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Examining the Net Worth of Netflix Co-founder Reed Hastings

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Aug 27, 2024 / 903 Views

The world of entertainment today cannot be talked about without the mention of Netflix. If there’s one person who will be remembered for making history with the introduction of this streaming platform, it’s Reed Hastings. He is, after all, the co-founder of Netflix, which is the world’s biggest streaming platform with close to 270 million subscribers globally. Its tremendous success has not only altered the dynamics of entertainment but has also massively boosted the net worth of its co-founder.

As of mid-2024, Netflix has over 18,000 titles, spanning movies, TV shows, documentaries, anime and more. It is available in over 190 countries around the world, each country having its own catalogue of original and licensed Netflix content.

The growth of the American streamer has been phenomenal. In its most recent quarter, Q1 2024, the streaming giant posted a revenue of USD 9.37 billion, marking a 14.8 per cent year-over-year growth. Its earnings per share (EPS) beat estimates of USD 4.52 to clock USD 5.28, indicating that the market is extremely favourable to Netflix and there are still a lot of expectations from the company. No wonder then that it has been the best-performing stock in the last decade.

And all of this is due to the vision of Reed Hastings, who has been serving as the company’s executive chairman since early 2023.

All about Reed Hastings: Building Netflix and his net worth

Early life before Netflix

Reed Netflix chairman — Image: Courtesy of Reed Hastings/@reedhastings/X

Born on 8 October 1960 in Boston, Massachusetts, Hastings graduated with a bachelor’s degree in mathematics at Bowdoin College in Brunswick, Maine, in 1983. After a few years serving in the US Marine Corps and Peace Corps abroad, he enrolled at Stanford University where he graduated in 1988 with a master’s degree in computer Science.

In 1991, a few years after working for different companies, Hastings founded Pure Software. It went public in 1995 and merged with Atria to create Pure Atria Corporation a year later. In 1997, the company was sold to Rational Software for USD 750 million — the biggest acquisition in Silicon Valley at the time.

Creation and rise of Netflix

Everything that Reed Hastings is today is due to Netflix, a company he co-founded with Marc Randolph, former marketing director of Pure Atria, in 1997.

Apparently, Hastings got the idea of a subscription-based movie rental service after he was charged a huge late fee by the Blockbuster rental store for delaying the return of a movie he had rented. Netflix began operations as a mail-order DVD rental service in 1998.

Two months after its launch, Amazon founder Jeff Bezos offered to buy Netflix. Bezos, who is now one of the world’s richest people, offered them “somewhere in the low eight figures” to acquire the company.

“When someone uses ‘low eight figures,’ that means barely eight-figures. That means probably something between USD 14 million and USD 16 million,” Randolph wrote about the meeting in his memoir, That Will Never Work, according to CNBC.

At the time, Randolph owned 30 per cent of the company and was its CEO, while Reed owned 70 per cent and was its investor. Both decided not to sell Netflix to Bezos.

Reed is stepping down as CEO of Netflix after a nearly 25 year run.

In my 40+ years as an entrepreneur, my 7 years working side by side with Reed were the highlight. pic.twitter.com/Bx2iKzo9bC

— Marc Randolph (@mbrandolph) January 19, 2023

In 1999, Netflix started an online subscription service including a flat-fee unlimited rentals system. But a year later, Netflix started suffering losses due to the dot-com bubble. The co-founders decided to sell the company to Blockbuster for USD 50 million. But John Antioco, the then CEO of Blockbuster, turned them down. A decade later, Blockbuster went bankrupt while Netflix went on to conquer the streaming world.

Randolph left the company in 2002, the year Netflix went public with an initial share price of USD 15. Hastings, who had been serving as the CEO since 1999, took complete charge. In 2007, Hastings introduced streaming services to Netflix. The company has never looked back since.

Netflix’s first major success was the drama series House of Cards (2013–2018). Its popularity boosted the streamer’s global reach. By 2016, it had rapidly scaled operations to over 190 countries and territories.

Narcos (2015–17), The Crown (2016–24), Stranger Things (2016–), Bridgerton (2020–), and South Korean epic thriller series Squid Game (2021–) are among a host of other popular streaming shows by Netflix in recent years.

The streamer has also had an impact on cinema, with its movies such as Roma (2018) and All Quiet on the Western Front (2022) winning multiple Academy Awards. In January 2024, a total of 11 Netflix movies received 19 Oscar nominations — the highest among all comPeting studios and platforms for the year.

The company has been so successful in its industry that, according to NASDAQ, anyone who invested USD 10,000 at the time when Netflix launched its IPO in 2002 would have their stocks worth USD 3.2 million by early 2023.

Net worth of Reed Hastings

According to Forbes, Reed Hastings has a net worth of USD 4.5 billion. It is a fantastic fortune for someone whose most important business idea had once hit rock bottom. Almost all of his net worth is thanks to his roughly 1.5 to 2 per cent stake in Netflix.

The company’s SEC filing dated 24 July 2024 revealed that he now owns 2,201,541 shares in the company through the Hastings-Quillin Family Trust, established with his wife, Patty Quillin. The disclosure also revealed that he donated 790,000 shares, worth around USD 1.76 billion to the Silicon Valley Community Foundation. This is the same organisation to which he had given 2 million Netflix shares in January 2024.

The net worth of Reed Hastings was once as high as USD 7 billion. His current lower net worth is not because of Netflix’s worth, which is skyrocketing, but his donations to charities.

Outside of his own Business, Hastings was on the board of directors of Microsoft from 2007 to 2012. He also sat on the board of Facebook from 2011 to 2020. Interestingly, Meta CEO Mark Zuckerberg and his wife, Priscilla Chan, are also among the major donors to the Silicon Valley Community Foundation.

Despite his association with Facebook, Hastings has famously described social media as his “idea of hell.”

Reed Hastings: What is his salary?

According to a Deadline report from December 2023, Netflix set fixed base salaries for 2024 at USD 3 million for its co-CEOs, USD 100,000 for the executive chair and USD 1.5 million for its other executive officers.

Thus, Hastings’ base salary for 2024 is USD 100,000. That’s a massive cut from the roughly around USD 3 million he received as a base salary from 2010-2014. He kept cutting his own pay over the years and received USD 650,000 as a base salary in 2020, the year he ended his sole run as CEO and became co-CEO.

Yet his overall pay has been quite high because of his stocks. His total pay for 2022 was USD 51.07 million, which was 25 per cent more than his total pay in 2021. Out of that, stock option awards comprised USD 49.4 million. His compensation without base salary was USD 33.4 million in 2020, USD 31.5 million in 2019 and USD 29.4 million in 2018.

He was set to receive a package of USD 34.6 million in 2023 as co-CEO, but he stepped down from his role in January 2023. That led to a change in the package. According to a Variety report, he would receive a base salary of USD 500,000 base salary and USD 2.5 million in stock options as executive chairman for 2023.

Donations done by Reed Hastings

Reed Hastings and Patty are also known for their philanthropy. They have donated heavily to the Silicon Valley Community Foundation. But that is not their only socially significant activity.

Hastings taught maths for most of the two years during his time with the Peace Corps serving in Swaziland (now Eswatini). He was also the president of the California State Board of Education from 2000 to 2004. Given this background, it is understandable that Hastings deeply cares about the Education of children. As such, much of his donations are aimed at furthering the Education of underprivileged communities.

In 2016, he launched a USD 100 million fund for education of children. At the time of its launch, Hastings said that a total of USD 1.5 million – comprising the first two donations – would go to the United Negro College Fund (UNCF) and the Hispanic Foundation of Silicon Valley for college scholarships for black and Latino youth.

“I’m so blessed to be able to do this, and I hope to do more in the future. Thanks to all of you who are Netflix members or employees for making this possible,” he said at the time.

In 2020, Hastings and Patty donated USD 120 million to fund scholarships at two historically Black colleges – Morehouse College and Spelman College – as well as the UNCF. Both the colleges and the fund received USD 40 million each.

“There are many good places to donate, but the [historically Black colleges and universities] are 150 years old, incredibly resilient, producing an amazing number of Black graduates,” Hastings told CNBC’s Andrew Ross Sorkin in an interview at the time of making the commitment.

The announcement came amid growing calls for racial justice after the killing of George Floyd by the American police as well as the disproportionate medical facilities for African Americans due to which they suffered more during the pandemic.

“The amount of tragedy really did get us to focus and say, ‘let’s do something now that will be supportive of these great institutions and give people some sense of hope,’” Hastings said. “This moment is not the first time that racism has reared its, you know, terribly ugly head.”

The total amount made them the first billionaire individual or couple to donate over USD 100 million to the specific cause.

Outside of philanthropy, Hastings is also known for making political donations. In July 2024, he was in the news for making a contribution of USD 7 million to a super PAC supporting the presidential bid of Vice President Kamala Harris, a Democratic Party leader.

Assets owned by Reed Hastings

Reed Hastings and Patty live with their two children in Santa Cruz, California, according to celebrity wealth tracker Celebrity Net Worth. The house they reside in was bought in 2013 for only USD 1.5 million.

But they also own a property in Hollywood. Hastings purchased a two-story penthouse apartment from Charlize Theron for USD 1.75 million in 2016. For Theron, the price was USD 1 million less than what she had paid when she bought it in 2007.

The Hollywood address is important for Hastings for several reasons. His company, Netflix, has its headquarters in Los Gatos, California. Los Gatos is a small incorporated town in Santa Clara County and is located on the outskirts of San Jose, the heart of Silicon Valley. It is around 500 km from Hollywood and can be easily reached in about 5 hours by road.

(Hero image: Courtesy of Reed Hastings/@reedhastings/X; Featured image: Courtesy of Reed Hastings/@reed/Facebook)

This story first appeared on Lifestyle Asia Singapore.