Netflix CEO Will Take Pay Cut After Rough Year

Although the average CEO saw hefty pay increases this year, it’s a different story for Netflix honcho Reed Hastings. Following a year in which the company introduced a rate increase coupled with a short-lived decision to spin off the disc-rental division as Qwikster, causing an exodus of subscribers, Hastings will receive fewer gold coins to toss into his money bin.

According to the AP, Hastings will receive a $1.5 million stock option allowance next year, compared to the $3 million he received this year. The stock options are on top of his $500,000 base salary.

In the current corporate environment, it seems to be the underlings who usually suffer pay freezes or cuts to make up for an unsuccessful year. It’s better for company morale when those at the top share the hit.

Netflix CEO Reed Hastings’ pay chopped after bumpy 2011 [AP via Mercury News]

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  1. SerenityDan says:

    That is terribly unamerican of them. Make a mistake and then punish those who made it? Outrageous!

    • runswithscissors says:

      It’s worse! A reasonable CEO salary to begin with, then reduced in response to poor performance!

      THIS. IS. SOCIALISM!

      (kicks random stranger into pit)

  2. Fubish says: I don't know anything about it, but it seems to me... says:

    He pulled some bone-headed moves, but at least cutting his stock options in half appears to demonstrate some kind of accountability.

    However, my tears wil remain unshed.

  3. dolemite says:

    See, I think a 500K salary and 1 million in stock options is fairly reasonable CEO pay.

    • Rachacha says:

      I completely agree. The CEO has enough incoming cash to live a CEO lifestyle, and enough to compensate him for all of the issues that come with being a CEO, but the bulk of his income is tied to his performance and the performance of the company. If he does a good job and keeps customers and investors happy, he makes more money. If he approves bone-headed ideas, he makes less money.

    • runswithscissors says:

      Absolutely agreed.

  4. lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

    Get back to me when he has to get by on less than $40K per year.

    • dakeypoo says:

      Why?

      • Bsamm09 says:

        He’s very jealous of other people and wants them to have misfortunes so he can feel better about himself.

        • dakeypoo says:

          Or thinks that this CEO does not deserve to make more money despite the education, hard work, and past job experience he has.

          • Jules Noctambule says:

            It’s cute how you think CEOs are all so skilled and deserving.

            • BorkBorkBork says:

              How cute that you’re envious of other’s salaries.

            • kaplanfx says:

              Well in Hastings case, he’s the founder of the company. Without him, a company that generates $2 Billion in revenue and has 2,200 employees doesn’t exist. So yeah, if you have a job there, or you like the Netflix service, or you live in CA where the company pays taxes, or you believe in a capitalist system, then sure I think he’s deserving of the pay. And in this case he’s even honest enough to take a pay cut in a year where his performance was poorer than expected.

        • lovemypets00 - You'll need to forgive me, my social filter has cracked. says:

          I’m sure Mr. Hastings will have no problems buying groceries, paying for car insurance, heating his house, and covering any health emergencies that might arrive on his smaller salary of $500K. He should be happy he still has the job after the boneheaded Quikster announcement.

          Not jealous, not making myself feel better. Just don’t expect me to feel sorry for someone whose 1 year pay has been cut to what I make in 12+ years.

          • Southern says:

            Who’s more deserving – someone who earned a masters degree from Stanford (And spending the money that goes along with getting said degree) and took a risk with millions of his own money to start a company that may or may not have been successful…

            or….

            a pro sports player that makes $25 million a year because he’s good at playing a game?

            (Oh Lord, now I’ve done it. *Puts on fire retardant clothing*) :)

    • bobomb says:

      Get back to me when you’re a CEO running a huge company.

      I really don’t get the hate. Well, I do I guess. As has already been noted, it’s jealousy. People in positions of power and responsibility couldn’t deserve to be there, and couldn’t have earned it. It’s just so damn unfair! That’s why I’m not a CEO. It’s the system, man.

      Now, CEO pay for big companies is generally beyond obscene, but not in this case. I think it was reasonable before and reasonable now.

      I also think Netflix is still one of the best deals out there. It’s still priced way below what you’d pay for most services of the kind. We watch crazy amounts of stuff on Netflix, all for a flat rate. The antics this year were kind of a mess, but Netflix is still a hell of a deal. People need to quit whining.

  5. Wasp is like Requiem for a Dream without the cheery bits says:

    I think it’s clear that we should all have a moment of silence out of respect for this poor individual.

    • ARP says:

      I know this is snark, but at least its going in the right direction. Most CEO’s and banking executives get even bigger bonuses and pay for driving their companies into the ground, sorry “navigating the company through difficult economic times.” So the fact that he’s taking a pay cut when the company and economy isn’t doing that well should be commended.

      I tend to be on the liberal side on these boards, but I do think high ranking executives should be paid more money. What’s “more?” Well, 500k + $1.5M options isn’t that outrageous to me. $10M + $25M is outrageous to me, especially when the company does poorly or trades short term gain for long term viability.

  6. Buckus says:

    If he had just worked for a bank, his pay would have gone up regardless of company performance or whether or not they’re about to cease existence.

  7. GoldVRod says:

    I think they should deliver half his pay by mail in a red envelope and the other half should be streamed to him through his bank.

    Unfortunately, the money in the mail will be scratched to hell and covered in kids’ fingerprints and jam and snot, and the streaming half will only work on Tuesdays in super duper low resolution and each bill will be from 1994.

    • Wasp is like Requiem for a Dream without the cheery bits says:

      lololol +1

    • Wasp is like Requiem for a Dream without the cheery bits says:

      lololol +1

    • Invader Zim says:

      I have never recieved a dirty or scratched up dvd from netflix and I have never had streaming issues. I use the service nearly everyday. I did wonder if he was snorting crack when he relished the Idea of qwikster.

      • George4478 says:

        I went through several months a couple years back where nearly every DVD I got from them had to be cleaned. Now I never have to clean them. The difference was so radical that something in their process must have changed (instead of just happening to get clean DVDs all the time now)

        Like you, I don’t have issues with their streaming bandwidth.

      • HogwartsProfessor says:

        I wondered the same thing! I love Netflix so much I was really freaked when that happened. And yes, I kept my discs and streaming. Right now there are too many things I want to watch that aren’t streaming yet / won’t be anytime soon.

  8. Ouze says:

    The only checks this clown should be getting are of the unemployment variety.

  9. coffeeplease says:

    Considering how many mistakes he’s made as CEO he should consider himself lucky to still have a job.

  10. brch2 says:

    So he’s getting half the stock prices when the stock is only worth 25% what it was only months ago? Meaning he’s getting still getting more shares of stock than last year, and if the prices go back up, even if he gets fired eventually, he’ll end up still with more money than he would have with $3 Million of options of the previously higher priced stock.

  11. nikalseyn says:

    I suspect he is announcing a pay cut because he knows full-well that most Americans are just plain stupid and envious when it comes to entrepreneurs. This guy created a large company that gives people a product and as a result is well-compensated. That’s the way it is, regardless what raving socialist lunatics think. If someone thinks it’s not “fair” they have to live on

  12. CyberSkull says:

    I didn’t have a problem with the price thing, what bugged me was Qwickster and the new Xbox 360 Netflix client. I especially hate the new client, it makes me want to use the service less!