Netflix’s stock price has fallen almost 70% since November, and employees aren’t happy about it.
According to the Information, Netflix employees asked the company’s leaders on Wednesday to issue them more equity grants to offset the drop. Shares of Netflix declined 35% that day (after the company revealed that it had lost subscribers for the first time in a decade and could lose another 2 million in the coming quarter.
The company’s plummeting stock price hits employees hard because of its startup-like approach to compensation: Netflix grants options to its employees rather than restricted stock units. As the Information points out, options, unlike RSUs, lose all their value once the price drops below the exercise price.
Netflix employees can sell quickly because the options grant every month and vest immediately, an unusual arrangement. Option grants more typically vest over time and are often granted on a quarterly basis.
Netflix employees also decide how much of their pay comes from stock and how much comes in cash. The company’s co-CEOs have made different choices about this: While both earned $34.65 million last year, Reed Hastings took 98% of it in stock while Ted Sarandos only took 42% in stock, according to the Information.Netflix is hoping that its