Netflix has rewritten its culture memo four times since 2009. In the 2009 slide deck, 16% of the words were about pay. In the memo Netflix publishes today, written in June 2024, none are. This paper, published in November 2026, recovers all eleven dated versions from the Internet Archive and tests the model against Netflix's SEC filings from 2007 to 2025 and against two groups of peers: the media companies it competes with and the technology companies it hires from.
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Verdict
The Netflix model is real, documented and consistent with the company's results. It is not shown to have caused them, and the one component that defines it, the keeper test, does not travel.
What the evidence says
- The document changed more than the model. Pay fell from 16% of the words in the 2009 deck to none in 2024, and structure from 10% to none. Values rose from 4% to 22%. Autonomy is the largest topic in every version. The four-month severance floor published in 2017 came out in 2022.
- Profit per head took eleven years. Revenue per employee has been roughly twice the media peers' in every year since 2012. Operating income per employee was below the peers until 2017 and above them from 2018. The model did not change in 2018. Scale did.
- The results paid for the culture more than the other way round. Netflix spends its money on content, not people, which made top-of-market pay affordable from the start. When growth stalled in 2022, the generous promises went first.
- The one documented financial effect is pay design. Cash at the top of the market with stock options by choice has kept stock-based pay at about 2% of revenue or less, against 4% to 10% at Alphabet, Meta, Microsoft and Salesforce.
What's inside
- The model piece by piece: pay, the keeper test, context not control, candour, leave and structure, with an evidence grade on every claim
- What the culture memo stopped saying, version by version, counted with a dictionary fixed before counting
- Nineteen years of revenue, profit and stock-based pay per employee against both peer panels
- Did the HR model drive the results, or did the results pay for it?
- Reversals, layoffs, litigation and the three failed say-on-pay votes
- The copycats, and the four documented reversals of unlimited vacation
- Who should copy it, who should adapt it, and who should leave it alone
- Implications for Japan, component by component, with the legal sources
- A rollout playbook with gates and kill criteria, a scorecard, and the full dictionary so anyone can check the counts
Look inside
Who it is for
- HR leaders asked "why can't we be more like Netflix?"An evidence-based answer to give the CEO, with what to take, what to adapt and what to leave.
- HR teams in Japan handed a global playbookWhich parts survive Japanese employment law as written, which need rebuilding, and what the Japanese version of an exit costs.
- Founders and executives designing a cultureWhat Netflix's model depends on, so you can tell whether your business has the same foundations.
How we did it
We wrote down what we expected to find before reading a single filing, and kept the predictions we got wrong in the paper. Every claim carries an evidence grade, from audited filings to word of mouth. Every causal claim is tagged as correlational, a plausible mechanism, or documented. The paper says what it does not prove at the end of each section.
By Yan Sen Lu, Managing Director of Makana Partners and Editor of The Hardest Market.
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Questions
What format is the paper, and what language?
A 50-page PDF in English, published November 2026. The Japan section cites Japanese employment law by name.
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Is this affiliated with Netflix?
No. It is an independent analysis of public sources: Netflix's own published documents and SEC filings, books by former executives, court records and press reports. Netflix did not review it.