Netflix Law Chief Rides Stock Award for Boost After Base Pay Cut

Netflix Inc.‘s legal chief counted on stock awards for the bulk of his pay last year after the company shifted to incentive-based compensation for senior executives.

David Hyman, Netflix’s legal leader since 2002, received almost $9.7 million in option awards. That made up most of his nearly $13.7 million pay package, according to a company proxy statement filed Thursday.

Netflix last year disclosed a new pay structure designed to give less cash and more incentive-based stock awards to encourage greater risk-taking. After Hyman received a pay boost in 2022, the company has since reduced his annual base salary to $4 million from $6 million.

Netflix touted record revenue and earnings Thursday that bested Wall Street’s projections for the streaming media company, which last year saw its shareholders reject pay packages for top executives. Netflix’s stock was down by nearly 9% in midday trading Friday on a weak forecast for revenue and a warning that the company will stop reporting subscriber numbers in 2025.

Hyman, 58, didn’t respond to a comment request. A Netflix spokesman declined to comment.

The overall pay for Hyman increased about 3% last year from the roughly $13.3 million he earned in 2022. Hyman also received $2,500 for commuting costs. His Netflix shares are valued at $19.3 million, according to Bloomberg data.

For 2024, Netflix set a compensation target of $11 million for Hyman, including a $1.5 million salary, according to a December securities filing. Hyman has sold off almost $35.6 million in Netflix stock since that time.

Despite the cash compensation cut, Hyman can offset reductions to that portion of his pay if Netflix succeeds in revamping its business. A crackdown last year on password-sharing led the Los Gatos, Calif.-based company to add millions of new users, surpassing most analyst expectations.

Netflix also paid more than $424,000 last year to Microsoft Corp.’s top lawyer and vice chairman, Bradford Smith, to serve on its board, according to the proxy filing. Smith owns almost $4 million in Netflix stock.

Legal Changes

Netflix has restructured its film group to scale back movies and shows amid a pivot to live events, a move that appears to have had an impact on its in-house legal team. In October, Netflix announced that four senior lawyers would leave the company as part of a reorganization of its business and legal affairs team.

One of them, former vice president of corporate legal and associate general counsel Stephen Zager, in January took a new job at media and entertainment industry rival Walt Disney Co. as chief counsel and head of legal for corporate real estate and the company’s Disneyland Resort.

Netflix’s director of legal operations and technology, Jennifer McCarron, announced her exit this month. The move came after McCarron was named president of the Corporate Legal Operations Consortium in January.

Hilary Ware, head of litigation at Netflix, departed the company earlier this year for a job at online chat and social media platform Discord Inc. Stanislav “Stas” Zakharenko, a director of product and technology legal hired by Netflix in 2021, also left last year. In February, he joined the GTC Law Group.

The law firms that most frequently appear as outside counsel to Netflix in US federal courts within the past decade are Sheppard Mullin, Latham & Watkins, Davis Wright Tremaine, Munger, Tolles and Olson, and Wilson Sonsini Goodrich & Rosati, according to Bloomberg Law data.

Public records show that Netflix paid $200,000 last year to Washington’s Miller & Chevalier for lobbying on “domestic and international corporate tax proposals.”

The company and other streaming media services have battled municipalities over franchise fees. Netflix hired former Mayer Brown partner William McGarrity last year to be its global tax controversy lead.

— With reporting by Lucas Shaw.