Netflix doubles CEO's pay after strong year
Netflix has doubled CEO Reed Hastings' compensation after stocks tripled. Most of the Netflix CEO's pay is in the form of stocks.
Hastings' $5.52 million pay package consisted mostly of stock options that he received at the beginning of each month last year, according an Associated Press' analysis of regulatory documents filed Wednesday. The options were valued at a combined $5 million at the time of the granted.
Netflix, which is based in Los Gatos, gave Hastings compensation valued at $2.76 million in 2009. That package included options valued at $1.76 million.
Just how much Hastings' stock options are ultimately worth will depend on how Netflix's stock performs. It rocketed last year, soaring from $55 to nearly $176. Hastings took advantage of the run-up by exercising 184,500 of the options that he received in previous years to realize an $18.5 million gain.
Even bigger jackpots loom. Hastings holds 266,500 stock options with an exercise price of $1.50 that expire within the next 10 months. Netflix shares closed Thursday at $252.22, leaving it with a gain of more than 40 percent so far this year.
The stock options granted to Hastings last year had exercise prices ranging from $53.48 to $200.14.
The stock's robust gains reflect an expectation that millions more people will sign up for Netflix's service, which streams video over high-speed Internet connections and rents DVDs that are delivered through the mail.
Netflix ended last year with 20 million subscribers in the U.S. and Canada, giving it an audience larger than pay-TV channels such as Liberty Media Corp.'s Starz and CBS Inc.'s Showtime. It added 7.7 million subscribers last year, helping its earnings to rise 39 percent to $161 million.