Reed Hastings, the co-founder and executive chair of Netflix, has made a noteworthy philanthropic gesture by donating 2 million shares of Netflix stock, valued at over $1.1 billion based on the current market price, to the Silicon Valley Community Foundation in Mountain View, California.
This sizable contribution, accounting for approximately 40% of Hastings’ Netflix holdings, was disclosed in a recent Securities and Exchange Commission (SEC) filing, initially withholding information about the specific beneficiary, Deadline first reported
The disclosed filing indicates that Reed Hastings still maintains ownership of 2,991,541 shares in Netflix, highlighting the scale of his overall investment in the streaming giant.
This significant act of generosity occurred against the backdrop of Netflix shares attaining a two-year high. As of Monday’s close, Netflix’s stock stood at $575.79, reflecting a nearly 1% increase.
Noteworthy is the strategic advantage that executives gain from making substantial stock donations.
Beyond the charitable impact, such contributions offer executives considerable tax benefits. These donations generate a deduction against current income, often valued at up to 30%, contingent on the donor’s tax rate. Furthermore, the donor can sidestep capital gains tax on the shares’ appreciation. The tax deduction is calculated based on the stock’s price at the time of donation.
What you should know
Before this substantial philanthropic act, Reed Hastings possessed a net worth of $6.6 billion, according to the Bloomberg Billionaires Index.
Hastings has a history of supporting educational institutions, particularly those led by Historically Black Colleges and Universities (HBCUs). In the preceding year, he contributed a noteworthy $20 million to Minerva University in San Francisco.
Having stepped down from his position as co-CEO of Netflix alongside Ted Sarandos a year ago, Reed Hastings remains a significant figure within the company. The role of co-CEO is now filled by Greg Peters.
The recipient of this substantial donation, the Silicon Valley Community Foundation, stands as the largest charitable foundation in Silicon Valley.
As a nonprofit public benefit corporation committed to charitable activities, the foundation has yet to provide an official response to inquiries regarding this windfall.
Reed Hastings’ philanthropic endeavors align with his commitment to supporting educational causes, particularly those fostering diversity and inclusion. The recent donation to the Silicon Valley Community Foundation adds to his track record of contributing significantly to causes that resonate with his values.
