Netflix CEO earned $9.3 million for being a giant screw-up last year

If you remember the name Reed Hastings, it’s probably from those videos he made last year explaining why Netflix was splitting into two companies for DVD and streaming, giving the new one the torn-from-1998 name “Qwikster.” He later had to scrap the plan, which was a shame, because I really believed him when he said “We chose the name Qwikster because it refers to quick delivery. ” As a result, the company’s stock fell 77% from July to the end of 2011. Anyway, that guy earned $9.3 million last year, up 68% from the year before. Must be nice.

Hastings’ 2011 salary was $500,000, virtually the same as in 2010. However, the value he realized from exercising stock options grew to $8.8 million from $5 million. His total compensation for the year was just under $9.3 million, compared with $5.5 million in 2010 [a 68% increase].
Subscriber losses and strategic missteps will result in a pay cut this year. Netflix noted in its filing that 2012 “compensation for Mr. Hastings has been reduced in light of the Company’s performance in 2011.” As a result, the initial value of his stock option allowance — the final value of which is realized when he exercises them — was cut in half from $3 million in 2011 to $1.5 million this year. Hastings’ salary will remain the same.
The Los Gatos, Calif., company lost 800,000 U.S. subscribers during the third quarter and its stock fell 77% from July to the end of 2011. It gained back 610,000 subscribers during the fourth quarter, however, and Netflix shares are up more than 50% so far this year.
All of Netflix’s senior executives except the CEO will receive pay increases in 2012, leaving Hastings as the only one to take a hit for the company’s missteps last year. [LATimes]

If my math serves, and I’m sure it doesn’t, that means the value of the company is still down 27% from last July, and all the execs except Reed are still getting raises. You can’t see it, but the invisible hand of the market is totally dismissively wanking right now.