Legal Chief of Netflix Inc., David Hyman, relied heavily on stock awards over base salary in 2021, echoing the company’s recent restructuring towards performance-based rewards. With his tenure beginning in 2002, Hyman is no stranger to change within the media giant’s corridors. Last year, he was the recipient of nearly $9.7 million in option awards, forming the majority of his $13.7 million remuneration, as disclosed in Netflix’s proxy statement.
In 2022, despite a generous pay boost for Hyman, Netflix underscored its commitment to incentive-based pay structures by trimming Hyman’s base salary from $6 million to $4 million. Netflix’s rationale for such a move is grounded in the intention to foster greater risk-taking among its top executives.
The reduction in cash compensation comes on the heels of record revenues and earnings for the streaming behemoth last year, numbers that outdid Wall Street’s estimates. However, this announcement was followed by a drop in stock value by almost 9%, due to a weakened revenue forecast and a company decision to cease revealing subscriber figures after 2025.
Despite his muted base salary, Hyman’s compensation increased by approximately 3% in 2021 from his 2022 earnings of around $13.3 million. Other perks of his pay package included a commuting allowance of $2,500, and a holding of Netflix shares valued at $19.3 million, as per Bloomberg data.
Netflix’s recent changes have also involved a reshuffling of its in-house legal team, with an announced exit of four senior lawyers in 2023. These organizational changes have accompanied Netflix’s shift towards live events and away from traditional film and series production.
The company’s ongoing legal battles with municipalities over franchise fees argue for a strong and nimble legal team. Along these lines, Netflix brought William McGarrity, a former partner at Mayer Brown, on board last year as its global tax controversy lead. As Netflix continues to navigate a rapidly changing business environment, its pay structures for top executives offer a lens into the company’s strategic adjustments.
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