As Netflix Inc. keeps growing its reach and subscribers, it also keeps growing its median employee pay.
When compared to all of the top public U.S. media companies by market capitalization, Netflix led its peers with the highest median employee compensation at $219,577 in 2020, up from $202,931 a year earlier. In its proxy statement, Netflix stated that it annualized the compensation of full-time and part-time employees who were not employed at the company for all of 2020. For employees outside the U.S., Netflix converted their compensation to U.S. dollars using the applicable average exchange rate for 2020.
Netflix co-CEO Reed Hastings received a compensation package of $43.2 million and Ted Sarandos, who became Netflix co-CEO in June 2020, received a compensation package of $39.3 million. The average of the two CEO salaries creates a CEO to median employee pay ratio of 188x, well below the median ratio among top media companies of 263.5x.
The U.S. Securities and Exchange Commission during the 2018 shareholder meeting season began requiring public companies to disclose how CEO compensation compares with that of their employees. This is the fourth year of such disclosures. Notably, differing employee demographics, such as the location of the workforce and the role a company chooses for its median employee, make like-for-like pay ratio comparisons between companies difficult.
Charter Communications Inc. had the largest CEO to median employee pay ratio among top media companies in 2020 at 687x. CEO Tom Rutledge has been in the position since 2012 and received a salary of $38.9 million in 2020. His total pay was boosted by a grant of $30.0 million in option awards tied to a new employment agreement signed in October 2020. The new agreement extends Rutledge's employment with Charter through the end of 2024. In 2018 and 2019, Rutledge's salary ranged from $8 million to $9 million.
The median worker at Charter was paid $56,568 in 2020. Charter used workers employed as of Dec. 31, 2020, to calculate median employee pay, according to Charter's proxy statement. "No adjustments were applied to W-2 Box 1 income for purposes of determining the median employee, such as for employees who were employed for only part of the year or on unpaid leave of absence at some point during the year," the proxy statement read.
Altice USA Inc. reported the second-highest CEO to median employee pay ratio. Altice CEO Dexter Goei received $48.0 million in compensation and the median employee received $74,615, creating a CEO to median employee pay ratio of 644x. Altice excluded 296 employees working outside of the U.S. from calculations.
Of the top 20 media companies, The New York Times Co. had the smallest CEO pay ratio. The company calculated the ratio by annualizing CEO Meredith Kopit Levien's salary since she took over the role in September 2020. Kopit Levien was said to have had a salary of $4.5 million for the purposes of this calculation. The median employee earned $159,509, creating a CEO pay ratio of 29x. The New York Times used approximately 4,500 full-time, part-time, casual and temporary workers across the world to calculate median employee income. It did not annualize wages for employees who worked at the company for less than a full calendar year.