Full article: http://bit.ly/tywXin

We seldom see stories about pay for performance being used to ct CEO pay.  Netflix saw fit to cut their CEO's stock option grant for the upcoming year by 50%. The assumption is that this has something to do with:

1. Admitted mismanagement of the mid-year price increase and branding


2. Subsequent free-fall of the company's stock price

Of course with the stock price being down by about 75%, the stock options have far greater potential value if the prices rebounds. Still, better balance that simply ignoring what happened this year.

Personally, I would have added either a price hurdle to the options, or awarded performance units with metrics based on increasing membership and stock price.

Dan