Spencer Neumann
NETFLIXAbout Spencer Neumann
Spencer Neumann, age 55, has served as Chief Financial Officer of Netflix since January 2019; he previously held senior finance roles across Disney and Activision and is currently a director at Adobe, Inc. Neumann holds a B.A. in Economics and an M.B.A. from Harvard University . Under his finance leadership, Netflix delivered 2024 results of ~300M paid memberships, ~$39B revenue (+16% YoY), operating income >$10B, and net cash from operations of ~$7.4B; FX-neutral operating margin was certified at 26.41% and FX-neutral revenue at $38.72B, driving 200% bonus payouts and 200% vesting of the first PSU tranche (relative TSR at the 98th percentile vs S&P 500) . Company-level pay vs performance shows 2024 net income of $8,712M, with cumulative TSR substantially above peers .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| Activision Blizzard | Chief Financial Officer | 2017–2019 | Led finance for a leading video gaming company |
| Walt Disney Parks & Resorts | CFO and EVP, Global Guest Experience | 2012–2017 | Senior finance and operations leadership across guest experience |
| The Walt Disney Company (incl. ABC Television Network; Walt Disney Internet Group) | Various finance/executive roles (incl. EVP ABC; CFO WDIG) | Joined 1992 | Broad media finance/strategy roles |
| Providence Equity Partners; Summit Partners | Private equity roles | n/a | Investment and value-creation experience |
External Roles
| Organization | Role | Years |
|---|---|---|
| Adobe, Inc. | Director | Since 2021 |
Fixed Compensation
| Year | Base Salary ($) | Target Bonus % of Salary | Actual Bonus Paid ($) | All Other Compensation ($) | Notes |
|---|---|---|---|---|---|
| 2022 | 7,000,000 | n/a | — | 38,537 | Prior program (monthly options) |
| 2023 | 7,000,000 | n/a | — | 94,073 | Prior program (monthly options) |
| 2024 | 1,500,000 | 200% (company-wide for NEOs) | 6,000,000 | 147,331 | Bonus paid in two installments; program payout 200% |
Performance Compensation
| Element | Metric | Weighting | Target | Actual 2024 | Payout | Vesting |
|---|---|---|---|---|---|---|
| Annual Cash Bonus (2024) | F/X Neutral Operating Margin | 65% | Not disclosed | 26.41% | 200% | Annual |
| Annual Cash Bonus (2024) | F/X Neutral Revenue | 35% | Not disclosed | $38.72B | 200% | Annual |
| PSU Tranche 1 (2024) | Relative TSR vs S&P 500 | 100% of tranche | Target = 55th percentile | 98th percentile | 200% | 1-year tranche (of 3) |
| RSUs (2024) | Time-based | — | — | — | — | Quarterly over 3 years starting 2/3/2024 |
Performance Compensation – Grant Detail (2024)
| Award Type | Grant Date | Shares (Threshold) | Shares (Target) | Shares (Max) | Fair Value ($) | Notes |
|---|---|---|---|---|---|---|
| PSU | 1/25/2024 | 5,269 | 10,538 | 21,076 | 8,543,312 | Relative TSR vs S&P 500; 3 tranches (1yr/2yr/3yr) |
| RSU | 1/25/2024 | — | 10,538 | — | 5,922,356 | Vests quarterly over three years |
| Stock Options (2023 comp cycle) | 1/2/2024 | — | 3,113 | — | 788,598 | Exercise price $468.50; 1-year vest for 2023 cycle |
Equity Ownership & Alignment
| Measure | Value |
|---|---|
| Total beneficial ownership (Spencer Neumann) | 193,550 shares (includes options to purchase 188,491; includes 1,368 RSUs vesting within 60 days of 4/7/2025) |
| Shares outstanding (for % calc) | 425,571,266 |
| Ownership as % of shares outstanding | ~0.045% (193,550 / 425,571,266) |
| 2024 RSU/PSU vested shares and value | 10,536 shares vested; $8,451,646 value |
| Unvested RSUs at 12/31/2024 (count; value) | 7,026; $6,262,414 |
| Unearned PSUs at 12/31/2024 (count; value) | 14,052; $12,524,829 |
| Options exercised (2024) | None |
| Stock ownership guidelines | 3x base salary for executive officers; 6x for co-CEOs |
| Hedging policy | Hedging and derivative transactions prohibited for Section 16 officers/directors |
| Clawback policy | Adopted to comply with Exchange Act Rule 10D-1 and Nasdaq standards |
Employment Terms
- Severance Plan (effective Jan 1, 2024): Double-trigger change-in-control; if terminated without cause or resigns for good reason within 3 months before or 24 months after a change-in-control, receives 2x (base salary + target bonus) plus 24 months benefits; outside CIC period, receives lump sum equal to (base salary + target bonus + target RSU + target PSU at target) and a pro-rata bonus based on actual performance .
- Neumann’s quantified severance (as of 12/31/2024):
- Non-CIC involuntary termination: $15,000,000 severance (base + target bonus + target LTI); plus pro rata RSU/PSU vesting ($490,187 RSUs; $5,226,771 PSUs) totaling $20,716,958 .
- CIC involuntary termination: $9,000,000 severance (2x base + target bonus); $72,838 benefits; RSU/PSU acceleration ($6,262,414 RSUs; $12,524,829 PSUs) totaling $27,860,081 .
- Equity acceleration terms: 2024 RSUs accelerate fully upon CIC termination or death/disability; pro-rata acceleration outside CIC; PSUs accelerate pro-rata outside CIC based on actual performance; under CIC, PSUs may be deemed earned at ≥target, convert to RSUs with time-vesting, or accelerate depending on circumstances .
Fixed Compensation – Multi-Year Summary (Spencer Neumann)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Salary ($) | 7,000,000 | 7,000,000 | 1,500,000 |
| Stock Awards ($) | — | — | 14,465,668 |
| Option Awards ($) | 10,022,952 | 9,907,780 | 788,598 |
| Non-Equity Incentive ($) | — | — | 6,000,000 |
| All Other Compensation ($) | 38,537 | 94,073 | 147,331 |
| Total ($) | 17,061,489 | 17,001,853 | 22,901,597 |
Performance and Company Context
| Company Performance Indicator | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income ($MM) | 4,492 | 5,408 | 8,712 |
| F/X Neutral Operating Margin | 20.0% | 20.9% | 26.4% |
| Revenue (GAAP) and highlights | — | — | ~$39B; +16% YoY; >300M members |
| Say-on-Pay (support) | — | 2024 vote: 82.2% support | — |
Compensation Structure Analysis
- Shift from options to PSUs/RSUs: In 2024, long-term equity moved to a 50/50 mix of PSUs (relative TSR vs S&P 500; target at 55th percentile) and RSUs with 3-year quarterly vesting, replacing the prior monthly option grants, enhancing pay-for-performance and retention .
- Increased at-risk pay and performance metrics: Annual bonus expanded to all NEOs with higher weighting on FX-neutral operating margin (65%) vs FX-neutral revenue (35%); 2024 performance certified at maximum, paying 200% of target .
- Governance alignment: Adoption of double-trigger CIC provisions; stock ownership guidelines; hedging prohibition; clawback policy compliant with 10D-1 .
Risk Indicators & Red Flags
- Hedging prohibited; clawback policy in place .
- Pledging: No specific pledging disclosure observed in proxy sections reviewed; hedging prohibitions explicitly stated .
- Related party transactions: None involving Neumann disclosed; indemnification agreements standard for all officers .
Equity Grant Practices and Vesting
- RSU grants sized using five-day average price; vest quarterly over three years beginning February 3, 2024 .
- 2024 PSUs vest in three equal tranches over one-, two-, and three-year performance periods; tranche 1 vested at 200% based on 98th percentile relative TSR .
- Options from 2023 cycle granted in January 2024 have one-year vest; other NEO options historically vested upon grant .
Investment Implications
- Strong pay-for-performance alignment: Neumann’s incentives are tightly linked to FX-neutral margin/revenue and relative TSR, with 2024 metrics certifying at maximum and PSU tranche 1 vesting at 200%, indicating high alignment with shareholder value creation .
- Equity mix shift: Transition from monthly options to PSUs/RSUs reduces short-term option-driven exercise activity and increases multi-year performance/retention focus; quarterly RSU vesting introduces ongoing share supply but is standard among large-cap peers .
- Retention and CIC protection: Double-trigger CIC and quantified severance suggest balanced retention mechanisms without excessive single-trigger acceleration; stock ownership guidelines further align interests .
- Ownership: Neumann’s beneficial stake (~0.045% of shares outstanding) with significant outstanding RSUs/PSUs indicates material ongoing alignment while limiting outsized immediate selling pressure (no 2024 option exercises; RSU/PSU vesting occurred as expected) .