'They got a $2 million raise last year?': Netflix lets any exec or director see what employees make, and people are freaking out

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Chief Content Officer Ted Sarandos reportedly implemented an open-salary policy at Netflix.

• Netflix has an open-salary policy for directors and execs, according to the Hollywood Reporter.
• The internal system was reportedly implemented in 2017 to help high-level employees determine if they're fairly compensated, and some employees are shocked at the highest salaries.
• Netflix pays its employees 25% to 50% more than competitors, with entry-level coordinators making six figures and vice presidents earning a minimum of $1 million, sources told the Hollywood Reporter.

As one of the world's first subscription-based streaming media services, Netflix has a reputation for disruption - and the company is paying employees top dollar to help continue that legacy.

According to a recent article by the Hollywood Reporter's Bryn Elise Sandberg, sources said Netflix pays employees 25% to 50% more than competitors (including 5% in stock). And among top-level employees at Netflix, that pay isn't secret.

Sources told the Hollywood Reporter that any employee working at a director level or higher can see other employees' current salary and pay history.

This pay practice was reportedly implemented by chief content officer Ted Sarandos in 2017 so employees can determine if they're fairly compensated.

Netflix reportedly places "a high priority on conversations about pay" and employee efficiency, Sandberg wrote.

Business Insider's Shana Lebowitz previously reported that in the "culture" section on Netflix's website, the company makes clear that it keeps "only our highly effective people." The site reads: "Succeeding on a dream team is about being effective, not about working hard. Sustained 'B' performance, despite an 'A' for effort, gets a respectful generous severance package."

Still, the move to reveal pay among top-level employees has left some shocked at the highest salaries.

"Everyone is always looking. It's, 'Holy sh--, they got a $2 million raise last year? What happened?!'" one employee told the Hollywood Reporter.

"We were all like, 'F---, this is crazy,'" another employee told the magazine. These reactions aren't surprising considering the company's industry-leading salaries.

For executives, that looks something like this:

• Managers: $150,000 to $400,000
• Directors: $400,000 to $800,000
• Vice presidents: $1 million-plus

A top publicity executive is rumored to make a base salary of $1.5 million, according to the Hollywood Reporter's sources. Even entry-level assistants can make between $70,000 and $80,000, and some coordinators take home six figures.

The Hollywood Reporter previously reported Netflix CEO Reed Hastings could make up to $29.4 million in 2018, while COO Sarandos will earn $12 million this year, up from $1 million in 2017.

"It's not comparable to anywhere else," an employee told the Hollywood Reporter. "It's like play money."

Pay transparency isn't a new concept. Companies from Whole Foods to tech startup Buffer have implemented open-salary policies in the workplace.

And studies cited by researcher David Burkus in his 2016 book "Under New Management: How Leading Organizations are Upending Business as Usual" even point to pay transparency as a way to keep employees motivated and productive.

Business Insider has reached out to Netflix for comment.