Letter from Our Lead Independent Director

                 Jay C. Hoag

                 Lead Independent Director

Notice

Notice of Annual Meeting of Stockholders to be Held on June 1, 2023

To the Stockholders of Netflix, Inc.:

NOTICE IS HEREBY GIVEN that the annual meeting of stockholders of Netflix, Inc., a Delaware corporation (the “Company,” “Netflix,” “we,” “us,” or “our”), will be held on June 1, 2023 at 3:00 p.m. Pacific Time (“Annual Meeting”). You can attend the Annual Meeting via the internet and vote your shares electronically by visiting www.virtualshareholdermeeting.com/NFLX2023 (there is no physical location for the Annual Meeting). You will need to have your 16-Digit Control Number included on your Notice or your proxy card (if you received a printed copy of the proxy materials) to join the Annual Meeting.

THE ANNUAL MEETING WILL BE HELD FOR THE FOLLOWING PURPOSES:

These business items are described more fully in the Proxy Statement accompanying this Notice. Only stockholders who owned our common stock at the close of business on April 6, 2023 can vote at this meeting or any adjournments that may take place.

ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE ANNUAL MEETING VIA THE INTERNET.

For ten days prior to the Annual Meeting, a complete list of the stockholders entitled to vote at the meeting will be available for examination by any stockholder for any purpose germane to the meeting. Please email board@netflix.com to make arrangements to examine the stockholder list.

By order of the Board of Directors

David Hyman

Chief Legal Officer and Secretary

April 21, 2023

Los Gatos, California

YOUR VOTE IS IMPORTANT. PLEASE VOTE OVER THE INTERNET, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING VIA THE INTERNET. IF YOU RECEIVED A PAPER PROXY CARD AND VOTING INSTRUCTIONS BY MAIL, PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS PROMPTLY AS POSSIBLE IN THE ENCLOSED ENVELOPE, WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING VIA THE INTERNET.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON JUNE 1, 2023: THIS PROXY STATEMENT, THE NOTICE OF ANNUAL MEETING OF STOCKHOLDERS AND THE ANNUAL REPORT ARE AVAILABLE AT WWW.PROXYVOTE.COM.

Contents

Netflix 2022 Year in Review

Business Highlights

2022 was a difficult year with a bumpy start but with a brighter finish. To reaccelerate growth, we introduced a lower priced ad-supported subscription plan to provide consumers with increased pricing choice on our service, developed a thoughtful approach to address account sharing, acquired a number of businesses to complement our growth, and continued to release films, series and games that are loved by our members. At the end of 2022, we had approximately 231 million paid memberships, and financial highlights for 2022 included achieving approximately $32 billion in annual revenue, representing 6% year-over-year growth, and over $5.6 billion in operating income.

Executive Leadership

The Board of Directors (the “Board”) oversees executive succession planning on an ongoing basis. As part of the chief executive officer succession plan, we adopted a co-Chief Executive Officer structure in 2020, when Ted Sarandos was named co-Chief Executive Officer along with Reed Hastings. This change mostly formalized the prior working relationship between Ted and Reed. In January 2023, Reed stepped down as co-Chief Executive Officer and President of the Company. He will continue to serve as the Executive Chairman. Greg Peters was promoted to serve as co-Chief Executive Officer alongside Ted. Greg was also appointed to the Board. The three of them have worked together for over 15 years and have had a long history of collaboration on corporate strategy, planning and all aspects of company management. We believe the co-CEO structure continues to provide broad expertise and deep leadership at the highest level of the Company, and provides an efficient and effective leadership model to support our future growth.

Board Composition

Rodolphe Belmer resigned from the Board effective October 27, 2022. In January 2023, Greg Peters was appointed to the Board in connection with his appointment as co-Chief Executive Officer. More information on each Board member can be found in the section titled, “Proposal 1: Our Board of Directors—Election of Directors—Who We Are.”

Shareholder Engagement

The Board appreciates shareholder feedback, and we engage with our shareholders throughout the year to better understand their perspectives. In response to the low Say-on-Pay vote at the 2022 annual meeting, we undertook extensive shareholder engagement efforts to better understand our shareholders’ concerns regarding our compensation program and conducted two rounds of engagement—one in the summer of 2022 and one in early 2023. Cumulatively, we invited shareholders representing approximately 57% of our shares outstanding, including some who did not support our Say-on-Pay vote, to participate in calls to discuss our executive compensation program. Members of the Netflix legal and investor relations teams met with 19 shareholders, representing approximately 51% of shares outstanding. Compensation committee members participated in a majority of these engagements, meeting with shareholders representing approximately 37% of our shares outstanding, and are scheduled to meet with shareholders representing approximately another 8% of our shares outstanding prior to our annual meeting (for a total director engagement of 45% of shares outstanding). Our engagement discussions focused primarily on our executive compensation program and potential changes, as well as executive succession planning and other ESG matters. In response to these discussions and feedback, the Compensation Committee is evolving our executive compensation program to

include a salary cap, a minimum stock option allocation with a one-year vesting period and a cash bonus program for our co-Chief Executive Officers and Executive Chairman. A detailed discussion of our engagement with shareholders regarding our compensation program and changes for the 2023 compensation year are included in the Compensation Discussion and Analysis section.

Inclusion and Diversity

We believe a critical component of our success is our company culture. This culture, which is detailed in a “Culture Memo” located on our website, includes Inclusion as one of our nine cultural values. We want our members and members-to-be all over the world to see themselves, their cultures and lived experiences reflected on screen, so we work to build diversity and inclusion into all aspects of our operations globally. This means supporting talent in front of and behind the camera through our Fund for Creative Equity and Grow Creative work, and investing in the future of tech through our Emerging Talent program.

It’s equally important that our employee base is as diverse as the communities we serve. We look to help increase representation by training our recruiters and managers how to hire with diversity and inclusion in mind, expanding outreach to underrepresented communities and helping senior leaders diversify their networks. We are equipping our leaders with the skills to lead inclusively so they create the type of work environment where people of all backgrounds have an equal opportunity to contribute at their highest levels without exclusion and bias. We also support numerous employee resource groups (ERGs), representing employees and allies from a broad array of historically underrepresented and/or marginalized communities.

We publish annually an Inclusion Report on our website, which provides a snapshot of representation within the Company, our progress to date and areas we are focused on for improvement. We also publish our U.S. Employer Equal Opportunity data (EEO-1 data) reaching back to our 2014 filing.

Environment

In 2022, Netflix further advanced our corporate sustainability goals through a variety of initiatives. We (a) continued to optimize, electrify and decarbonize energy use in productions, (b) brought remaining unabated emissions to zero by investing in the power of nature to capture carbon, (c) supported self-managed productions in including at least one electric vehicle on screen, culminating in a Super Bowl advertisement from GM in 2023, and (d) expanded the Netflix Sustainability Stories collection to over 200 films and TV series from every genre.

Transparency

We are committed to continued stockholder engagement and transparency and provide comprehensive information about our ESG initiatives and activities on our Investor Relations website. In response to input from our stockholders, we began publishing in 2020 an Environmental Social Governance report that covers our ESG performance for the prior year. We use the Sustainability Accounting Standards Board (SASB) reporting framework for the “Internet & Media Services” and “Media & Entertainment” industries. In 2022, in response to a stockholder proposal and interest from stockholders for more information about our political activities, we began publishing a report about our political contributions, which to date, have been limited. At last year’s annual meeting, stockholders approved on an advisory basis a proposal seeking additional information about our political activities. We then engaged with the proponent, Boston Common Asset Management, on the issues raised in last year’s proposal to align on our response. In collaboration with the proponent, we enhanced our political activities disclosure to address their concerns and fully implemented the proposal. The ESG Reports, Inclusion Reports, Political Activity Disclosures, EEO-1 data and other ESG information are available at ir.netflix.net.

Directors Standing for Election

Four directors, Mathias Döpfner, Reed Hastings, Jay Hoag and Ted Sarandos, are to be elected at the Annual Meeting. Unless otherwise instructed, the proxy holders will vote the proxies received by them for Messrs. Döpfner, Hastings, Hoag and Sarandos, each of whom is currently a director of the Company. If any of Messrs. Döpfner, Hastings, Hoag and Sarandos is unable or declines to serve as a director at the time of the Annual Meeting, the proxies will be voted for a substitute nominee designated by the Board to fill the vacancy. Each of Messrs. Döpfner, Hastings, Hoag and Sarandos has agreed to serve as a director of the Company if elected. Stockholders approved the management proposal to declassify the Board at the 2022 annual meeting of stockholders. As such, the term of the office of directors elected at this Annual Meeting will continue until the annual meeting of stockholders held in 2024 or until such director’s successor has been duly elected or appointed and qualified, or until their earlier resignation or removal, with the entire Board standing for annual election beginning in 2025.

Each nominee has extensive business experience, education and personal skills that qualifies him to serve as an effective Board member. The specific experience, qualifications and skills of Messrs. Döpfner, Hastings, Hoag and Sarandos are set forth below. The Nominating and Governance Committee evaluates potential candidates for service on the Board.

Required Vote

We have implemented majority voting in uncontested elections of directors. Our bylaws provide that in an uncontested election, each director will be elected by a vote of the majority votes cast, which includes votes to withhold authority but excludes abstentions. Abstentions and broker non-votes are not counted as votes cast and therefore will have no effect on determining whether the required majority vote has been attained.

Netflix Recommendation

		The Board unanimously recommends that the stockholders vote “FOR” the nominees listed above.

Who We Are

Board Overview

Our Board is composed of 12 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. As further discussed under “How We are Selected, Elected, and Evaluated—Consideration of Director Nominees—Director Qualifications,” the Nominating and Governance Committee considers a number of factors, including characteristics such as gender, race and national origin when evaluating potential Board candidates.

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

Board Diversity Matrix (as of April 21, 2023)

The following chart summarizes certain self-identified personal characteristics of our directors, in accordance with Nasdaq Listing Rule 5605(f). The Board Diversity Matrix for 2022 is available on our website at ir.netflix.net.

Our Directors

Directors standing for election:

Directors not standing for election:

Board Skills and Experience

Our Board believes that having a diverse mix of directors with complementary skills, experience, and expertise is important to meeting its oversight responsibility. That diversity, combined with transparent and broad access to information and exposure to management beyond the executive officers, allows the Board to exercise effective management oversight and to ensure the care of our shareholders’ interests. Below are a number of skills that our Board members bring to Netflix. If an individual is not listed under a particular attribute, it does not signify a director’s lack of ability to contribute in such area.

DIRECTOR INDEPENDENCE

The Board has determined that each of Messrs. Barton, Döpfner, Haley, Hoag, Masiyiwa and Smith, and Mses. Kilgore, Mather, and Sweeney 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. In addition, the Board determined that Mr. Belmer was independent during the time he served on the Board.

How We are Selected, Elected and Evaluated

Consideration of Director Nominees

Director Qualifications

In discharging its responsibilities to nominate candidates for election to the Board, the Nominating and Governance Committee has not specified any minimum qualifications for serving on the Board. However, the Nominating and Governance Committee endeavors to evaluate, propose and approve candidates with business experience, diversity, as well as personal skills and knowledge with respect to technology, finance, marketing, financial reporting and any other areas that may be expected to contribute to an effective Board. With respect to diversity, the committee may consider such factors as diversity in viewpoint, professional experience, education, international experience, skills and other individual qualifications and attributes that contribute to board heterogeneity, including characteristics such as gender, race, and national origin.

Identifying and Evaluating Nominees for Directors

The Nominating and Governance Committee utilizes a variety of methods for identifying and evaluating nominees for director. Candidates may come to the attention of the Nominating and Governance Committee through management, current Board members, stockholders or other persons. These candidates are evaluated at meetings of the Nominating and Governance Committee as necessary and discussed by the members of the Nominating and Governance Committee from time to time. Candidates may be considered at any point during the year.

The Nominating and Governance Committee considers properly submitted stockholder nominations for candidates for the Board. Following verification of the stockholder status of persons proposing candidates, recommendations are aggregated and considered by the Nominating and Governance Committee. If any materials are provided by a stockholder in connection with the nomination of a director candidate, such materials are forwarded to the Nominating and Governance Committee. The Nominating and Governance Committee also reviews materials provided by professional search firms or other parties in connection with a nominee who is not proposed by a stockholder.

Stockholder Nominees

The Nominating and Governance Committee considers properly submitted stockholder nominations for candidates for membership on the Board as described under “Identifying and Evaluating Nominees for Directors.” Any stockholder nominations proposed for consideration by the Nominating and Governance Committee should include the nominee’s name and qualifications for Board membership. In addition, they should be submitted within the time frame as specified under “Stockholder Proposals” and mailed to: Netflix, Inc., 121 Albright Way, Los Gatos, California 95032, Attention: Secretary, with a copy via email to stockholderproposals@netflix.com.

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 advanced 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

Each year, our Board conducts a self-evaluation process to help assure and enhance its performance. This process is overseen by the Nominating and Governance Committee, and 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.

How We Govern and are Governed

Our Approach to Corporate Governance

Corporate Governance Philosophy

Netflix operates in a highly competitive industry and has been in a state of constant innovation since inception. We have redefined how people watch video entertainment—first through DVD-by-mail, then streaming video, and now as one of the world’s leading entertainment services with approximately 231 million memberships in over 190 countries in 2022. We compete with a broad set of activities for consumers’ leisure time including linear TV, video games, and social media to name just a few—and that competition has only increased as this dynamic market continues to evolve and entertainment companies all around the world develop their own streaming offering.

Our corporate governance structure is built against this backdrop. Governance, in this context, means finding the right balance of rights and responsibilities among shareholders, the Board, and management, and ensuring that there are appropriate checks and balances in place. With the rapid evolution of technology and the changing media landscape, we are continually adjusting our service to meet the dynamic needs and desires of our consumers. Our governance structure is built to help us to do that.

At our 2022 annual meeting, the Netflix Board proposed and stockholders approved significant changes to our corporate governance structure. We implemented a phased-in declassification of our Board, with directors elected at this year’s annual meeting serving one-year terms and the entire Board standing for annual elections beginning in 2025 and beyond. We also eliminated supermajority voting provisions in our Amended and Restated Articles of Incorporation (the “Charter”) and our Amended and Restated Bylaws (the “Bylaws”), provided shareholders with the ability to call special meetings, and adopted a majority voting standard in uncontested director elections. We also adopted a market standard director resignation policy.

Corporate Governance Practices and Stockholder Rights

We believe that with our recent corporate governance changes, we are more aligned with standard large-cap governance structures and enhanced stockholder rights. We have the following corporate governance best practices and stockholder rights:

Stockholder Engagement and 2022 Stockholder Proposals

We are dedicated to engaging with our stockholders to solicit their views on a wide variety of issues, including corporate governance, environmental and social matters, executive compensation and other matters. Over the past several years, in response to stockholder feedback, and as part of our ongoing evaluation of best practices, the Board has incorporated enhancements to our disclosures and corporate governance practices as set forth below.

2022 Shareholder Proposals

At our 2022 annual meeting, stockholders presented two proposals for a vote. One proposal requested that we lower the two-thirds supermajority requirement for amending our Charter and Bylaws to a simple majority. Following last year’s annual meeting, the Board adopted amendments to our Charter and Bylaws to eliminate all supermajority voting provisions. The second proposal requested additional disclosure around political spending and received majority support from stockholders. We engaged with the proponent of the second proposal, Boston Common Asset Management, to receive feedback on how to improve our political activities disclosure and align on our response. In collaboration with the proponent, we updated our political activities disclosure to further describe management and Board oversight of political activities on a global basis; disclose trade associations, including international organizations, to which we have paid more than $25,000 in dues annually, and our review of trade association membership; and disclosed our approach to public policy. Boston Common acknowledged we fully implemented the proposal.

Compensation-focused Engagement following 2022 Annual Meeting

Following our 2022 annual meeting, we continued to engage with shareholders to solicit feedback and conducted two rounds of engagement—one in the summer of 2022 and one in early 2023. Cumulatively, we invited shareholders, representing over 57% of our shares outstanding as of December 31, 2022, including some of those who did not support our 2022 Say-on-Pay vote, to participate in calls. Members of the Netflix legal and investor relations teams met with 19 shareholders, representing approximately 51% of shares outstanding. Compensation committee members participated in a majority of these engagements, meeting with shareholders representing approximately 37% of our shares outstanding, and are scheduled to meet with shareholders representing approximately another 8% of our shares outstanding prior to our annual meeting (for a total director engagement of 45% of shares outstanding). Stockholders expressed appreciation for the Board’s responsiveness in the corporate governance changes implemented following the 2022 annual meeting. Our engagement discussions in 2022 focused primarily on our executive compensation program and potential changes. In response to these discussions and feedback, the Compensation Committee is evolving our executive compensation program to include a salary cap, a minimum stock option allocation with a one-year vesting period, and a performance-based cash bonus program for our co-Chief Executive Officers and Executive Chairman. A detailed discussion of our engagement with stockholders regarding our compensation program and changes for the 2023 compensation year are included in the Compensation Discussion and Analysis section.

Additional Engagement in Early 2023

We conducted another round of engagement with shareholders, as well as major proxy advisors, in early 2023. Discussions focused on executive succession planning, the co-Chief Executive Officer leadership structure, executive compensation program changes, board refreshment, and other ESG matters. Shareholders recognized the progress and efforts made in responding to the low Say-on-Pay vote in 2022. Investors inquired about the dual CEO model and the rationale for maintaining this leadership structure following Mr. Hastings’ transition to Executive Chairman. We explained that the Board regularly discusses executive succession, and the dual CEO model was a natural evolution of the working relationship among Reed Hastings, Ted Sarandos and Greg Peters. While the dual CEO model may be unconventional, the Board believes it is appropriate for Netflix and an effective leadership structure to support Netflix’s continued growth. Investors acknowledged Netflix’s unique culture and supported Mr. Hastings’ continued involvement with the Company, and none opposed the dual CEO model.

We also discussed the Board’s approach to board succession planning and refreshment, and some investors shared their expectations around board diversity, director commitments and tenure.

The Role of the Board in Risk Oversight

The Board’s role in our risk oversight process includes reviewing and discussing with members of management areas of material risk to the Company, including overall enterprise, strategic, operational, financial and legal risks. The Board oversees the Company’s ESG efforts, which includes human capital management, inclusion, diversity, sustainability and other matters. The Board also oversees succession planning. The Board receives regular updates from management, typically in the form of an interactive memo, where directors ask questions to management, and further discuss matters at meetings. Each of the committees oversee various ESG matters, depending on the specific issues. Committees report to the full Board regarding their respective considerations and actions.

Code of Ethics

We have adopted a Code of Ethics for our directors, officers and other employees. A copy of the Code of Ethics is available on our Investor Relations website at https://ir.netflix.net/governance/governance-docs/default.aspx. Any changes to or waivers of the Code of Ethics will be posted at that website.

How We are Organized

Board Meetings and Committees

The Board held four meetings during 2022. Each Board member attended at least 75% of the aggregate of the total number of Board meetings and meetings of the Board committees.

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. Mr. Belmer also served on the Compensation Committee until he resigned on October 27, 2022. 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 five meetings in 2022. Each member attended all the Compensation Committee meetings held during their tenure in 2022, other than Mr. Döpfner who did not attend one meeting.

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 https://ir.netflix.net/governance/governance-docs/default.aspx.

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 2022. Each member attended all of the Audit Committee meetings held in 2022.

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 https://ir.netflix.net/governance/governance-docs/default.aspx.

Nominating and Governance Committee

The Nominating and Governance Committee of the Board consists of three non-employee directors, Messrs. Hoag (Chair), Smith and Masiyiwa. Mr. Masiyiwa was appointed to the Nominating and Governance Committee in March 2022. Each director serving

on the Nominating and Governance Committee is independent under the listing standards of the Nasdaq Stock Market. The Nominating and Governance Committee reviews and approves candidates for election and to fill vacancies on the Board, including re-nominations of members whose terms are due to expire, and reviews and provides guidance to the Board on corporate governance matters. The Nominating and Governance Committee met two times in 2022. Each member attended all the Nominating and Governance Committee meetings held during their tenure in 2022.

The Board has adopted a written charter for the Nominating and Governance Committee, which is available on our investor relations website at https://ir.netflix.net/governance/governance-docs/default.aspx.

Compensation Committee Interlocks and Insider Participation

None of our executive officers serves on the board of directors or compensation committee of a company that has an executive officer that serves on our Board or Compensation Committee. No member of our Board is an executive officer of a company in which one of our executive officers serves as a member of the board of directors or compensation committee of that company.

In 2022, the Compensation Committee consisted of Messrs. Belmer (until October 27, 2022), Döpfner, and Haley, and Ms. Sweeney, none of whom is currently or was formerly an officer or employee of the Company. None of Messrs. Belmer, Döpfner, or Haley, or Ms. Sweeney had a relationship with the Company that required disclosure under Item 404 of Regulation S-K. In addition to Messrs. Belmer, Döpfner, and Haley, and Ms. Sweeney, our co-Chief Executive Officers and Chief Talent Officer participated in the executive compensation process for the year ended December 31, 2022 as described below in the section entitled “Compensation Discussion and Analysis.”

Policy Regarding Director Attendance at the Annual Meeting

Our policy regarding directors’ attendance at the annual meetings of stockholders and their attendance record at last year’s annual meeting of stockholders can be found on our Investor Relations website at https://ir.netflix.net/governance/governance-docs/default.aspx.

The Board’s Leadership Structure

Reed Hastings, the co-founder and former co-Chief Executive Officer and President of the Company, serves as the Executive Chairman of the Board. The Board believes that Mr. Hastings is best situated to serve as the Executive Chairman given his role as the founder and former Chief Executive Officer. He continues to be employed by Netflix and serves as a strategic adviser to the co-Chief Executive Officers. He is the director most familiar with our business and industry and is therefore best able to identify the strategic priorities to be discussed by the Board. The Board also believes that the Executive Chairman helps facilitate information flow between management and the Board and fosters strategic development and execution. The co-Chief Executive Officers also serve on the Board. The Board has appointed Jay Hoag as its lead independent director. As lead independent director, Mr. Hoag’s responsibilities include:

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, annual performance evaluations and regular executive sessions.

How to

Communicate

with Us

Communications with the Board

We provide a process for stockholders to send communications to the Board through the email address board@netflix.com. Information regarding stockholder communications with the Board can be found on the Company’s Investor Relations website at https://ir.netflix.net/governance/governance-docs/default.aspx.

How We are Paid

Our directors do 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 receives stock options pursuant to the Director Equity Compensation Plan. The Director Equity Compensation Plan provides for a monthly grant of stock options to each non-employee director of the Company in consideration for services provided to us and subject to the terms and conditions of our equity compensation plans.

We believe that for our Company, compensating directors only 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 2022.

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, 2022, other than Reed Hastings 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.

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, 2023. 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 2022 and 2021, fees for services provided by EY was 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 2022 and 2021.

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 2022, services provided by EY were pre-approved by the Audit Committee in accordance with this policy.

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 for ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2023. The vote is an advisory vote, and therefore not binding.

Netflix Recommendation

		The Board unanimously recommends that the stockholders vote “FOR” the ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2023.

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, 2022 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, 2022 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, 2022, 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 21, 2023 are as follows¹:

For more information about Messrs. Hastings, 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 on 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 and will hold an advisory vote on the frequency of the say-on-pay votes at this year’s Annual Meeting.

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 or overall Company performance.

The Compensation Discussion and Analysis also describes a number of changes to the executive compensation program for our co-Chief Executive Officers and Executive Chairman for the 2023 compensation year, which were adopted in response to the 2022 say-on-pay vote and stockholder engagement. These changes include: (1) a minimum 50% allocation of their allocatable compensation to stock options, (2) a salary cap of $3 million, in the case of the co-Chief Executive Officers, (3) the introduction of an annual performance-based cash bonus program under the Company’s Amended and Restated Performance Bonus Plan and (4) stock options granted to the co-Chief Executive Officers and our Executive Chairman will be subject to a one-year vesting period. The Compensation Committee believes these changes to our compensation structure align with stockholder interests and incentivize the co-Chief Executive Officers to execute on strategies aimed at achieving long-term success, while also maintaining aspects of our compensation program that we believe have helped attract and retain top talent to support our growth. At the time of the 2022 say-on-pay vote, the Compensation Committee had already approved the design of our 2022 executive compensation program. As such, all changes to the compensation program are for 2023, and we encourage stockholders to consider these changes in reviewing the say-on-pay proposal.

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.

Our Board of Directors proposes that stockholders provide advisory (non-binding) approval of the frequency of future advisory votes on compensation of our Named Executive Officers for upcoming annual meetings of stockholders. Stockholders may indicate whether they would prefer an advisory vote on Named Executive Officer compensation every one, two or three years. Stockholders may abstain by submitting a proxy card without instruction on Proposal Four or by checking the box labeled, “abstain.”

We are required by the Dodd-Frank Act to provide stockholders with a “say-on-pay” vote every one, two or three years, as determined by a separate advisory stockholder vote held at least once every six years. When stockholders last voted on the frequency of the say-on-pay vote in 2017, the Board recommended an annual vote, which the stockholders supported with approximately 91% of votes. The next stockholder vote on the frequency of the say-on-pay vote is expected to be held in 2029.

Required Vote

This matter is being submitted to enable shareholders to express a preference as to whether future advisory votes on Named Executive Officer compensation should be held every year, every two years, or every three years. The vote is an advisory vote and therefore non-binding. The provisions of our Bylaws regarding the vote required to approve a proposal are not applicable to this matter, but the option that receives the highest number of votes will be considered in determining how frequently the advisory vote on compensation of our Named Executive Officers occurs in the future.

Netflix Recommendation

		The Board unanimously recommends that the stockholders vote to hold say-on-pay votes every “ONE YEAR.”

A Message from the Compensation Committee Chair

We thank our shareholders who met with us to provide their open and candid feedback on our executive compensation program. At the 2022 annual meeting, only 26.9% of voted shares approved the compensation of our Named Executive Officers, which was substantially lower than prior years and both the Board and the Compensation Committee believe is unacceptable. Following the 2022 annual meeting, we engaged with investors with a specific focus on soliciting feedback on evolving our executive compensation program to address concerns while also maintaining aspects of our compensation program that we believe have significantly contributed to our success.

Investors’ opinions about our compensation program continued to vary. We heard concerns about executives’ ability to choose between cash and stock options and the possibility of executives choosing entirely cash (a feature that has been part of the program for well over a decade, helps us better compete for talent and is consistent with our company culture of freedom and responsibility), a desire for more performance-based compensation, as well as vesting criteria for stock options. The Compensation Committee considered a number of potential compensation program changes and solicited feedback from investors on the proposed approaches that might best address these concerns. Following these and other discussions, and consideration by the Compensation Committee of the shareholder feedback, we have introduced changes to our executive compensation program for 2023, which apply to our co-Chief Executive Officers and Executive Chairman. The changes, detailed in the following pages, include a salary cap, a minimum stock option allocation, an annual performance-based cash bonus program, and a one-year vesting period for stock options.

We continue to strongly believe that our compensation program’s design is a significant contributor to Netflix’s success, including our ability to attract and retain talent and to align executive and shareholder interests. The Compensation Committee will continue to engage with shareholders and consider their valuable feedback.

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

Tim Haley

Compensation Committee Chairperson

Our Company and 2022 Performance

Netflix is one of the world’s leading entertainment services with approximately 231 million paid memberships in over 190 countries. We had a bumpy start to 2022 but a brighter finish. We added approximately 9 million paid memberships in 2022 and achieved approximately $32 billion in revenue, representing 6% year-over-year growth. We manage our business for the long term with a focus on durable shareholder value creation.

In 2022, we continued to invest heavily in content to great success. As noted in our investor letters, some of our big hits included English TV shows like Stranger Things Season 4, Wednesday, Monster: The Jeffrey Dahmer Story, Bridgerton Season 2 and Inventing Anna—as well as Harry & Meghan, our second most successful documentary series ever. We took a big step forward with our original films slate delivering a wide variety of quality films, including big hits like The Adam Project, The Gray Man, Purple Hearts and Glass Onion: A Knives Out Mystery—as well as The Sea Beast and The Tinder Swindler, our most successful animated and documentary films, respectively. We continued to expand our local language content, which was not only impactful in the home country but was enjoyed around the globe, including seven of our Top 10 most popular non-English films ever—Troll (Norway), All Quiet on the Western Front (Germany), Black Crab (Sweden), Through My Window (Spain), The Takedown (France), My Name is Vendetta (Italy), and Loving Adults (Denmark); and two of our Top 10 most popular non-English TV shows ever—All of Us Are Dead and Extraordinary Attorney Woo, both from Korea. We are producing content from countries all over the world as we believe great stories can come from anywhere and can be enjoyed everywhere.

Stockholder Engagement and the 2022 Say-on-Pay Vote Result

At our 2022 annual meeting, 26.9% of voted shares approved the compensation of our Named Executive Officers. The Compensation Committee reviewed these voting results, recognized the importance of continuing to engage with shareholders to solicit feedback and better understand their concerns regarding our compensation program and took steps to evolve the compensation program in line with feedback received from shareholders.

Feedback from shareholders on our compensation program continued to vary. In particular, some shareholders expressed concerns regarding compensation magnitude, executives’ ability to choose between cash and stock options, including the ability to choose all cash compensation, the lack of traditional performance-based compensation, the use of stock options, and the lack of vesting criteria for such stock options, particularly for our co-Chief Executive Officers. Conversely, other shareholders supported and encouraged us to maintain our executive compensation program. Following our 2022 annual meeting, we discussed with shareholders potential changes to the executive compensation program. These shareholders broadly supported a minimum allocation to the stock option program, including a 50% threshold, to address the concern that compensation could be taken entirely in cash. Shareholders also supported a cap on annual salaries with a component of cash compensation to be performance-based. While shareholders varied on what vesting criteria should apply to stock options, they generally supported our move to a one-year vesting period for the options granted to our co-Chief Executive Officers and Executive Chairman.

Our Compensation Committee considered shareholders’ feedback in its deliberations regarding 2023 compensation and adopted several responsive changes to the compensation program discussed below. In evolving the executive compensation program, the Compensation Committee aimed to balance addressing shareholders’ concerns while also being mindful that other shareholders have supported and encouraged us to maintain the existing program. The Compensation Committee believes these changes to our compensation structure align with shareholder interests and incentivize the co-Chief Executive Officers to execute on strategies aimed at achieving long-term success, while also maintaining aspects of our compensation program that we believe have helped attract and retain top talent to support our growth.

We met with investors again in early 2023 to solicit feedback on our executive compensation program changes and discuss other ESG matters, including executive succession planning. Shareholders acknowledged the progress and efforts made to respond to the low Say-on-Pay vote and expressed appreciation for our responsiveness. The rationale for the executive compensation program changes was also discussed. Shareholders were largely supportive of the compensation program changes, particularly the minimum stock option allocation and the addition of performance-based compensation. Some shareholders expressed a desire for longer performance periods while others noted that one-year performance periods were appropriate. Some shareholders expressed concerns regarding compensation magnitude. Shareholders asked about the performance metrics to be used, stock ownership guidelines and consideration of using performance-based equity awards other than stock options to ensure long-term alignment with shareholders.    

The Compensation Committee greatly values the engagement with our shareholders and will continue to consider feedback in its ongoing executive compensation decisions.

Key Changes to the 2023 Compensation Program

At the time of the Say-on-Pay vote in 2022, the Compensation Committee had already approved the design of our 2022 executive compensation program. As such, all changes to the compensation program are for 2023. The following compensation program changes apply to our co-Chief Executive Officers, Ted Sarandos and Greg Peters, and Executive Chairman, Reed Hastings: (1) a minimum 50% allocation of their allocatable compensation to stock options, (2) a salary cap of $3 million, in the case of the co-Chief Executive Officers, (3) the introduction of an annual performance-based cash bonus program (the “Bonus Program”) under the Company’s Amended and Restated Performance Bonus Plan (the “Bonus Plan”) and (4) stock options granted to the co-Chief Executive Officers and our Executive Chairman will be subject to a one-year vesting period.

The Bonus Program aims to align pay for performance, by awarding cash bonuses only upon the achievement of defined performance targets. We believe this aligns our co-Chief Executive Officers’ compensation with the Company’s financial performance and the interests of our stockholders. The Compensation Committee administers the Bonus Program, including determining the cash bonus amounts, financial performance periods, performance metrics and other criteria. The portion of the allocatable compensation not allocated to stock options and in excess of the applicable salary cap is subject to the Bonus Program. In 2023, Mr. Sarandos and Mr. Peters are participating in the Bonus Program. Mr. Hastings is not participating in the Bonus Program because, in connection with his transition to Executive Chairman, his allocatable compensation was reduced to $3 million, of which $2.5 million was allocated to stock options. Following this transition and related reduction in compensation, total allocatable compensation for Messrs. Hastings, Sarandos and Peters as a group decreased by $21 million or 21% year over year.

During the first quarter of 2023, the Compensation Committee chose FX neutral revenue and FX neutral operating margin achieved in the fiscal year ending December 31, 2023 as the financial performance metrics for the 2023 Bonus Program. 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. Additional information regarding 2023 executive compensation, including the 2023 Bonus Program and the specific targets they were measured against, will be included in our proxy statement for our 2024 annual shareholders’ meeting. Following the completion of the 2023 fiscal year, the Compensation Committee will certify the Company’s actual performance and determine the bonuses payable to Mr. Sarandos and Mr. Peters.

In making these changes, the Compensation Committee sought to maintain some personal choice – which it continues to believe is a differentiating feature that is core to our talent attraction and retention strategy – while also being responsive to shareholder concerns. This is achieved by allowing the executive officers continued flexibility to choose among cash salary and stock options, and in the case of the co-Chief Executive Officers, the annual performance-based cash bonus within the new parameters introduced. The Compensation Committee considered and determined that for 2023, it would maintain the compensation program for the remaining Named Executive Officers to maximize flexibility and personal choice and to remain competitive in attracting and retaining top talent. The Compensation Committee will continue to set a dollar-denominated annual compensation amount for each Named Executive Officer (“allocatable compensation”), who can then choose to allocate a portion of that compensation amount toward stock options or cash compensation.

2022 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, 2022:

We believe the Co-CEO structure provides broad expertise and deep leadership at the highest level of the Company and provides an efficient and effective leadership model to support our future growth.

Compensation Philosophy

We aim to provide highly competitive compensation packages for all our key positions, including our Named Executive Officers. We operate in a highly dynamic industry where the market for talent is extremely competitive. We rely on our Named Executive Officers to execute on the Company’s strategies and initiatives for long-term success. To attract and retain top talent, we believe we must provide highly competitive compensation packages. As such, our compensation practices are also 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 Committee aims for the compensation program to be simple to understand and administer, to be transparent to both stockholders and executive officers, and to create a long-term alignment between our stockholders and our executive officers. Individual compensation is linked to Company performance by virtue of the stock options we grant.

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 compensation program, including changes in how compensation is determined and awarded.

2022 Compensation Program Overview

Our long-term success depends on our continued ability to innovate and create opportunities for our members to engage. We push forward the boundaries of our industry and do not believe success can be measured by any specific isolated performance metric. A combination of long-term financial, strategic and operational achievements has to occur for our stock price to appreciate meaningfully to deliver value to our executives. The current program design incentivizes the spirit of creativity and innovative achievements that are at the foundation of our long-term success.

The key elements of our compensation program for 2022, applicable to the majority of our employees, including our Named Executive Officers, and how they align with our compensation philosophy are as follows:

For example:

If our stock price is $300 on the date of grant and the recipient allocated $1,200 per month of their allocatable compensation to stock options, the recipient would receive 10 stock options with an exercise price of $300.

The stock price would need to rise to $420 (40% appreciation from $300) for the recipient to earn back the $1,200 of cash they traded for the options:

$420 - $300 = $120 x 10 shares = $1,200

Anything below a 40% appreciation in the stock means that the employee would have been better off electing cash. We believe that this structure and the corresponding trade-off of current cash compensation for longer-term appreciation potential significantly aligns our employee interest with that of our stockholders.

The chart below demonstrates how this options formula necessitates meaningful performance for employees to realize value by illustrating the relationship between the value of $1,200 worth of compensation if the employee elects cash (the red line), compared to 10 stock options under our program (the green line).

In 2022, each Named Executive Officer elected to allocate a portion of their annual compensation to our stock option program. Reed Hastings, our co-Chief Executive Officer in 2022 allocated 98% of his annual compensation toward our stock option program, Ted Sarandos, our co-Chief Executive Officer allocated 50% of his annual compensation toward our stock option program, and the average election across our Named Executive Officers was 48%.

Dilution, Burn Rate and Equity Overhang

The Compensation Committee, with the assistance of its compensation consultant, Compensia, reviews the Company’s compensation program annually, including the stock option program to ensure that we balance our employee compensation objectives with our stockholders’ interests. The Compensation Committee regularly reviews the proportion of our total shares outstanding used annually for the stock option program (our “burn rate”), the potential voting power dilution to our stockholders (our “equity overhang”), and the average value of the stock options granted to employees, each in relation to the companies in our compensation peer group. The following table provides detailed information regarding our burn rate and equity overhang for 2020, 2021 and 2022.

Our burn rate was significantly lower than industry thresholds established by certain major proxy advisory firms, and has historically been well below the median burn rate of our compensation peer group, including in 2020 and 2021. We have yet to analyze the 2022 burn rate of our peers.

Determining Executive Compensation

We aim to pay employees at the top of their personal market. We believe this helps us attract and retain the most talented employees from around the globe. To establish the top of personal 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 executive officers

Each of our co-Chief Executive Officers, in consultation with our Chief Talent Officer, reviews market compensation information prepared by Compensia for each of the other Named Executive Officers. The co-Chief Executive Officers then make a recommendation to the Compensation Committee regarding compensation for the other Named Executive Officers. The Compensation Committee reviews and discusses this information and the recommendation by the co-Chief Executive Officers, and then determines a dollar-denominated amount available for allocation to salary and stock options for each such Named Executive Officer, as it deems appropriate. The Compensation Committee also approved the stock option allocation amount for each Named Executive Officer for their 2022 compensation.

Our co-Chief Executive Officers’ compensation is determined by the Compensation Committee outside the presence of the co-Chief Executive Officers. The Compensation Committee’s decision regarding compensation for the co-Chief Executive Officers is based on the philosophy described above. It includes 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-Chief Executive Officers in developing the business strategy for the Company, the Company’s performance against this strategy, and the co-Chief Executive Officers’ ability to attract and retain senior management. In establishing each co-Chief Executive Officer’s compensation, the Compensation Committee is also mindful of the results of the Say-on-Pay vote for the prior year and any input received from shareholders.

Compensation for any given year is generally established at the end of the prior year. The 2022 compensation for our Named Executive Officers was determined at the end of 2021.

Role of the compensation consultant

In determining compensation for 2022, the Compensation Committee retained Compensia, a national compensation consulting firm, as its independent compensation consultant to advise on executive and director compensation matters. Compensia provided various services to the Compensation Committee during 2022, 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 executive compensation program changes for 2023; 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.

Peer group and benchmarking

The Compensation Committee works with Compensia in determining an appropriate peer group of companies each year. After review of the criteria used to evaluate current and potential peer companies, no changes were made to the peer group from 2021. We retained Warner Bros. Discovery following Discovery, Inc.’s combination with AT&T’s WarnerMedia business. The compensation peer group for 2022 was composed of the following companies:

2022 Netflix Peer Group

With respect to each of our Named Executive Officers, in determining compensation, the Compensation Committee considered our compensation philosophy as described above, comparative market data and specific factors relative to each Named Executive Officer’s responsibilities and performance. We do not specifically benchmark compensation for our Named Executive Officers in terms of picking a particular percentile relative to other individuals with similar titles at peer group companies. The Compensation Committee believes that many subjective factors unique to each Named Executive Officer’s responsibilities and performance are not adequately reflected or otherwise accounted for in a percentile-based compensation determination.

Elements of Executive Compensation

For 2022 compensation, we used only salary and stock options, augmented by very limited perquisites, to compensate our Named Executive Officers. Across the broader employee base, we also use salary and stock options as our key compensation components to remain competitive within the marketplace. Similarly situated companies typically offer employees an equity component as part of their overall compensation package and as such, we believe it is important to provide this opportunity to our employees, including our Named Executive Officers. By permitting employees to request a customized combination of salary and stock options, we endeavor to tailor individuals’ compensation to their personal compensation preferences and thereby offer a more compelling compensation package than those with whom we compete for talent.

Cash Compensation

As described above, our 2022 compensation program offered our Named Executive Officers the opportunity to select the proportion of cash and equity compensation they receive each year. While our Named Executive Officers generally have elected to receive a significant portion of their compensation in equity, the remaining compensation is paid in cash in the form of salary.

Stock Options

We believe that equity ownership, including stock and stock options, helps align the interest of our Named Executive Officers with those of our stockholders and links executive compensation to long-term Company performance.

Furthermore, because the stock options are granted at the fair market value of our common stock on the date of the option grant and are not generally transferable, they are only of value to the recipient if the market value of our common stock increases after the date of grant, thereby directly linking compensation in the form of stock options to Company performance.

Granting options on a monthly basis provides employees with a “dollar-cost averaging” approach to the price of their option grants. By granting options each month rather than on a less frequent basis, we believe it alleviates to a great extent the arbitrariness of option grant timing and the potential negative employee issues associated with “underwater” options.

Stock options granted in 2022 were vested upon grant and are exercisable for up to ten years following grant regardless of employment status. As discussed above, the stock price needs to appreciate at least 40% before an employee is better off allocating cash to stock options. We believe this serves as de facto vesting criteria and aligns employees’ and stockholders’ interests. We believe that the ten-year life of the options enhances their value for each employee and thereby encourages equity ownership in the Company, which is helpful in aligning employee and stockholder interests. We do not believe that expiration of options closely following employment termination has a desirable impact on employee retention. Rather, we believe that creating and maintaining a high-performance culture and providing highly competitive compensation packages are the critical components for retaining employees, including our Named Executive Officers.

Empirically, stock options have proven to be an effective way of creating long-term alignment between executives and stockholders. Even though the options are vested upon grant, our Named Executive Officers often do not exercise their options for an extended period of time.

Other Components of Compensation

In 2022, each Named Executive Officer was eligible to receive an additional $16,000 in annual compensation that may be used to defray the cost of health care benefits previously paid by us on the same basis as other employees. Any portion of this allowance not utilized toward the cost of health care benefits will be paid as salary, up to a maximum of $5,000.

In addition to base salary and stock options, certain eligible U.S. employees, including our Named Executive Officers, 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. Neumann, Sarandos, and Hyman all participated in this program in 2022 and therefore we matched their 401(k) contributions as shown in the compensation tables of this Proxy Statement.

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 of these perquisites are reflected in the “All Other Compensation” column of the Summary Compensation Table.

Executive Compensation Allocations for 2022

Compensation for a given year is generally established at the end of the prior year. As such, 2022 compensation for our Named Executive Officers was determined at the end of 2021. Throughout 2021, the Named Executive Officers executed on our long-term strategy, adding 18 million paid memberships in 2021 and achieving approximately $30 billion in revenue, representing

19% year-over-year growth from 2020. Our profitability also improved in 2021, with operating income rising 35% year-over-year while operating margins increased from 18% to 21% compared to 2020. We also invested heavily in content with great success. Some of the biggest hits in 2021 included new series like Squid Game, Maid and Lupin, and returning shows such as The Witcher, You, La Casa de Papel (aka Money Heist), and Sex Education, as well as films like Red Notice and Don’t Look Up. In 2021, we also added mobile games to our service.

In 2022, we permitted our Named Executive Officers to allocate their compensation between cash and stock options. Our Named Executive Officers continue to express their confidence in the Company and our growth strategy by electing to receive a significant percentage of their compensation through at-risk stock option awards. These elections are made prior to the compensation year and are irrevocable. For 2022, the following elections were made by our Named Executive Officers:

While the total annual stock option allocation is expressed in a dollar denomination, we use the total annual stock option allocation only to calculate the number of stock options to be granted. The total annual stock option allocation is not available to the employees as cash compensation, except where an employee who has allocated a portion of their compensation toward stock options receives severance payments and as otherwise set forth in our Amended and Restated Executive Severance and Retention Incentive Plan (the “Severance Plan”).

In determining the compensation of our Named Executive Officers for 2022, in consultation with Compensia, the Compensation Committee considered the philosophy described above, including the top of personal market compensation approach. The following factors were considered for each Named Executive Officer:

Individual employee performance, including that of our Named Executive Officers, is evaluated on an ongoing basis. To the extent such performance exceeds or falls short of our performance values, we may take action that includes, in the case of star performers, promotions or increases in compensation or, in the case of underperformers, demotion, a reduction in compensation or termination.

In 2022, the compensation components for our Named Executive Officers were as follows. Please see the Summary Compensation Table provided in this Proxy Statement for a complete description of the compensation of our Named Executive Officers:

Method for determining monthly stock option grants

After the total annual stock option allocation is established, our Named Executive Officers receive monthly option grants pursuant to our monthly stock option program, which is applicable to the majority of our employees. Under this program, eligible employees, including our Named Executive Officers, receive on the first trading day of the month fully vested options granted at fair market value as reflected by the closing price of our stock on the date of the option grant. The number of stock options granted monthly fluctuates based on the closing price of our stock on the date of the option grant.

In 2022, the actual number of options granted to our Named Executive Officers each month was determined by the following formula: (The amount of an employee’s total annual stock option allocation/12) / ([the closing price of our stock on the date of option grant] x 0.40).

For stock option accounting purposes, the dollar values of stock options granted by the Company, as reflected in the Summary Compensation Table are different than the dollar values of the total annual stock option allocation in the table above. The difference arises as the stock option allocation in the table above is the amount used to determine the number of options granted, whereas the dollar values of stock option grants in the Summary Compensation Table reflects their grant date fair value under generally accepted accounting principles in the U.S.

Named Executive Officer Compensation for 2023

Allocatable compensation for our Named Executive Officers in 2023 was determined in consultation with Compensia. For the fiscal year ending December 31, 2023, the compensation components for our Named Executive Officers serving in 2022 are being allocated as follows, based on the methods described above. In January 2023, Reed Hastings transitioned from co-Chief Executive Officer to Executive Chairman, and Greg Peters was promoted to co-Chief Executive Officer and President. The Compensation Committee adjusted Reed Hastings’ and Greg Peters’ compensation in connection with these executive transitions, as reflected below. Allocatable compensation for our other Named Executive Officers remained flat as compared to 2022. As discussed above, we have adopted the following changes to the 2023 compensation program for the co-Chief Executive Officers and Executive Chairman: (1) a minimum 50% allocation of the officer’s allocatable compensation to stock options, (2) a salary cap of $3 million in the case of the co-Chief Executive Officers, (3) a portion of allocatable compensation not allocated to stock options and in excess of the applicable salary cap will be subject to the Bonus Program with the estimated target bonus levels indicated below, and (4) the stock options will be subject to a one-year vesting period.

Termination-Based Compensation and Change in Control Retention Incentives

Our Named Executive Officers are beneficiaries of our Severance Plan. Under this Severance Plan, each employee of the Company at the level of Vice President or higher (“Covered Executive”) is entitled to a severance benefit upon termination of employment (other than for cause, death or permanent disability) so long as they sign a waiver and release of claims in a form reasonably satisfactory to the Company.

In 2022, the severance benefit consisted of a lump sum cash payment equal to 12 months of allocatable compensation, or, for newly-hired Covered Executives only, a cash payment equal to 36 months of allocatable compensation, which is reduced by an amount equal to one month of allocatable compensation for each month of tenure at the Company for the first 24 months of continuous employment following hire by the Company, such that the minimum benefit for such newly hired Covered Executives is the cash equivalent of 12 months of allocatable compensation. The Severance Plan also provides discretion to the plan administrator to provide a severance benefit that is different than the standard 12 months of allocatable compensation, so long as

the benefit is no less than 12 months. The right to receive a severance benefit terminates upon a change in control transaction, so that the Covered Executives under the Severance Plan are not entitled to both a change in control benefit as well as a severance benefit.

In lieu of the severance benefit described above, the Severance Plan provides that eligible employees covered by the Severance Plan who are employed by the Company on the date of a change in control transaction are entitled to receive a lump sum cash payment equal to 12 months of allocatable compensation regardless of whether their employment terminates.

We have a “single trigger” change in control benefit for our executive officers. We use a single trigger change in control benefit because we believe that double trigger benefits, which require the occurrence of both a change in control and the executive’s termination of service from the Company for an executive to receive severance, creates a misaligned incentive for executives to attempt to be terminated from the Company in the event of a change in control. We would rather encourage our executives to continue to focus on the long-term success of the Company and retain their service with the Company instead of their individual severance opportunities.

The benefits owing under the Severance Plan are to be paid to an individual covered under the applicable plan by the Company as soon as administratively practicable following the completion of all conditions to the payment, but in no event more than two and one half months following the date of the triggering event. We believe that benefits under the Severance Plan are consistent with similar benefits offered to executive officers of similarly situated companies and moreover, the Severance Plan is an important mechanism for attracting and retaining outstanding performers. Each of the terms “allocatable compensation,” “cause” and “change in control” are defined in the Severance Plan, a copy of which is attached as Exhibit 10.1 to the Company’s Form 10-Q filed on April 21, 2023.

The Bonus Plan provides for a prorated bonus in the event of an involuntary termination (other than for cause) based on the number of calendar days a participant was actively employed during a given performance period. Each of the terms “cause,” “participant” and “performance period” are defined in the Bonus Plan, a copy of which is attached as Exhibit 10.1 to the Company’s Form 8-K filed on December 9, 2022.

Tax Considerations

Section 162(m) of the Internal Revenue Code (“Section 162(m)”) was among the provisions that were amended pursuant to The Tax Cuts and Jobs Act (the “Tax Act”), which was signed into law on December 22, 2017. The prior version of Section 162(m) generally disallowed a tax deduction for compensation that we paid to our Chief Executive Officer or any of the next three most highly compensated executive officers (excluding the Chief Financial Officer) to the extent that the compensation for any such individual exceeded $1 million in any taxable year. However, this deduction limitation did not apply to compensation that was “performance-based” under Section 162(m). The Tax Act amended Section 162(m) to eliminate the exception for performance-based compensation. As a result, effective for our 2018 fiscal year and thereafter, the maximum U.S. federal income tax deduction that we may receive for annual compensation paid to any officer covered by Section 162(m) is $1 million per officer, subject to a transition rule that is described below.

The Tax Act also expanded the individuals covered by Section 162(m), which now includes the Chief Executive Officer, Chief Financial Officer, the three most highly compensated officers and any former covered employee for any taxable year beginning after December 31, 2016. Separately, the Tax Act included a transition rule with respect to compensation that is provided pursuant to a written binding contract in effect on November 2, 2017 and not materially modified after that date. We continued to grant stock options in 2022, although the compensation income recognized upon exercise of such grants by individuals covered by Section 162(m) will not be deductible by us to the extent the total compensation for each such individual exceeds $1 million in the year in which the stock options are exercised. Additionally, cash payments made under the Bonus Plan to individuals covered by Section 162(m) will not be deductible by us to the extent that the total compensation for each such individual exceeds $1 million in the applicable year.

The Compensation Committee considers the tax impact of the Company’s compensation program, and will generally seek to preserve the deductibility of any performance-based compensation that is subject to the transition rule of the Tax Act, to the extent practicable and in the best interests of the Company and its stockholders. However, to maintain the flexibility to provide compensation programs for our Named Executive Officers that will best incentivize them to achieve our key business objectives, the Compensation Committee reserves the right to pay compensation that is not tax deductible.

Prohibition on Hedging

Our Insider Trading Policy prohibits our section 16 officers and directors from engaging in any transactions involving any hedging or derivatives of Company equity securities, including trading in futures and derivative securities and engaging in hedging activities relating to our securities (including forward sales contracts, equity swaps, collars, puts, calls, exchange traded options and exchange funds), or otherwise engaging in transactions that are designed to hedge or offset decreases in the market value of our equity securities, provided that it does not limit director and officer participation in our stock option program. This prohibition applies only to transactions initiated on or after March 4, 2020 and applies to Company equity securities that are (i) granted to the section 16 officer or director by the Company as part of their compensation or (ii) held, directly or indirectly, by the section 16 officer or the director.

Clawback of Performance-Based Awards

The Netflix, Inc. 2020 Stock Plan allows us to recover certain performance-based equity awards or amounts paid in respect of such awards in the event of certain acts of misconduct by award recipients. Such misconduct generally relates to contributing to or failing to take reasonable steps to prevent an accounting restatement due to material noncompliance with financial reporting requirements. Further the Amended and Restated Performance Bonus Plan provides that awards may be subject to recoupment policies of the Company, as applicable.

On October 26, 2022, the SEC adopted final rules implementing the incentive-based compensation recovery provisions of the Dodd-Frank Act. The Company intends to review and revise its current recoupment policies and/or adopt a new recoupment policy, to comply with the new requirements, once the Nasdaq listing standards become effective.

Compensation Risk

Our compensation policies for non-executive salaried employees are generally the same as those outlined for our Named Executive Officers. Given the design of our compensation structure, as detailed in the foregoing Compensation Discussion and Analysis, we do not believe that our compensation policies and practices are reasonably likely to have a material adverse effect on the Company.

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, 2022.

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 2022, 2021, and 2020. A description of the method for determining the amount of salary in proportion to total compensation is set forth above in “Compensation Discussion and Analysis.”