CEO Reed Hastings to earn less than 2 other Netflix execs in 2012
Netflix Chief Executive Reed Hastings is taking a 33% pay cut after a dismal year for the company, leaving chief content officer Ted Sarandos as the highest paid executive at the company.
The online video and DVD subscription company revealed in a recent Securities and Exchange Commission filing that Hastings' stock option allowance for 2012 will be $1.5 million, half of what he is receiving for 2011. His salary will remain $500,000 for a total package of $2 million. The company did not disclose a reason for the pay cut, but it comes after a series of missteps -- including an unexpected price hike that angered consumers and an aborted attempt to separate the DVD business from Internet streaming -- led 800,000 subscribers to quit and the company's stock price to drop 76% from its high in July.
Hastings said he has slid into "arrogance," and was quoted as saying his company had been "overconfident" and had moved "too fast."
Other top Netflix executives won't see smaller paychecks in 2012, however.
Notably, Sarandos, who negotiates deals for content out of the company's Beverly Hills office, is getting a 22% raise next year, bringing his total compensation to $2.8 million from $2.3 million and making him Netflix's highest paid executive.
Also seeing their pay rise are chief product officer Neil Hunt, who will also make more than Hastings next year, chief marketing officer Leslie Kilgore, and chief financial officer David Wells.
Netflix's top executive compensation paled in comparison with the big media companies that provide its content. Viacom CEO Phillippe Dauman had a 2010 package worth $84.5 million, for instance, while CBS Corp. head Leslie Moonves received nearly $58 million.
Pay cuts for top executives at media companies have been rare in recent years despite the weak economy. A notable exception was Nintendo Chief Executive Satoru Iwata, who took a 50% whack after the company's 3DS portable game console posted disappointing early sales.
-- Ben Fritz
Photo: Netflix Chief Executive Reed Hastings in September. Credit: David Paul Morris/Bloomberg