Q-1) Key features of Netflix Compensation Program:

 Compensation Mix: Autonomy to employees to select t their own mix of cash and equity.
 Pricing: Option grants were made monthly, with 1/12th of the annual allocation granted and
priced on the first trading day of each month.
 Vesting: No vesting restrictions were attached to stock option awards.
 Termination: Both Voluntary and involuntary
 Cash Bonuses: No cash bonuses were offered by the company.

Yes, the compensation program is in sync with the company’s culture, strategy, and business model.
Netflix’s compensation program reflects and supports the company’s strategic goals of a high-
performance culture through their competitive wages, choice of compensation package, and atypical
benefits. The employees receive top-of-market wages to encourage their high performance.

The following reasons indicate that the compensation program is in sync with the company’s culture,
strategy, and business model.

 In sync with the Fully Formed Adult culture

 Employees are given the opportunity to buy stocks every six months at a 15% discount –
further demonstrating the strategic internal alignment of Netflix’s compensation strategy
with their high-performance culture, as employees who are high performing will most likely
influence the company’s stock price and therefore reap the direct benefits of their hard
work.
 Rising number of subscribers needed the best, high performance employees
 The company encourages their employees to take responsibility, one of the company’s main
values, for their work and consistently exceed expectations by rewarding them with high
salaries.
 Lastly, employees are given the opportunity to design their own compensation mix at both
their hiring date and at the end of every year, with the ability to distribute their wage form
freely between cash and stocks (up to 60%) to best be able to meet their personal needs.
Again, this relates to Netflix’s desire to retain top employees with their flexibility and
competitive compensation strategy to ensure they continue to work for Netflix.