Reed Hastings’s $300 Million Year
Reed Hastings took a big pay cut last year: In 2011, Netflix paid its CEO $9.3 million in cash and stock, but cut that down to $5.5 million in 2012.
So why is this man smiling?
Because he owns a big chunk of Netflix stock. And that stock has gotten much, much more valuable in the last 12 months.
A year ago, when Netflix was trading at $106, Hastings owned a 4.4 percent stake in the streaming video company, which was worth $265 million. Today, Hastings’s stake is up to 4.5 percent (more than half his ownership comes via options); at $215 a share, it is worth $559 million.
That is: The value of Reed Hastings’s Netflix holdings increased by almost $300 million in the last 12 months.
So he’s probably not smarting from a one-year pay cut.
Just in case he was, Netflix has boosted his 2013 pay. His salary will increase from $500,000 to $2 million, and he’ll get an option allowance of $2 million, up from $1.5 million.
If you want to see another happy Netflix shareholder, by the way, talk to Carl Icahn. Icahn accumulated a 9.9 percent stake in Netflix last fall, paying $58 a share. Today those shares are worth nearly $1.2 billion, which means Icahn is up close to $900 million in less than a year.