Netflix is overhauling the way it pays its top executives after shareholders rejected its CEO pay earlier this year … but co-CEOs Ted Sarandos and Greg Peters are still in line for big paydays next yar.
The company said Friday that it had approved target compensation packages worth $40 million for Sarandos and Peters for 2024.
However, the way it calculates their final compensation is being changed after shareholders indicated that they were not happy with the current compensation plan over the summer.
“Historically, Executive Officers have been permitted to allocate compensation to cash salary and stock options,” the company wrote in an SEC filing. “The Committee determined to eliminate this program feature to address shareholder concerns that executives could choose all cash compensation.”
Indeed, in past years Sarandos has taken a cash salary of $20 million, with the reminder of his pay in stock.
Moving forward, the salaries for Sarandos and Peters will be $3 million, with performance-based cash bonuses with a target of $6 million and restricted stock units and performance stock units worth $15.5 million each.
The company also set compensation targets for executive chairman Reed Hastings (he is eligible for $1 million in compensation in 2024) as well as CFO Spencer Neumann, who has a $15 million target comp next year.
Netflix shareholders rejected the 2022 executive pay packages in a “say on pay” vote in June, and while it was non-binding, the company promised “substantial changes” to its pay program in October, in an effort to assuage shareholder concerns.
Netflix also followed Paramount in adopting an Executive Officer Severance Plan which would pay the executives a lump sum payment in the event that the company is sold, or there is a “change in control.”
