of a Change in Control (as defined in the 2020 Plan), awards then-outstanding under the 2020 Plan will not automatically become fully vested so long as such awards are assumed or substituted in accordance with the 2020 Plan. If such outstanding awards are not so assumed or substituted, effective immediately prior to such Change in Control but conditioned upon completion of such Change in Control, the following will occur with respect to such outstanding awards:
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Clawback
If the Committee or its delegates determines in its discretion that a participant engaged in “Misconduct” (as defined in the 2020 Plan, and which generally relates to contributing to or failing to take reasonable steps to prevent an accounting restatement due to material noncompliance with financial reporting requirements), the Committee may, in its discretion, determine that the participant will not vest or otherwise earn performance-based awards, and the participant will have no rights or entitlements whatsoever to performance-based awards thereafter, provided that such performance-based awards were granted, vested, or otherwise earned during theone-year period preceding the date on which the Company disclosed on Form8-K or in other publicly-filed disclosure that it is required to restate its financial statements. The Committee or its delegates expressly reserve all rights and remedies with respect to treatment of any such performance-based awards, including, without limitation, withholding or rescinding them or demanding repayment for any cash proceeds that may have been distributed to a participant with respect to them. No officer, director or employee may participate in any decision regarding the determination of Misconduct with respect to his or her own awards.
Limited Transferability of Awards
Awards granted under the 2020 Plan generally may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the applicable laws of descent and distribution. Notwithstanding the foregoing, the Committee may permit an individual to transfer an Award to an individual or entity. Any transfer will be
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made in accordance with procedures established by the Committee.
Amendment and Termination of the 2020 Plan
The Board generally may amend or terminate the 2020 Plan at any time and for any reason. However, no amendment, suspension, or termination may impair the rights of any participant without his or her consent. Additionally, the Company will obtain stockholder approval of any 2020 Plan amendment to the extent necessary and desirable to comply with applicable law.
Summary of U.S. Federal Income Tax Consequences
The following paragraphs are a summary of the general federal income tax consequences to U.S. taxpayers and the Company of equity awards granted under the 2020 Plan. Tax consequences for any particular individual may be different. As the rules governing the tax treatment of such awards are quite technical, the following discussion of tax consequences is necessarily general in nature and does not purport to be complete. In addition, statutory provisions and their interpretations are subject to change, and their application may vary in individual circumstances. This discussion does not address the tax consequences under applicable state and local law.
Nonqualified Stock Options. No taxable income is reportable when a nonqualified stock option with an exercise price equal to the fair market value of the underlying stock on the date of grant is granted to a participant. Upon exercise, the participant will recognize ordinary income in an amount equal to the excess of the fair market value (on the exercise date) of the shares purchased over the exercise price of the option. Any taxable income recognized in connection with an option exercise by an employee of the Company is subject to tax withholding by the Company. Any additional gain or loss recognized upon any later disposition of the shares would be capital gain or loss.
Incentive Stock Options. No taxable income is reportable when an incentive stock option is granted
or exercised (except for purposes of the alternative minimum tax, in which case taxation is the same as for nonqualified stock options). If the participant exercises the option and then later sells or otherwise disposes of the shares more than two years after the grant date and more than one year after the exercise date, the difference between the sale price and the exercise price will be taxed as capital gain or loss. If the participant exercises the option and then later sells or otherwise disposes of the shares before the end of thetwo- orone-year holding periods described above, he or she generally will have ordinary income at the time of the sale equal to the fair market value of the shares on the exercise date (or the sale price, if less) minus the exercise price of the option.
Stock Appreciation Rights. No taxable income is reportable when a stock appreciation right with an exercise price equal to the fair market value of the underlying stock on the date of grant is granted to a participant. Upon exercise, the participant will recognize ordinary income in an amount equal to the amount of cash received and the fair market value of any shares received. Any additional gain or loss recognized upon any later disposition of the shares would be capital gain or loss.
Restricted Stock. Unless a participant who receives an award of restricted stock makes an election under Section 83(b) of the Code (“Section 83(b)”) as described below, the participant generally is not required to recognize ordinary income upon the grant of restricted stock. Instead, on the date the restrictions lapse and the shares vest (that is, become transferable and no longer subject to a substantial risk of forfeiture), the participant will be required to recognize ordinary income in an amount equal to the excess, if any, of the fair market value of the shares on that date over the amount, if any, paid for those shares.
If a participant makes a Section 83(b) election to recognize ordinary income on the date the restricted shares are granted, the amount of ordinary income required to be recognized is an amount equal to the excess, if any, of the fair market value of the shares on the date of grant over the amount, if any, paid for
2020 PROXY STATEMENT 83
those shares. In that case, the participant will not be required to recognize additional ordinary income when the restrictions lapse and the shares vest.
Restricted Stock Units. A participant generally is not required to recognize income upon the grant of a restricted stock unit. In general, on the date the restricted stock units settle, the participant will be required to recognize ordinary income in an amount equal to the fair market value of the restricted stock units as of the settlement date. In addition, Federal Insurance Contributions Act (“FICA”) taxes are imposed in the year of vesting (which may occur prior to the year of settlement).
Dividend Equivalents. Dividend equivalents are generally taxable as ordinary income when received by the participant.
General Tax Effect for the Company. The Company generally will be entitled to a tax deduction in connection with an Award under the 2020 Plan in an amount equal to the ordinary income realized by a participant and at the time the participant recognizes such income (for example, upon the exercise of a nonqualified stock option). Moreover, if a participant recognizes ordinary income due to a disqualifying disposition of an incentive stock option, the Company would generally be entitled to a deduction in the same amount.
Performance-Based Compensation. In general, Section 162(m) denies a publicly held company a federal income tax deduction for compensation in excess of $1,000,000 per year per person paid to certain of its executive officers subject to certain exceptions. “Performance-based” compensation is not subject to the $1,000,000 deduction limit for Grandfathered Awards.
Parachute Payments. The vesting of any portion of an Award that is accelerated due to the occurrence of a change in control (such as a sale event) may cause a portion of the payments with respect to such accelerated Awards to be treated as “parachute payments” as defined in the Code. Any such parachute payments may not be deductible by us, in whole or in part, and may subject the recipient to a
non-deductible 20% federal excise tax on all or a portion of such payment (in addition to other taxes ordinarily payable).
Section 409A. Section 409A of the Code (“Section 409A”) provides certain requirements fornon-qualified deferred compensation arrangements with respect to an individual’s deferral and distribution elections and permissible distribution events. Awards granted under the 2020 Plan with a deferral feature will be subject to the requirements of Section 409A. If an award is subject to and fails to satisfy the requirements of Section 409A, the recipient of that award may recognize ordinary income on the amounts deferred under the award, to the extent vested, which may be prior to when the compensation is actually or constructively received. Also, if an award that is subject to Section 409A fails to comply with Section 409A’s provisions, Section 409A imposes an additional 20% federal income tax on compensation recognized as ordinary income, as well as interest on such deferred compensation. Participants are solely responsible for the payment of any taxes and penalties incurred under Section 409A.
Registration with the SEC
We intend to file with the U.S. Securities and Exchange Commission a registration statement on FormS-8 covering the Shares reserved for issuance under the 2020 Plan.
Summary
We believe strongly that the approval of the 2020 Plan is important to our continued success. Awards such as those provided under the 2020 Plan constitute an important incentive and help us attract and retain high performing individuals.
Required Vote
In order to be adopted, the 2020 Plan must be approved by the affirmative vote of a majority of the votes cast by holders of record of the Company’s common stock. Stockholders may direct that their votes be cast for or against the proposal, or stockholders may abstain from this proposal.
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Abstentions will have the same effect as votes cast against the proposal. Broker shares that are not voted on this proposal are not considered votes cast. If stockholders do not approve the 2020 Plan, the Company will have no equity incentive plan under
which it may grant future equity awards upon the expiration of the 2011 Plan.
The Board unanimously recommends that the stockholders voteFOR approval of the 2020 Plan.
2020 PROXY STATEMENT 85
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, Shareholders of Netflix Inc. (“Netflix” or “Company”) hereby request that the 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 andnon-monetary contributions and expenditures (direct and indirect) used in the manner described in section 1 above, including:
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 of Netflix, 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, “Disclosure 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.”
However, relying on publicly available data does not provide a complete picture of the Company’s electoral spending. For example, the Company’s payments to trade associations that may be used for election-related activities are undisclosed and unknown. This proposal asks the Company to disclose all of its electoral spending, including payments to trade associations and othertax-exempt organizations, which may be used for electoral purposes. This would bring our Company in line with a growing number of leading companies, including Salesforce.com Inc., Microsoft Corp., and Electronic Arts, Inc., which present this information on their websites.
Proposals on this topic at Alliant Energy and Cognizant Technology Solutions passed last year, despite board opposition. 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.
Increase Long-Term Shareholder Value
Vote for Political Disclosures—Proposal 5
2020 PROXY STATEMENT 87
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 shareholder proposal is similar to a proposal presented last year and that failed to receive a majority of votes cast. Political contributions are already publicly disclosed. Indeed, 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 do not believe that the benefit of the requested report is outweighed by the resources required to prepare such a report.
As is noted in the supporting statement, the shareholder is also concerned that trade association or nonprofit payments could be used for electoral purposes, and thus seeks that additional information as part of the report. 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. Thus, the requested report could be misleading in this regard. It can also be difficult for us to assess exactly how our contributions to such organizations could be used, which would make it difficult to comply with 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 for political disclosures.
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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 2010 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 to 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.
CurrentlyOur current 67% supermajority vote requirement from all shares outstanding translates into a 1 %-minority can frustraterequired 89% vote from the will of our 66%-shareholder majority in an election with 67% of shares casting ballots. In other wordsthat cast ballots at the annual meeting. This is a 1 %-minority could have the powersubstantial barrier to prevent shareholders from improving the corporate 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 sayout-to-lunch in response to an overwhelming 66%-vote of shareholders.at Netflix.
This proposal topic won more than 80% support4-times5-times at Netflix since 2013:
2021 - 90%, 2019- 88%,2016-82% 2016- 82%, 2015-80% - 80%, 2013-81%
But our governanceIn contrast to the above 80%+ votes Netflix shareholders are voting against Netflix directors. These are the negative votes against Netflix directors in 2021:
| Richard Barton | A whooping [sic] 72% against | |
| Rodolphe Belmer | 43% against | |
| Bradford Smith | 58% against | |
| Anne Sweeney | 46% against |
49% of shares rejected management pay in 2021. Shareholders have the corresponding opportunity to vote against all members of the management pay committee has not yet put this proposal topic onstanding for election in 2022. Unfortunately Netflix management no longer identifies the ballot as a binding Netflix proposal. Shareholders were not happy and gave governancechairman of the management pay committee Chairman Jay Hoag a negative vote of 48% in 2018 while he was running unopposed. Richard Barton and Bradford Smith were also on the governance committee.annual meeting proxy.
Please vote yes:
Simple Majority Vote-Proposal 6Vote - Proposal 7
Netflix Opposing Statement
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Netflix Opposing Statement
This Proposal 7 requests a simple majority standard in connection with each voting requirement in the Company’s charter and bylaws. The Board has considered the stockholder proposal and for the reasons described below, believesconcluded that the proposalits adoption is unnecessary and would not be in the best interests of Netflix or its stockholders in light of the simple majority standard that we are instead asking stockholders to adopt in Proposal 3.
The Board recommends that the Company’s stockholders oppose this proposal and our stockholders.
Our businessinstead adopt the simple majority standard set out in Proposal 3, which we believe is in line with market practice and responsive to investor concerns requesting the elimination of standards that exceed a new and rapidly evolving competitive environment. Although our company has been around for more than 20simple majority vote.
Over the years, we operate in an extremely dynamic business environment. The media landscape around the globe is undergoing rapid change, much of which we have been pioneering. The competitive landscape in which we operate is also
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rapidly changing,engaged with many legacy media players now investing in business models that virtually copy ours. We expect to see significant shifts in market dynamics overof our stockholders who have indicated support for the coming years.
A simple majority vote requirement already applies to most corporate matters submitted to a voteelimination of the Company’s 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 shareholders to have a voice on issues where there is strong consensus.
This proposal has been presented for shareholders most recently in 2019 and received a majority of votes cast.voting provisions. The Board has weighed theconsidered these sentiments, along with stockholders’ prior voting results as part of a regular and ongoing examination of our governance structure. We are also aware that many shareholders, including ours, are supportive of a simple majority standard as part of a suite of best practice provisions.
Theon this issue in bringing Proposal 3. Having taken into account stockholder feedback from these conversations, the Board believes that the current governance structure, including oursimple majority provisions provided in Proposal 3 is responsive to stockholder views.
Proposal 3 would eliminate all supermajority standard, is appropriate for this pointvoting provisions set forth in the company’s evolution. ThereCompany’s charter and, contingent on its adoption and upon its effectiveness, the Company has committed to making certain conforming changes to its bylaws (which changes do not require stockholder approval) to eliminate supermajority voting requirements contained therein. Accordingly, the Board believes that this advisory and non-binding stockholder Proposal 7 is a desire to have some flexibility to implement our long-term plan. We seeunnecessary and confusing, as the supermajority
simple majority standard as critical to providing this needed flexibility. As importantly, this provision ensures that fundamental changes are broadly supported by shareholdersprovided in Proposal 3 adequately and we continue to believe that it is in the best interest of our company and our shareholders.appropriately addresses investor concerns.
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.7 and instead vote “FOR” Proposal 3.
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.
2020 PROXY STATEMENT 91
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stockholders vote “
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2022 Proxy Statement | 83 |
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.
Justin Danhof, 20 FBoston Common Asset Management, 200 State Street, NW, Suite 700, Washington, DC 20001,7th Floor, Boston, MA 02109, the beneficial owner of 11 sharesat least $25,000 of the Company’s common stock on the date the proposal was submitted, has notified the Company of hisits intent to present the following proposal at the Annual Meeting.
RESOLVEDWhereas: Shareholders, full disclosure of Netflix’s lobbying activities and expenditures to assess whether its lobbying is consistent with Netflix’s expressed goals and stockholder interests.
Resolved, stockholders request the preparation of a report, updated annually, disclosing:
1. Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications.
2. Payments by Netflix used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the amount of the payment and the recipient.
3. Netflix’s membership in and payments to any tax-exempt organization that writes and endorses model legislation.
4. Description of management’s and the Board’s decision-making process and oversight for making payments described in sections 2 and 3 above.
For purposes of this proposal, a “grassroots lobbying communication” is a communication directed to the general public that (a) refers to specific legislation or regulation, (b) reflects a view on the legislation or regulation and (c) encourages the recipient of the communication to take action with respect to the legislation or regulation. “Indirect lobbying” is lobbying engaged in by a trade association or other organization of which Netflix Inc. (“Netflix”) issueis a public report detailingmember.
Both “direct and indirect lobbying” and “grassroots lobbying communications” include efforts at the potential risks associated with omitting “viewpoint”local, state and “ideology” from its written equal employment opportunity (EEO) policy. federal levels.
The report shouldshall be available within a reasonable timeframe, prepared at a reasonable expensepresented to the Audit Committee and omit proprietary information.posted on Netflix’s website.
Supporting Statement
Netflix spent $8,805,000 from 2012 – 2020 on federal lobbying. This does not include state lobbying expenditures, where Netflix also lobbies but disclosure is uneven or absent. For example, Netflix spent $406,250 on lobbying in California from 2019 – 2020. Netflix lobbies abroad, spending between €700,000 – 799,999 on lobbying in Europe for 2020. According to press reports, Netflix has “focused more of its public policy strategy internationally, where most of its growth lies and where it faces tenacious regulators.”3
Netflix fails to disclose its memberships in or payments to trade associations and social welfare organizations or the amounts used for lobbying, including grassroots. Companies can give unlimited amounts to third party groups that spend millions on lobbying and undisclosed grassroots activity. These groups may be spending “at least double what’s publicly reported.”4 Netflix belongs to the Business Roundtable and Motion Picture Association of America, which together spent $20,260,000 on federal lobbying for 2020.
Netflix does not explicitly prohibit discrimination based on viewpoint or ideology in its written EEO policy.
Netflix’s lack of a company-wide best practice EEO policy sends mixed signals to company employees and prospective employees and calls into question the extent to which individuals are protected due to inconsistent state policies and the absence of federal protection for partisan activities. Approximately half of Americans live and work in a jurisdiction with no legal protections if their employer takes action against them for their political activities.
Companies with inclusive policies are better able to recruit the most talented employees from a broad labor pool, resolve complaints internally to avoid costly litigation or reputational damage, and minimize
employee turnover. Moreover, inclusive policies contribute to more efficient human capital management by eliminating the need to maintain different policies in different locations.
There is ample evidence that individuals with conservative viewpoints may face discrimination at Netflix.
Many big tech companies are hostile toright-of-center thought. Companies such as Facebook and Google routinely fire conservative employees when they speak their values. At the 2019 annual meeting of Apple shareholders, an audience member told company CEO Tim Cook about her close friend who works at Apple and lives in fear of retribution every single day because she happens to be a conservative. Companies such as Amazon and Alphabet work with the Southern Poverty Law Center (“SPLC”). The SPLC regularly smears Christian and conservative organizations by labelling them as “hate” groups on par with the KKK. Netflix has also worked to diminish religious liberty in the United States.
Netflix leadership also lacks a diversity of ideological viewpoint. This signals to employees that viewpoint discrimination is condoned if not encouraged.
Presently shareholders are unable to evaluate how Netflix prevents discrimination towards employees based on their ideology or viewpoint, mitigates employee concerns of potential discrimination, and ensures a respectful and supportive work atmosphere that bolsters employee performance.
Without an inclusive EEO policy, Netflix may be sacrificing competitive advantages relative to peers while simultaneously increasing company and shareholder exposure to reputational and financial risks.
We recommend that the report evaluate risks including, but not limited to, negative effects on
employee hiring and retention, as well as litigation risks from conflicting state and company anti-discrimination policies.
| 3 | https://www.hollywoodreporter.com/tv/tv-news/netflix-lobbying-machine-inside-effort-sway-policy-worldwide-1229622/ |
| 4 | https://theintercept.com/2019/08/06/business-group-spending-on-lobbying-in-washington-is-at-least-double-whats-publiclyreported/. |
2020 PROXY STATEMENT 93
2022 Proxy Statement | 85 |
We are concerned Netflix’s lack of disclosure presents reputational risks when its lobbying contradicts company public positions. For example, Netflix has drawn attention for supporting voting rights, yet opposing investor proposals for political spending disclosure.5 And while Netflix has attracted scrutiny for avoiding federal income taxes,6 the Business Roundtable has been lobbying against raising corporate taxes to fund health care, education and safety net programs.7
We urge Netflix to expand its lobbying disclosure.
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 proponent’s supporting statement contains a number of factual inaccuracies and unsupported conclusory statements. For instance, he claimsBoard believes that “There is ample evidence that individuals with conservative viewpoints may face discrimination at Netflix.” Despite his claim of “ample evidence,” he cites none at all.
The evidence is to the contrary. Netflix cares deeply about diversity and “Inclusion” is one of our core cultural values discussed in our Culture memo. Diversity and inclusion are also specifically highlighted in our “Commitment to Respect Policy.” We employ a Vice President for Inclusion Strategy who is tasked with leading our efforts to devise and implement strategies that integrate cultural diversity, inclusion and equality into all aspects of Netflix’s operations worldwide. Diversity and Inclusion are subjects that garner much focus in our workplace.
Our approach is explained on our Inclusion and Diversity webpage. To facilitate our growth and connect with our diverse, global member base, Netflix recognizes the importance of having the most talented employees, with diverse backgrounds, cultures, perspectives, and experiences to support our innovation and creativity. We expect our employees to effectively collaborate with people of diverse backgrounds and cultures, and to embrace differing perspectives as those result in better decisions.
Beyond having a diverse team, Netflix understands that genuine inclusion is critical to our success. Inclusion is about recognizing, understanding, and appreciating
differences, and being able to connect across these differences by being mutually adaptive rather than insisting that everyone be, think, and act the same.
As an equal opportunity employer, we strive to build balanced teams from all walks of life. And because we operate from locations around the globe, we pursue that goal in accordance with a range of employment and other regulatory requirements. Our equal employment opportunity policy recognizes those requirements and provides protection from discrimination as required by applicable law.
The report requested by this proposalthe Proposal would be largely duplicative of Netflix’s existing report and is not necessary to Netflix’s business goals, including its goal of creating an environment where people of different backgrounds can contribute at their highest level and where their differences can make a positive difference for Netflix. Therefore, such a report would not be an efficienteffective use of resourcesNetflix’s resources.
The Board has considered stockholders’ feedback and provided additional transparency on our political activity
The Board has considered stockholders’ prior vote and statements in support of additional disclosure, during engagement and related to a substantially similar advisory and non-binding proposal presented last year, and has since taken action. Having taken into account stockholder feedback and their directly expressed views, we published a Political Activity Disclosures report in January 2022, which includes information on our approach to public policy advocacy, political contributions, lobbying activities and memberships in trade associations.
Specifically, our Political Activity Disclosures report, among other things, provides the following:
(i) a description of our approach to public policy advocacy;
(ii) an overview of management’s and the Board’s decision-making process and oversight for making lobbying payments (including that our Public Policy team, which reports directly to our Chief Legal Officer, oversee regulatory matters and government affairs and that the Nominating and Governance Committee of our Board reviews the Political Activity Disclosures on an annual basis);
(iii) insight into the reasoning for any lobbying expenditures and trade association memberships;
(iv) access to federal lobbying disclosure reports disclosing the amount we spent on federal lobbying activities;
(v) quantified disclosure of our political contributions during calendar years 2020 and 2021 to candidate campaigns, political party committees, political committees, other political organizations exempt from federal income taxes under IRC Section 527, and ballot measure committees; and
(vi) that the Netflix PAC made no political contributions in 2020 or 2021, and it raised no new funds during that time.
We believe our report, combined with the wide range of additional public disclosure, provides appropriate information to stockholders and other stakeholders
By comparison, the proponent requests additional disclosure regarding payments used for indirect lobbying or grassroots lobbying communication, but the Company may not have visibility or control over such other organizations’ activities. Furthermore, although trade associations that the Company is a member of may engage in lobbying activities, Netflix is a member of trade associations for a variety of reasons not related to lobbying, including for information gathering and
| 5 | https://www.marketwatch.com/story/netflix-uber-support-u-s-voting-rights-but-oppose-shareholders-push-for-political-lobbyingtransparency-11618440799. |
| 6 | https://itep.org/pandemic-profits-netflix-made-record-profits-in-2020-paid-a-tax-rate-of-less-than-1-percent/. |
| 7 | https://www.washingtonpost.com/us-policy/2021/08/31/business-lobbying-democrats-reconciliation/ |
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professional development and does not control trade association decision-making. It would be misleading to stockholders to attribute all of such organizations’ activities to the best interestsCompany. We believe that our Political Activity Disclosures report, when taken together with the wide range of stockholders.additional disclosure that is publicly available, provides stockholders and the public with appropriate information regarding our political contributions and public policy advocacy activities.
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.8.
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
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The Board unanimously recommends that the stockholders vote “AGAINST” the stockholder proposal for EEO policy risk report.
2022 Proxy Statement | 87 |
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Beneficial Owners and Management
The following table sets forth certain information known to the Companyus with respect to beneficial ownership of our common stock as of April 8, 20204, 2022 by (i) each stockholder that the Company knowswe know is the beneficial owner of more than 5% of our common stock, (ii) each director and nominee for director, (iii) each of the executive officers named in the Summary Executive Compensation table, which we refer to as the Named Executive Officers,Officer, and (iv) all executive officers and directors as a group. The Company hasWe have relied upon information provided to the Companyus by itsour directors and Named Executive Officers and copies of documents sent to the Companyus 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 the Company’sour common stock beneficially owned by them. Shares of the Company’sour common stock subject to options that are currently exercisable or exercisable within 60 days of April 8, 20204, 2022 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 | 33,560,277 | 7.55 | % | |||||||
BlackRock, Inc.(2) 55 East 52nd Street New York, NY 10055 | 29,228,602 | 6.58 | % | |||||||
Capital Research Global Investors(3) 333 South Hope Street Los Angeles, CA 90071 | 25,966,372 | 5.84 | % | |||||||
Reed Hastings(4) | 7,611,449 | 1.70 | % | |||||||
Jay C. Hoag(5) 250 Middlefield Road Menlo Park, CA 94025 | 1,714,723 | * | ||||||||
Ted Sarandos(6) | 572,994 | * | ||||||||
Greg Peters(7) | 286,802 | * | ||||||||
David Hyman(8) | 226,857 | * | ||||||||
Spencer Neumann(9) | 102,721 | * | ||||||||
Richard N. Barton(10) | 33,399 | * | ||||||||
Leslie Kilgore(11) | 48,361 | * | ||||||||
Timothy M. Haley(12) c/o Redpoint Ventures 2969 Woodside Road Woodside, CA 94062 | 39,286 | * | ||||||||
Bradford L. Smith(13) | 31,831 | * | ||||||||
Ann Mather(14) | 17,517 | * | ||||||||
Anne M. Sweeney(15) | 10,165 | * | ||||||||
Rachel Whetstone(16) | 9,435 | * | ||||||||
Mathias Döpfner(17) | 6,603 | * | ||||||||
Rodolphe Belmer(18) | 6,002 | * | ||||||||
Strive Masiyiwa(19) | 1,924 | * | ||||||||
All directors and executive officers as a group (18 persons)(20) | 10,724,264 | 2.39 | % | |||||||
2020 PROXY STATEMENT 95
2022 Proxy Statement | 89 |
Name and Address | Number of Shares Beneficially Owned | Percent of Class | ||||||
Capital Research Global Investors1 | 38,002,047 | 8.64 | % | |||||
The Vanguard Group, Inc.2 | 33,393,930 | 7.59 | % | |||||
BlackRock, Inc.3 | 27,179,842 | 6.18 | % | |||||
Reed Hastings4 | 9,266,012 | 2.09 | % | |||||
Jay C. Hoag5 | 4,325,015 | * | ||||||
Ted Sarandos6 | 595,262 | * | ||||||
Greg Peters7 | 289,525 | * | ||||||
David Hyman8 | 227,677 | * | ||||||
David Wells9 | 138,286 | * | ||||||
Richard N. Barton10 | 73,033 | * | ||||||
Leslie Kilgore11 | 48,320 | * | ||||||
Spencer Neumann12 | 45,919 | * | ||||||
Timothy M. Haley13 | 36,326 | * | ||||||
Kelly Bennett14 | 35,226 | * | ||||||
Bradford L. Smith15 | 28,871 | * | ||||||
Ann Mather16 | 15,366 | * | ||||||
Anne M. Sweeney17 | 10,205 | * | ||||||
Rodolphe Belmer18 | 5,179 | * | ||||||
Susan E. Rice19 | 4,728 | * | ||||||
Mathias Döpfner20 | 3,644 | * | ||||||
All directors and executive officers as a group (19 persons)21 | 15,163,363 | 3.40 | % | |||||
| * | Less than 1% of the Company’s outstanding shares of common stock. |
As of December 31, |
| (2) | As of December 31, 2021, based on information provided by BlackRock, Inc. in the Schedule 13G/A filed February 3, 2022. 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 23,924,562 shares. |
| (3) | As of December 31, 2021, based on information provided by Capital Research Global Investors in the Schedule |
96 NETFLIX
| Includes options to purchase |
Includes (i) |
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 in turn 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 disclaims beneficial ownership of such shares except to the extent of its 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 general partner of TCM VIII, which in turn is the general partner of TCV VIII, TCV VIII (A) and TCV VIII (B). TCV VIII 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 TCV VIII, TCV VIII (A), TCV VIII (B), Orange Investor, Orange (A) Investor, Orange (B) Investor, and Orange (MF) Investor but each disclaims beneficial ownership of such shares except to the extent of its 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.
Equity Compensation Plan Information The following table summarizes our equity compensation plans as of December 31, 2021. There were no equity compensation plans or arrangements not approved by security holders.
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
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.
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
David Hyman Chief Legal Officer and Secretary April Los Gatos, California
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF NETFLIX, INC. a Delaware corporation ARTICLE I The name of this corporation is Netflix, Inc. (the “corporation”). ARTICLE II The address of the registered office of the corporation in the State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City of Wilmington, County of New Castle, Delaware 19801. The name of its registered agent at such address is The Corporation Trust Company. ARTICLE III The nature of the business or purposes to be conducted by the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware, as the same exists or may hereafter be amended. ARTICLE IV The corporation is authorized to issue two classes of stock, to be designated, respectively, “Common Stock” and “Preferred Stock.” The Board of Directors of the corporation (the “Board”) is authorized, subject to any limitations prescribed by law, to provide for the issuance of shares of Preferred Stock in series, and to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences, and rights of the shares of each such series and any qualifications, limitations or restrictions thereof. Each outstanding share of Common Stock shall entitle the holder thereof to one vote on each matter properly submitted to the stockholders of the corporation for their vote; provided, however, that, except as otherwise required by law, holders of Common Stock shall not be entitled to vote on any amendment to this Certificate of Incorporation (including any certificate of designation of Preferred Stock relating to any series of Preferred Stock) that relates solely to the terms of one or more outstanding series of Preferred Stock if the holders of such affected series are entitled, either separately or together as a class with the holders of one or more other such series, to vote thereon by law or pursuant to this Certificate of Incorporation (including any certificate of designation of Preferred Stock relating to any series of Preferred Stock).
ARTICLE V The following provisions are inserted for the management of the business and the conduct of the affairs of the corporation, and for further definition, limitation and regulation of the powers of the corporation and of its directors and stockholders: A. The business and affairs of the corporation shall be managed by or under the direction of the Board. In addition to the powers and authority expressly conferred upon them by statute or by this Certificate of Incorporation or the Bylaws of the corporation, the directors are hereby empowered to exercise all such powers and do all such acts and things as may be exercised or done by the corporation. B. The directors of the corporation need not be elected by written ballot unless the Bylaws so provide. C. Any action required or permitted to be taken by the stockholders of the corporation must be effected at a duly called annual or special meeting of stockholders of the corporation and may not be effected by any consent in writing by such stockholders. D. Special meetings of stockholders of the corporation may be called only by the Chairperson ARTICLE VI A. Subject to the rights of the holders of any series of Preferred Stock to elect additional directors under specified circumstances, the number of directors shall be fixed from time to time exclusively by the Board pursuant to a resolution duly adopted by a majority of the Board.
B. Subject to the rights of the holders of any series of Preferred Stock then outstanding and unless the Board otherwise determines, newly created directorships resulting from any increase in the authorized number of directors or any vacancies in the Board resulting from death, resignation, retirement, disqualification, removal from office or other cause shall, unless otherwise provided by law or by resolution of the Board, be filled only by a majority vote of the directors then in office, whether or not less than a quorum, and directors so chosen shall hold office for a term expiring at the annual meeting of stockholders at which the term of office of the class to which they have been chosen expires. No reduction in the authorized number of directors shall have the effect of removing any director before such director’s term of office expires. C. Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the corporation shall be given in the manner provided in and in accordance with the Bylaws of the corporation. D. Subject to the rights of the holders of any series of Preferred Stock then outstanding, unless otherwise restricted by statute, by the Certificate of Incorporation or the Bylaws of the corporation, any director, or all of the directors, may be removed from the Board ARTICLE VII The Board is expressly empowered to adopt, amend or repeal any of the Bylaws of the ARTICLE VIII A director of the corporation shall not be personally liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except for liability (a) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (c) under Section 174 of the General Corporation Law of Delaware, or (d) for any transaction from which the director derived an improper personal benefit. If the General Corporation Law of Delaware is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of a director of the corporation shall be eliminated or limited to the fullest extent permitted by the General Corporation Law of Delaware as so amended. The corporation shall indemnify to the fullest extent permitted by law any person made or threatened to be made a party to an action or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he, she, his or her testator or intestate is or was a director, officer, employee or agent of the corporation (or any predecessor thereof), or serves or served at any other corporation, partnership, joint venture, trust or other enterprise as a director, officer, employee or agent at the request of the corporation (or any predecessor).
Any amendment, repeal or modification of the foregoing paragraph shall not adversely affect any right or protection of a director of the corporation existing at the time of such amendment, repeal or modification. ARTICLE IX The corporation reserves the right to amend or repeal any provision contained in this Certificate of Incorporation in the manner prescribed by the laws of the State of Delaware and all rights conferred upon stockholders are granted subject to this reservation
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
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.
FORMOFPROXY NETFLIX,INC. ANNUALMEETINGOFSTOCKHOLDERS JUNE THISPROXYISSOLICITEDON BEHALFOFTHEBOARDOFDIRECTORS 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 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 Either of such proxies or substitutes shall have and may exercise all of the powers of said proxies hereunder.
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