And more importantly, how do you decide what the %age should be? The Netflix stock options program seems pretty unique, so I'm wondering how you figure this number. Edit: this is the program I'm referring to: http://benefits.netflix.com/financial-benefits/stock-option-program
My guess is OP is talking about something like an employee stock purchase plan where they have the option to buy Netflix shares at a discount. It’s not you need to Netflix, salesforce offers the same thing and I know other companies do as well
Netflix allows people to defer a portion of their salary for discounted stock options, not shares of stock (which is what ESPP does).
@vs35deu No it’s not “deferred”(actually nothing is deferred at Netflix, including 401k match), it’s vested in each of your paycheck.
Just to clarify, there are two parts in the Netflix Stock Option Program, one is your base salary * 5% / (stock price * 40%) which is given to you for free in addition to you base salary, the other part is you have the freedom to decide what portion of you base salary you want to be paid in the form of stock option(also calculated at 40% of the stock price), you can opt in from 0% of your base salary up to 100% of your salary, which means you will be paid zero dollar but you will hopefully get tons of stock options
What’s the expiration of such options?
10 yrs
I vary each year from around 10% all the way up to 40% of my total Comp towards Netflix stock options.
How do you determine what percentage you use every year? Is it mostly to fall in a lower tax bracket based on your pre-tax contributions towards supplemental allocation?
No, it’s based on how much income I need in a particular year. Kids, house, cars, etc all play a role.
That sounds very generous compared t ESPP plans at other companies- up to 10-15% of your salary at 15% off
We don’t have espp. We get stock options that are worth nothing the day you receive them, which is the 1st weekday of each month.
I recently started exploring Amazon Prime video and I am left wondering - how long can the Netflix juggernaut continue ? I have been a long time Netflix subscriber but now having thoughts about Amazon Prime - rates are almost the same
Also revenues are high but they are also offset by high costs , resulting in low income
Did you see the news today?
Can you just turn around and sell your 10yr options when they are granted and pocket the difference or do you have to exercise it? It seems like they is such a large rebate to the fair market value of the option that it would be another way to make money, but I assume there are protections against that?
The options granted to employees are buy call
I meant to sell the calls instead of exercising them. If the calls are worth 80% of the strike price and netflix sells them to you at 40% of the strike price, it seems you could turn around and sell them to someone else for 80% of the strike price . I was wondering if anything prevented you from doing that.
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Could you describe the program for those of us who don't know?
Just edited main post, but this: http://benefits.netflix.com/financial-benefits/stock-option-program