GOLDEN TICKETS

The top earner at Netflix isn’t just its CEO

Reed Hastings and Ted Sarandos.
Reed Hastings and Ted Sarandos.
Image: Reuters/Jean-Paul Pelissier
By
We may earn a commission from links on this page.

Netflix chief executive Reed Hastings is no longer the company’s top earner.

The streaming giant plans to pay both Hastings and chief content officer Ted Sarandos $31.5 million in 2019, Netflix said in a securities filing today (Dec. 28). It’s the first time in recent years that the two will be compensated equally.

Hastings has historically been the highest-paid person at the company he co-founded. Netflix’s board approved total compensation of $29.4 million for him in 2018 and $22.05 million the previous year.

His compensation is paid primarily in stock options. In fact, over the past five years, Hastings’ base salary has either decreased or stayed the same, while his stock-option allowance has increased substantially.

Sarandos, who leads content acquisition for Netflix, used to receive a proportionately small base salary and the bulk of his compensation in stock options and a performance-based bonus. Netflix paid him like this to avoid what it described in securities filings as a “substantial surcharge” on salaries of over $1 million for named company executives other than the chief financial officer.

But the company eliminated the bonus component of Sarandos’ pay in late 2017 after a change to US federal tax law that eliminated the benefits of that compensation structure. For 2017, Sarandos received a base salary of $12 million. For 2019, he’s been approved to earn a salary of $18 million, plus stock options worth $13.5 million.