Summary
This 8-K filing from Netflix Inc. (NFLX) on December 28, 2009, primarily details modifications to the annual salaries and equity compensation for its Named Executive Officers (NEOs) for the upcoming year 2010. The company's Board of Directors has established these compensation packages, which include base salaries and significant stock option allowances. Notably, a change has been made to the formula for calculating the number of stock options granted to employees, including NEOs, effective from 2010. The key change in equity compensation involves a modification to the valuation used in the stock option grant formula. Previously calculated using 25% of the fair market value, the new formula will use 20% of the fair market value on the grant date. This adjustment, intended to align with general employee compensation practices, will impact the number of options granted. All options granted will be fully vested upon grant and subject to the terms of the 2002 Stock Plan.
Key Highlights
- 1Netflix has established annual salaries and stock option allowances for its Named Executive Officers (NEOs) for 2010.
- 2The CEO and Chairman, Reed Hastings, has an annual salary of $500,000 and a stock option allowance of $2,000,000.
- 3The Chief Financial Officer, Barry McCarthy, has an annual salary of $600,000 and a stock option allowance of $850,000.
- 4A key change effective for grants commencing in 2010 is the modification of the stock option grant formula for all employees, including NEOs.
- 5The formula for calculating the number of stock options will now use 20% of the fair market value on the grant date, down from 25%.
- 6All stock options granted will be fully vested upon grant and exercisable at the fair market value on the grant date.
- 7The company currently does not provide a program of performance bonuses for its Named Executive Officers.