NFLX DEF 14A Report ended April 17, 2025

Netflix 2024 Year in Review

Business Highlights

In 2024, we executed on our plan to reaccelerate growth by continuing to improve all aspects of our service, including more series and films our members love, innovation in our product, a scaled ads offering, and growth into new areas such as games and live programming. In 2024, we surpassed 300 million paid memberships, achieved approximately $39 billion in revenue, representing approximately 16% year-over-year growth, and over $10 billion of operating income, as well as increased our net cash provided by operating activities to approximately $7.4 billion.

Shareholder Engagement

The Board appreciates shareholder feedback, and we engage with our shareholders throughout the year to better understand their perspectives. We continued to engage with shareholders throughout 2024. Our engagement team includes Board members, and Netflix Legal and Investor Relations teams.

Engagement since the 2024 annual meeting

We engaged with shareholders to discuss a wide range of issues, including our governance, strategic priorities, and performance, as well as environmental and social matters. Many shareholders acknowledged the company’s strong performance in 2024 and expressed support for the changes adopted in the executive compensation program. Feedback on the 2024 executive compensation structure was generally positive, with some investors inquiring about potential future changes to the program. Shareholders raised questions about board refreshment, executive succession planning, talent development, and company culture. Additionally, our shareholders also focused on our use and governance of artificial intelligence, as well as our climate strategy and disclosures on social matters.

Who We Are

Board Overview

Our Board is composed of 13 highly experienced, talented, and qualified directors with experience as board members and executives at some of the world’s most successful companies. We believe that the Board is well situated to navigate the changing competitive terrain that Netflix operates within. The Board has led Netflix through its evolution from a US DVD-by-mail company to a global streaming company to one of the leading entertainment companies in the world, while effectively managing risk and overseeing management performance. We believe that a diverse mix of skills, experience, perspectives and backgrounds contribute to an effective Board. The composition of our Board has evolved over the past several years, and when looking to fill Board positions, we will continue to evaluate potential candidates who we believe complement and augment our current Board.

		STRATEGY ALIGNMENT Our Board has the experience and expertise that aligns with these important facets of our long-term strategy

DIRECTOR INDEPENDENCE

The Board has determined that each of Messrs. Barton, Döpfner, Haley*, Hoag, Masiyiwa and Smith, Mses. Kilgore, Mather, and Sweeney and Ambassador Rice are independent under the applicable rules of the SEC and the listing standards of the Nasdaq Stock Market; therefore, every member of the Audit Committee, Compensation Committee and Nominating and Governance Committee is an independent director in accordance with those standards.

Our Bylaws provide a proxy access right for stockholders, pursuant to which a stockholder, or a group of up to 20 stockholders, owning at least three percent of outstanding shares of our common stock continuously for at least three years, may nominate and include in our annual meeting proxy materials director nominees constituting up to the greater of (a) two directors or (b) twenty percent of the Board, subject to certain limitations and provided that the stockholders and nominees satisfy the requirements specified in our Bylaws. Appropriately nominated proxy access nominees or nominees who comply with both our advance notice bylaw provisions and the SEC’s Rule 14a-19 will be included in the Company’s proxy statement and ballot.

Our Board Evaluation Process

Our Board periodically conducts a self-evaluation to help assure and enhance its performance. This process is overseen by the Nominating and Governance Committee, and typically involves interviews of each director by our Chief Legal Officer. Feedback is sought primarily in the following areas: (a) the Board’s effectiveness, structure, culture and composition, (b) the quality of and access to information shared with the Board about our business and (c) performance of the directors and quality of Board discussions.

Shareholder Engagement and Responsive Feedback

We are dedicated to engaging with our shareholders to solicit their views on a wide variety of issues, including corporate governance, environmental and social matters, executive compensation and other matters. We proactively engage with our shareholders throughout the year, and directors regularly participate in these discussions.

Over the past several years, in response to shareholder feedback, and as part of our ongoing evaluation of best practices, the Board has incorporated enhancements to our disclosures and corporate governance practices. A few highlights are below.

2024 Shareholder Proposals

At our 2024 annual meeting, shareholders presented five proposals for a vote. While these proposals did not receive majority support from our shareholders, the Board considers the voting outcome of all proposals and the feedback shareholders provide during engagement. During our engagements, shareholders inquired about the shareholder proposal requesting a report on Netflix’s use of artificial intelligence (AI) and our governance of AI use. Shareholders recognized the distinction between Netflix as a user of generative AI technologies, compared to commercial distributors of these new technologies. Some shareholders expressed support for increased disclosure around AI policies. Shareholders also provided feedback regarding the proposal to lower the special meeting threshold, conveying mixed views on the requested 15% threshold. Certain shareholders expressed support for a lower special meeting threshold, while some of our largest shareholders were comfortable with the current 20% threshold.

How We are Organized

Board Meetings and Committees

The Board held four meetings during 2024. Each Board member attended at least 75% of the aggregate of the total number of Board meetings and meetings of the Board committees, other than Jay Hoag who attended 50%.

As of the date of this Proxy Statement, the Board has three standing committees: (1) the Compensation Committee; (2) the Audit Committee; and (3) the Nominating and Governance Committee.

Compensation Committee

The Compensation Committee of the Board consists of three non-employee directors: Messrs. Döpfner and Haley* (Chair), and Ms. Sweeney. Each member of the Compensation Committee is independent in compliance with the rules of the SEC and the listing standards of the Nasdaq Stock Market as they pertain to Compensation Committee members. Each of the Compensation Committee members is also a non-employee director under Rule 16b-3 of the Exchange Act. The Compensation Committee reviews and approves all forms of compensation to be provided to our executive officers and directors. For a description of the role of the executive officers in recommending compensation and the role of any compensation consultants, please see the section entitled “Compensation Discussion and Analysis” below. The Compensation Committee held four meetings in 2024. Each member attended all the Compensation Committee meetings held in 2024.

The Report of the Compensation Committee is included in this Proxy Statement. In addition, the Board has adopted a written charter for the Compensation Committee, which is available on our Investor Relations website at ir.netflix.net/governancedocs .

Audit Committee

The Audit Committee of the Board consists of three non-employee directors: Mr. Barton, and Mses. Kilgore and Mather (Chair), each of whom is independent in compliance with the rules of the SEC and the listing standards of the Nasdaq Stock Market as they pertain to audit committee members. The Board has determined that Ms. Mather is an audit committee financial expert as defined by Item 407(d)(5)(ii) of Regulation S-K.

The Audit Committee engages the Company’s independent registered public accounting firm, reviews the Company’s financial controls, evaluates the scope of the annual audit, reviews audit results, consults with management and the Company’s independent registered public accounting firm prior to the presentation of financial statements to stockholders and, as appropriate, initiates inquiries into aspects of the Company’s internal accounting controls and financial affairs. The Audit Committee met seven times in 2024. Each member attended all of the Audit Committee meetings held in 2024.

The Report of the Audit Committee is included in this Proxy Statement. In addition, the Board has adopted a written charter for the Audit Committee, which is available on our Investor Relations website at ir.netflix.net/governancedocs .

In addition, the Board maintains effective independent oversight through a number of governance practices, including, open and direct communication with management, input on meeting agendas, periodic performance evaluations and regular executive sessions.

How We are Paid

In 2024, our directors, other than Ambassador Susan Rice, did not receive cash for services they provide as directors or members of Board committees but may be reimbursed for their reasonable expenses for attending Board and Board committee meetings. Each non-employee director, other than Ambassador Rice, received stock options pursuant to the Director Equity Compensation Plan. The Director Equity Compensation Plan provides for a monthly grant of stock options to non-employee directors of the Company in consideration for services provided to us and subject to the terms and conditions of our equity compensation plans. Ambassador Rice received an annual cash retainer of $300,000 for service in 2024, paid monthly in arrears. Starting in February 2025, Ambassador Rice began receiving stock options pursuant to the Director Equity Compensation Plan instead of the cash retainer.

We believe that for our Company, compensating directors with options is appropriate and creates the right incentives and long-term value alignment with stockholders. Without long-term value creation, directors are not compensated as the intrinsic value of options on dates of grant is zero.

The actual number of options granted each month to each of our directors is determined by the following formula: $25,000 / ([fair market value on the date of grant] x 0.40). Each monthly grant is made on the first trading day of the month, is fully vested upon grant and is exercisable at a strike price equal to the fair market value on the date of grant. The table below sets forth information concerning the compensation of our non-employee directors during 2024.

Compensia, Inc. (“Compensia”) annually advises the Board on our Board compensation program for the upcoming year, based on a comparison against our peer group’s board compensation programs and other compensation-related developments. We have not made any changes to the compensation program for our Board since 2016.

The following table summarizes the compensation paid to all Board members for the year ended December 31, 2024, other than Reed Hastings, Greg Peters and Ted Sarandos whose compensation is reflected in the Summary Compensation Table:

Certain Relationships and Related Transactions

Agreements with Directors and Executive Officers

We have entered into indemnification agreements with each of our directors and executive officers. These agreements require us to indemnify such individuals, to the fullest extent permitted by Delaware law, for certain liabilities to which they may become subject as a result of their affiliation with us.

In 2024, the daughter of Mr. Sarandos, a working producer on independent films, was employed by Netflix content productions. Her total compensation in fiscal year 2024 exceeded the $120,000 reporting threshold. The compensation she received was consistent with the level and type of compensation provided to other employees in similar positions.

Procedures for Approval of Related Party Transactions

We have a written policy concerning the review and approval of related party transactions. Potential related party transactions are identified through an internal review process that includes a review of payments made in connection with transactions in which related persons may have had a direct or indirect material interest. Those transactions that are determined to be related party transactions under Item 404 of Regulation S-K are submitted for review by the Audit Committee for approval and to conduct a conflicts-of-interest analysis. The individual identified as the “related party” may not participate in any review or analysis of the related party transaction.

The Audit Committee of the Board has selected Ernst & Young LLP (“EY”), an independent registered public accounting firm, to audit the financial statements of the Company for the year ending December 31, 2025. We are submitting its selection of EY for ratification by the stockholders at the Annual Meeting. A representative of EY is expected to be present at the Annual Meeting, will have the opportunity to make a statement and is expected to be available to respond to appropriate questions. EY has served as our independent registered public accounting firm since March 21, 2012. Neither applicable law nor our Bylaws require that stockholders ratify the selection of EY as our independent registered public accounting firm. However, we are submitting the selection of EY to stockholders for ratification as a matter of good corporate practice. If stockholders do not ratify the selection, the Audit Committee will reconsider whether to retain EY. Even if the selection is ratified, the Audit Committee, at its discretion, may change the appointment at any time during the year if they determine that such a change would be in the best interests of the Company and our stockholders.

Principal Accountant Fees and Services

During 2024 and 2023, fees for services provided by EY were as follows (in thousands):

Audit Fees include amounts related to the audit of our annual financial statements and internal control over financial reporting, and quarterly review of the financial statements included in our Quarterly Reports on Form 10-Q. Audit fees also include amounts related to accounting consultations and fees for statutory audit filings.

Audit-Related Fees include fees related to assurance and related services that are reasonably related to the performance of the audit or review of our financial statements, including attestation services that are not required by statute or regulation.

Tax Fees include fees billed for tax compliance, tax advice and tax planning services.

There were no other fees billed by EY for services rendered to us, other than the services described above, in 2024 and 2023.

The Audit Committee has determined that the rendering of non-audit services by EY was compatible with maintaining their independence.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Registered Public Accounting Firm

The Audit Committee pre-approves all audit and permissible non-audit services provided by our independent registered public accounting firm. These services may include audit services, audit-related services, tax and other services. Pre-approval is generally provided for up to one year, and any pre-approval is detailed as to the particular service or category of services. The independent registered public accounting firm and management are required to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public accounting firm in accordance with this pre-approval, and the fees for the services performed to date. The Audit Committee may also pre-approve particular services on a case-by-case basis. During 2024, services provided by EY were pre-approved by the Audit Committee in accordance with this policy.

Report of the Audit Committee of the Board

The Audit Committee engages and supervises the Company’s independent registered public accounting firm and oversees the Company’s financial reporting process on behalf of the Board. Management has the primary responsibility for the preparation of financial statements and the reporting process, including the systems of internal controls. In fulfilling its oversight responsibilities, the Audit Committee reviewed and discussed the audited financial statements in the Company’s annual report on Form 10-K for the year ended December 31, 2024 with management, including a discussion of the quality of the accounting principles, the reasonableness of significant judgments made by management and the clarity of disclosures in the financial statements.

The Audit Committee reviewed with Ernst & Young LLP (“EY”), the Company’s independent registered public accounting firm, who is responsible for expressing an opinion on the conformity of the Company’s audited financial statements with accounting principles generally accepted in the United States of America, its judgments as to the quality of the Company’s accounting principles and the other matters required to be discussed with the Audit Committee under the auditing standards generally accepted in the United States of America, including the matters required by the Public Company Accounting Oversight Board (“PCAOB”) and the Securities and Exchange Commission (the “SEC”). In addition, the Audit Committee has discussed with EY its independence from management and the Company and has received the written disclosures and the letter regarding EY’s communications with the Audit Committee concerning independence as required by PCAOB rules.

The Audit Committee also reviewed the fees paid to EY during the year ended December 31, 2024 for audit and non-audit services, which fees are described under the heading “Principal Accountant Fees and Services.” The Audit Committee has determined that the rendering of all non-audit services by EY were compatible with maintaining its independence.

The Audit Committee discussed with EY the overall scope and plans for its audit. The Audit Committee met with EY, with and without management present, to discuss the results of its examinations, its evaluations of the Company’s internal controls, and the overall quality of the Company’s financial reporting.

Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements be included in the annual report on Form 10-K for the year ended December 31, 2024, for filing with the Securities and Exchange Commission.

Audit Committee of the Board

Richard N. Barton

Leslie Kilgore

Ann Mather

Our Executive Officers as of April 17, 2025 are as follows:

For more information about Messrs. Peters and Sarandos, see “Proposal 1: Our Board of Directors—Election of Directors—Who We Are.” Information about our other executive officers is set forth below:

There are no family relationships among any of our directors, nominees for director and Executive Officers.

As required by section 14A of the Securities Exchange Act (“Section 14A”), as amended by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”), we are providing our stockholders with the opportunity to cast a non-binding advisory vote to approve the compensation of our Named Executive Officers, as disclosed pursuant to the compensation disclosure rules of the SEC (also referred to as “say-on-pay”).

We currently hold our advisory say-on-pay vote every year. Stockholders will have an opportunity to cast an advisory vote on the frequency of say-on-pay votes at least every six years. We currently expect that the next advisory vote on the frequency of the say-on-pay votes will occur at the 2029 annual meeting of stockholders.

We encourage stockholders to read the Compensation Discussion and Analysis section of this Proxy Statement for an overview of our executive compensation philosophy and program, which is designed to attract and retain outstanding performers. Our compensation practices are guided by market rates and tailored to account for the specific needs and responsibilities of the particular position, as well as the performance and unique qualifications of the individual employee, rather than by seniority.

The Compensation Discussion and Analysis describes a number of changes that took effect for the 2024 executive compensation program, which were adopted in response to the 2023 say-on-pay vote and shareholder engagement. These changes included: (1) eliminating the ability to allocate compensation between cash salary and stock options for our Named Executive Officers; (2) limiting guaranteed cash compensation by setting base salary at $3 million for the co-CEOs, $100,000 for our Executive Chairman, and $1.5 million for the other Named Executive Officers; (3) expanding participation in the annual performance-based cash bonus program to all Named Executive Officers; (4) granting performance-based restricted stock unit awards and time-based restricted stock unit awards with expanded vesting terms to our Named Executive Officers instead of stock options for long term equity compensation; (5) evolving our change-in-control severance arrangements to include “double-trigger” provisions for Named Executive Officers; and (6) adopting stock ownership guidelines for our Named Executive Officers.

The Compensation Committee believes these changes to our compensation structure are in line with peer companies’ compensation practices, help attract and retain top talent to support our growth, incentivize our Named Executive Officers to execute on strategies aimed at achieving long-term success and align with stockholder interests.

Required Vote

The affirmative vote of the majority of the shares present or represented by proxy at the meeting and entitled to vote on the proposal is required to approve the compensation of our Named Executive Officers disclosed in this Proxy Statement. The vote is an advisory vote, and therefore not binding.

Netflix Recommendation

		The Board unanimously recommends that the stockholders vote “ FOR ” approval of our Named Executive Officer compensation disclosed in this Proxy Statement.

A Message from the Compensation Committee Chair

We thank the Netflix shareholders for your support of our updated executive compensation program. At the 2024 annual meeting of shareholders, our say-on-pay proposal received 82.2% support, which reflects a meaningful improvement over the prior year’s vote. We believe this is an acknowledgment of the significant changes made to our executive compensation program for 2024 in response to our shareholder engagement and feedback. These changes included:

(1) eliminating the ability to allocate compensation between cash salary and stock options for our Named Executive Officers;

(2) limiting fixed cash compensation by setting base salary at $3 million for the co-CEOs, $100,000 for our Executive Chairman, and $1.5 million for the other Executive Officers;

(3) expanding participation in the annual performance-based cash bonus program to all Executive Officers;

(4) introducing performance-based restricted stock unit awards and time-based restricted stock unit awards with expanded vesting terms instead of stock options for long-term equity compensation;

(5) amending our change in control severance arrangements for Executive Officers to establish “double-trigger” provisions in place of the legacy “single-trigger”; and

(6) adopting stock ownership guidelines for Executive Officers.

The Compensation Committee believes these changes to our compensation structure will continue to attract and retain top talent to support our growth and incentivize our Executive Officers to execute on strategies aimed at achieving long-term shareholder value creation. We encourage you to review the Compensation Discussion and Analysis section that describes in further detail the comprehensive changes to our executive compensation program and performance achieved in 2024.

We appreciate the constructive feedback we received from our shareholders and your recognition of the significant executive compensation program changes we have made in response. We look forward to continuing the open dialogue.

We value your trust in and commitment to Netflix, and thank you for being a shareholder.

Tim Haley

Compensation Committee Chairperson

2024 Named Executive Officers

This Compensation Discussion and Analysis describes the compensation program for our Named Executive Officers listed below, and the titles reflect the positions held by each Named Executive Officer on December 31, 2024.

As of December 31, 2024, our executive officers as defined under Rule 3b-7 (“Executive Officers”) were the following five individuals:

Messrs. Sarandos, Peters, Hastings, Neumann, and Hyman were the only individuals who served as Executive Officers of Netflix during 2024.

Our Company and 2024 Performance

Netflix is one of the world’s leading entertainment services with more than 300 million paid memberships in over 190 countries. In 2024, we executed on our plan to reaccelerate growth by continuing to improve all aspects of our service, including more series and films our members love, innovation in our product, a scaled ads offering, and growth into new areas such as live programming and games. We finished the year with approximately $39 billion in revenue. For the first time in our company’s history, our operating income exceeded $10 billion, and we increased our net cash provided by operating activities to $7.4 billion. These achievements resulted in bonus payouts equal to 200% of the total target bonus opportunity for each of our Named Executive Officers. In addition, 200% of the target awards for the first tranche of the performance-based restricted stock unit (“PSU”) awards granted in 2024 were earned due to our outstanding relative stock price performance compared to constituents of the S&P 500, achieving a relative total shareholder return at the 98th percentile.

Key Enhancements Effective for Netflix’s 2024 Compensation Program

Determining Executive Compensation

We aim to pay employees at their personal top of market. We believe this helps us attract and retain the most talented employees from around the globe. To establish the personal top of market for each of our Named Executive Officers, the Compensation Committee (a) reviews and considers the performance of each Named Executive Officer and (b) considers, for each Named Executive Officer, the estimated amount of compensation:

Role of the compensation committee

Our compensation practices are evaluated by the Compensation Committee on an ongoing basis to determine whether they are appropriate to attract, retain and reward outstanding performers. Such evaluations, along with input from our shareholders, may result in refinements to the executive compensation program, including changes in how compensation is determined and awarded.

Role of executive officers

Each of our co-CEOs, in consultation with our Chief Talent Officer, reviewed market compensation information prepared by Compensia for each of the other Named Executive Officers. The co-CEOs then made a recommendation to the Compensation Committee regarding compensation for the other Named Executive Officers. The Compensation Committee reviewed and discussed this information and the recommendation by the co-CEOs, and then determined the total target compensation and the target compensation of each element of compensation for each Named Executive Officer, as it deemed appropriate in December 2023.

Our co-CEOs’ compensation was determined by the Compensation Committee outside the presence of the co-CEOs. The Compensation Committee’s decision regarding compensation for the co-CEOs was based on the philosophy described above. It included a review of comparative data, including the compensation paid by the companies in our compensation peer group to their chief executive officers and consideration of the accomplishments of the co-CEOs in developing the business strategy for the Company, the Company’s performance against this strategy, and the co-CEOs’ ability to attract and retain senior management. In establishing each co-CEO’s compensation, the Compensation Committee was also mindful of the results of the say-on-pay vote for the prior year and input received from shareholders. Compensation for any given year is generally established at the end of the prior year. The 2024 compensation for our Named Executive Officers was approved at the end of 2023.

Role of the compensation consultant

In determining executive compensation for 2024, the Compensation Committee retained Compensia to advise on executive and director compensation matters. Compensia provided various services to the Compensation Committee during 2024, including the review, analysis and update of our compensation peer group; the review and analysis of our Named Executive Officer compensation against competitive market data based on the companies in our compensation peer group; the analysis of potential and actual executive compensation program changes for 2025; the review and analysis of our non-employee director compensation; and support on other ad hoc matters. The Compensation Committee has assessed the independence of Compensia taking into account, among other things, the factors set forth in Exchange Act Rule 10C-1 and the Nasdaq listing standards, and concluded that no conflict of interest exists with respect to the work that Compensia performs for the Compensation Committee.

For the 2024 Bonus Program, the Compensation Committee used the following performance metrics: F/X Neutral Revenue and F/X Neutral Operating Margin, as they represent key performance indicators that are directly impacted by Named Executive Officers’ decision-making. The Compensation Committee set targets at levels it considered to be appropriately rigorous for the year, including requiring growth in revenue compared to the prior year. For details on 2024 performance, see “2024 Annual Performance-Based Cash Bonus Program.”

In determining total target compensation for our Named Executive Officers for 2024, in consultation with Compensia, the Compensation Committee considered our compensation philosophy, including comparative market data.

For Mr. Sarandos, the Compensation Committee considered the competitive market compensation paid by other similarly-situated companies and determined to keep Mr. Sarandos’ total target compensation flat as compared to 2023.

For Mr. Peters, the Compensation Committee considered the competitive market compensation paid by other similarly-situated companies, his increasing duties and scope of responsibilities and performance as a co-CEO, and his total target compensation was increased from $34,650,000 to $40,000,000, which is consistent with the total target compensation for his co-CEO, Mr. Sarandos.

For Mr. Hastings, the Compensation Committee considered the evolving role and responsibilities of the Executive Chairman position and decreased his total target compensation from $3,000,000 to $1,000,000.

For Mr. Neumann, the Compensation Committee considered the competitive market compensation paid by other similarly-situated companies and his experience in leading a financial organization in the media industry, as well as the increasing complexity of our financial reporting, and his total target compensation was increased from $14,000,000 to $15,000,000.

For Mr. Hyman, the Compensation Committee acknowledged his performance in managing and developing a global legal and public policy function. After reviewing the competitive market compensation paid by other similarly-situated companies, the Compensation Committee determined to keep Mr. Hyman’s 2024 target compensation flat as compared to 2023.

Actual compensation that an executive may earn may be more or less than total target compensation depending on Company performance. If the Company does not meet target performance, an executive may earn less than the target bonus or no bonus at all, and if the Company outperforms, an executive may earn more. Similarly, PSU awards will vest only upon the achievement of performance targets over the relevant performance period and are forfeited if threshold performance is not achieved. RSU awards granted in 2024 also vest over a three-year period even though the full grant date fair value of the award is reflected in 2024 compensation in the Summary Compensation Table. The total target compensation amounts may also be different from the amounts reported in the Summary Compensation Table based on actual performance and the accounting valuation of the equity awards.

2024 Annual Performance-Based Cash Bonus Program

In 2024, the Compensation Committee expanded the Bonus Program to include all Named Executive Officers and established target bonus opportunities at 200% of base salary. For our co-CEOs, the target bonus opportunity was decreased to 200% of salary from a higher opportunity based on the 2023 executive compensation structure to better align with market practices and was done in tandem with our decision to allocate a greater ratio of variable compensation to equity incentives. As such, the Committee introduced RSU and PSU awards for the 2024 compensation program, which have longer vesting or performance periods, and are in line with the goal of incentivizing alignment with the long-term interests of our shareholders and value creation.

In January 2025, the Compensation Committee certified the achievement of F/X Neutral Revenue at $38.72 billion, which exceeded 200% of our target, resulting in a 200% payout. F/X Neutral Operating Margin was certified at 26.41%, which exceeded 200% of our target, resulting in a 200% payout. This resulted in a payout of 200% of the target bonus amount, determined as follows:

Based on F/X Neutral Revenue and F/X Neutral Operating Margin performance against the performance targets set at the beginning of 2024, the Compensation Committee determined that the Named Executive Officers receive payouts equal to 200% of the total target bonus to each of our Named Executive Officers.

To facilitate the executive compensation program transitions for the Named Executive Officers and the significant reduction in cash salary in 2024 as compared to 2023, the Compensation Committee approved the payment of 2024 annual bonuses in two installments. Forty-five percent (45%) of the target bonus amount was paid in advance after the second quarter of 2024, with the remaining earned amount paid following the completion of the 2024 performance period. For the 2025 bonus program, the full amount of any earned bonus will be paid after the Compensation Committee’s certification of the bonus program’s results.

2024 Long-Term Equity Incentive Awards and Results

The Compensation Committee transitioned to the use of an equal mix of PSU awards (at target performance) and RSU awards for 2024 Named Executive Officer compensation to incorporate longer vesting periods and specific performance criteria in our equity awards. The Compensation Committee established the following target values for each Named Executive Officer’s equity awards based on the considerations discussed in “Determining Executive Compensation” above. The value of the target PSU awards and target RSU awards differs from the value of stock awards reported in the Summary Compensation Table because the Summary Compensation Table reflects the grant date fair value of the awards measured in accordance with ASC 718.

Certain eligible U.S. employees, including our Named Executive Officers, also have the opportunity to participate in our 401(k) matching program which enables them to receive a dollar-for-dollar Company match of up to 4% of their compensation to the 401(k) fund, subject to limitations under applicable law. Messrs. Hyman, Neumann and Sarandos all participated in this program in 2024 and therefore we matched their 401(k) contributions as shown in the compensation tables of this Proxy Statement.

We also provide all employees tax equalization payments for business-related travel, which includes international assignments and incremental state taxes for travel to states outside an employee’s regular state to cover income taxes in excess of what the employee would have incurred had the employee remained in their regular state or country. We also maintain a group term life insurance policy for all full-time employees, including our Named Executive Officers.

We permit our Named Executive Officers and their family members and guests to use our corporate aircraft for personal use and consider amounts related to such travel to be a perquisite. Additionally, our Named Executive Officers are permitted to use a company-provided car service under certain circumstances. We also pay for residential security measures and services for certain Named Executive Officers when deemed necessary. All applicable perquisites are reflected in the “All Other Compensation” column of the Summary Compensation Table.

Termination-Based Compensation and Change in Control Retention Incentives

Effective as of January 1, 2024, Messrs. Sarandos, Peters, Hastings, Neumann and Hyman participate in the Executive Officer Severance Plan (the “Severance Plan”). Under the Severance Plan, if they experience a termination of employment from the Company without cause or resign for good reason, in each case, within 3 months prior to or 24 months following a change in control (the “change in control protection period”), they are eligible to receive the following, payable no later than two and one half months following the later of the date of their termination of employment or a change in control: (i) a cash lump sum equal to two times the sum of their (a) annual base salary and (b) target annual bonus under the Bonus Plan; (ii) a pro-rata lump sum cash bonus, based on target performance under the Bonus Plan, but pro-rated for the number of days that the participant was employed during the performance period; and (iii) a cash lump sum for twenty-four months of continued health, dental and vision benefits for the participant and their covered dependents. Alternatively, if a participant in the Severance Plan has their employment terminated without cause outside of the change in control protection period, they will be entitled to receive (i) a lump sum cash payment equal to the sum of their (a) annual base salary, (b) target annual bonus under the Bonus Plan and (c) target annual equity award opportunity for RSUs and PSUs (at target) payable no later than two and one half months following their termination of employment and (ii) a pro-rata bonus under the Bonus Plan (“Pro Rata Bonus”), based on actual performance as determined at the end of the performance period and paid at the time when bonuses are paid to actively employed executives, but pro-rated for the number of days that the participant was employed during the performance period. Each of the terms “change in control”, “cause” and “good reason” are defined in the Severance Plan, a copy of which is attached as Exhibit 10.3 to the Company’s Form 8-K filed on December 8, 2023.

PSUs and RSUs also contain certain acceleration provisions. Specifically, the RSUs granted in January 2024 will (i) accelerate in full in connection with an Executive Officer’s termination of employment without cause or resignation for good reason during a change in control protection period or the Executive Officer’s death or disability (with the terms “cause”, “change in control protection period”, “disability” and “good reason” defined in the applicable award agreement) and (ii) accelerate on a pro-rata basis in connection with the Executive Officer’s termination of employment without cause outside of a change in control protection period.

Compensation Committee Report

The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on the review and discussions, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement and the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Compensation Committee of the Board

Mathias Döpfner

Timothy M. Haley

Anne Sweeney

Summary Compensation Table

The following Summary Compensation Table sets forth information concerning the compensation paid to our Named Executive Officers in 2024, 2023, and 2022.