Netflix CEO pays for tumultuous year
The video-streaming and DVD company is cutting the annual stock-option allowance for Reed Hastings.
The company has cut Hastings' annual stock-option allowance by half to $1.5 million, Bloomberg reports. A year ago, he was given $3 million in stock options.
Hastings didn't get a raise, either. His salary of $500,000 will stay the same. Netflix outlined the compensation changes in a regulatory filing.
Looking back over the last year, it's easy to see why Netflix's board isn't feeling too generous. Even Hastings has admitted the company shot itself in the foot over a number of bad decisions.
The worst move was the way Netflix hiked prices for subscribers in July. Customers who had signed up for one DVD out at a time plus online streaming saw prices jump by nearly 60%. Then there was the Qwikster plan to split Netflix's video streaming and by-mail DVDs into two operations. (That plan has since been reversed.)
Then there was a weird glitch where Netflix appeared to be enforcing a rule limiting video streaming to one device at a time. The company later said that was an error. Finally, Netflix lost a valuable contract with Starz, and saw about 1,000 movies disappear as a result.
Not the best year at all. And Netflix shares have taken the beating you would expect, dropping 75% from July highs.
You could argue that many of Netflix's problems this year involved marketing -- or, rather, the absence of good marketing. Perhaps that's why the company's chief marketing officer is getting a pay cut to $575,000 this coming year from $802,111 in 2011, Bloomberg reports.
But the company's chief content officer, Ted Sarandos, is getting a raise to $1 million in salary from $903,000 last year.
nice bonus for a poor job..........!
the rest of us would have been FIRED!
America the beautiful. Only place in the world you can screw so many people out of so much and still be generously rewarded for doing a good job.
Hasting could not understand that his customers would be outraged when hit with a 60% price hike for no added value and now less content with Starz leaving in March 2012. Hasting couldn't foresee that this would create openings for companies like Amazon, Redbox, Apple, etc.
NetFlix board of directors should have fired Hastings. Netflix stock went from $300 in July 2011 to $72 currently. He is an idiot with no vision.
NetFlix sucks, their movies suck, and their business model sucks! I can get better movies on VHS! I dumped them immediately after the price hike. Not worth it.
MAYBE THE S.O.B. FORGOT HOW HE STARTED GREED,GREED,GREED dont use netflix.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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