Reed Hastings Stock Options Cut in Half

Dec 23, 2011
J. Webster
Comments Off on Reed Hastings Stock Options Cut in Half

Is this really a punishment for Reed Hastings? When you look at Netflix’s stock, perhaps Hastings realized that it’s not done going down so why do I want stock options right now. Perhaps he said maybe I can make a statement by agreeing to cut my options in half so I can then get more stock at a cheaper price down the road.

The punishment will be delivered with a 50 percent reduction in his stock option awards next year, according to regulatory documents filed Thursday. Instead of the $3 million stock option allowance he received this year, Hastings will get $1.5 million in 2012. His base salary will remain unchanged at $500,000.

It would have been difficult to make a case for giving Hastings a raise coming off a year in which his decisions transformed Netflix from Wall Street darling to bum. The company’s stock price plunged, and subscribers fled in a rebellion against a U.S. price increase of as much as 60 percent. The aftershocks of the subscriber exodus are expected to saddle Netflix with a net loss next year, the first time that has happened in a decade. (USA Today)

I’m betting Hastings thinks his stock is going lower so this doesn’t hurt me right now.

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