Staff Writer
Columbus CEO

c.2013 New York Times News Service

What a difference a year has made for Reed Hastings, the chief executive of Netflix.

Last December, Hastings was being pummeled for the company’s ill-fated effort to both raise prices and wean customers off its old-economy DVD-by-mail business. Its stock was trading for less than $100 a share, barely a third of its peak price in mid-2011. Hastings was avoiding the public eye after being parodied on “Saturday Night Live.”

It’s safe to say that when this year ends next week, Netflix investors and Hastings will have plenty to celebrate. Barring a last-minute sell-off, Netflix is poised to end 2013 as the single best-performing stock in the Standard & Poor’s 500-stock index. As of this week, its stock had gained more than 310 percent.

When I spoke with Hastings in April, he described the self-inflicted wounds and the company’s nascent recovery as “a partially healed bone,” adding: “It’s still quite fragile. Were we to make a similar mistake, we’d be right back in the penalty box. So we’re not really out of the woods. We’re growing and we’re making good progress, but we’re still not fully back to where we were.”

Eight months later, the bone is a lot healthier. With just two original series — “House of Cards” and “Orange Is the New Black,” both acclaimed by critics and audiences — Netflix has established itself as a force in original programming. The series have also made Netflix a must-see destination network, which has increased its subscribers. The company said it had passed 40 million subscribers worldwide and had more than 30 million Internet streaming customers. The DVD-by-mail business may soon be a distant memory. And all that has Wall Street cheering.

This month the Motley Fool investing website named Hastings its chief executive of the year. Even so, when I caught up with Hastings recently, he was anything but euphoric. After all, he was named businessperson of the year by Fortune in 2010, only to be humbled by the events of 2011. He said he remained chastened by that experience and was focused on running the business, not the stock price. That means more original programming (a new season of “House of Cards” will appear in February) and expanding internationally.

“We’re trying to stay centered as the critics howl and fans cheer,” he told me. “Whether our stock price is way up or way down, we focus on pleasing and growing our membership the same.”


In the annals of the gay rights movement, 2013 will be remembered as the year the Supreme Court struck down the Defense of Marriage Act as unconstitutional. But another milestone came in September, when Exxon Mobil, the world’s largest corporation by market capitalization and a notable holdout in granting equal benefits to gay employees, announced that “Exxon Mobil will recognize all legal marriages for the purposes of eligibility in U.S. benefit plans to ensure consistency for employees across the country.” It added, “We provide benefits to same-sex spouses in 30 countries outside the United States.”

But some things haven’t changed. In May, on the eve of a shareholder vote to require the company to add sexual orientation to its equal opportunity employment statement, one former Exxon Mobil employee, Tom Allen, told me: “I don’t think they’ll ever back down. Not until they’re forced to.” Exxon Mobil prevailed in the shareholder vote by a bigger margin than ever and still doesn’t include sexual orientation in its equal opportunity employment statement.

The upshot, gay rights advocates have pointed out, is that an Exxon Mobil employee seeking to claim same-sex spousal benefits must come out as gay — a status that is not protected from discrimination under the company’s employment statement.

As Cece Cox, the chief executive director of Resource Center Dallas, a service organization for lesbian, gay, bisexual and transgender people, told me, “You have to out yourself in the workplace with a company that doesn’t offer you any protection.”

Cox said Exxon Mobil was getting little or no credit among gay rights advocates for offering same-sex benefits, since it was required to do so by federal law.

“Of course, we support the new policy,” she said, “but has the culture really changed? Will gay employees feel free to put a picture of their spouse or partner on their desk? So far, we haven’t seen anything to suggest that they’ve really embraced equality for their gay employees.”

An Exxon Mobil spokesman, Alan T. Jeffers, said, “We follow the federal definition of protected groups” with respect to the equal opportunity employment statement. That definition also does not include sexual orientation, although gay rights advocates have been lobbying the White House for an executive order that would add sexual orientation to the list. Should that occur, “we would absolutely change the policy if necessary,” Jeffers said. He added, “As we’ve said repeatedly, we have zero tolerance for all forms of discrimination.”

Cox said, “We can’t give up the hope they’ll do something. Our door is open and we’d love to communicate with them. All of their comrades in the Fortune 10 have already done it. You just have to think that, with time, it will happen.”


Since I examined the plight of Mathew Martoma, the SAC Capital trader accused of insider trading who, like all criminal defendants, faces the dilemma of whether to cooperate with prosecutors, the year has brought nothing but grim tidings. Thus far, Martoma has defiantly asserted his innocence and refused to cooperate.

But the pressure is mounting.

In November, SAC Capital Advisors, the successful hedge fund founded by Steven A. Cohen, pleaded guilty to five felony counts, agreed to pay $1.2 billion and to stop managing money for outside investors.

“I want to express our deep remorse for the misconduct of each individual who broke the law while employed at SAC,” said Peter Nussbaum, the firm’s general counsel. Nussbaum acknowledged, in entering the fund’s guilty plea, “This happened on our watch, and we are responsible for that misconduct.”

Martoma wasn’t mentioned by name, but government prosecutors referred to SAC as a “veritable magnet of market cheaters.” Six employees have pleaded guilty.

Then, last week, a New York jury convicted another SAC trader, Michael S. Steinberg, of insider trading. Steinberg, the only SAC trader besides Martoma who opted to fight the charges, fainted as the jury filed in to deliver the guilty verdict.

The verdict is especially significant for Martoma, because the Steinberg case was considered much weaker for prosecutors than his. Steinberg wasn’t accused of gathering inside information himself, only of knowing that it was obtained illegally. He was at the end of a five-person chain of information that started with an insider at Dell. And the government’s star witness said that Steinberg had never explicitly told him to break the law, only that he wanted him to get “edgy” information.

Yet the jury took just two days to convict.

By comparison, the star witness in Martoma’s case is expected to be the doctor who leaked confidential information about clinical trials directly to Martoma. The doctor is cooperating with the government and has already implicated Martoma.

And Martoma may be uniquely positioned to offer prosecutors valuable information. He’s the only former SAC trader who, the government has said, had direct dealings with Cohen concerning suspicious trades. The government said the two had a 20-minute telephone conversation the night before SAC started trading shares of two pharmaceutical companies based on confidential information that Martoma had obtained from the doctor. So far, Martoma hasn’t told prosecutors the substance of that conversation. Of course, if all they did was exchange pleasantries, it won’t be of much value to prosecutors.

The latest developments have rendered even more baffling Martoma’s refusal to reach a deal, especially one with the potential to minimize any time in prison.

For Martoma, time is running out. His trial is scheduled to begin Jan. 6 in U.S. District Court in New York. According to The New York Post, he and his family were spending the holidays in Yellowstone National Park.

Richard M. Strassberg, Martoma’s lawyer, said, “Mr. Martoma continues to fight these charges and is preparing for trial.”


Last summer, I dropped in at Tesla’s New York showroom and gave Jason Berkley, the assistant manager, the daunting task of persuading me to buy a $71,000 all-electric car. He nearly succeeded — until I came to my senses.

Since then, I’ve wondered how Berkley has been doing. He impressed me at the time with his candor, acknowledging at one point that the Tesla “might not work for you,” since I live in New York City and have a weekend home in upstate New York, far from any charging station.

Now, Berkley faces some new challenges. In November, the National Highway Traffic Safety Administration said it would investigate two battery fires in Model S Teslas. No one was injured in either episode, and the Tesla still has an impeccable safety record, but the cars were heavily damaged.

Given Boeing’s highly publicized problems with lithium-ion batteries in its new 787 Dreamliner, it’s not surprising that Tesla skeptics have long pointed to the car’s batteries as a potential Achilles heel. But Tesla and its visionary founder and chief executive, Elon Musk, came out with an aggressive defense of the car’s safety record and engineering.

As Musk said in a blog post, “There are now substantially more than the 19,000 Model S vehicles on the road,” for “an average of one fire per at least 6,333 cars, compared to the rate for gasoline vehicles of one fire per 1,350 cars.” By this measurement, he went on, “You are more than four and a half times more likely to experience a fire in a gasoline car than a Model S! Considering the odds in the absolute, you are more likely to be struck by lightning in your lifetime than experience even a non-injurious fire in a Tesla.”

I can’t say how the persuasive Berkley is handling the issue, since a Tesla spokesman, Patrick Jones, turned down my request to speak to him. (Tesla requires all employees to get permission to speak to the press. For my earlier column, I came to the showroom as a potential customer.)

Jones cited several milestones for the fledgling auto company: Since my column appeared in August, the company has expanded to 75 showrooms from 50; Tesla is producing 600 vehicles a week, up from 500; and it now has about 50 supercharger locations in the United States. He added, “In early January we expect to have completed both the East Coast corridor from Boston to Miami, and a cross-country route from Los Angeles to New York.”

Tesla shares peaked at $194.50 in October, just before news of the battery fires, then dropped to just more than $120 a share. This week, the federal government announced that the Tesla S would retain its five-star safety rating despite the continuing investigation. By the end of the week, shares had jumped nearly 10 percent to $156. For the year, Tesla stock was No.?1 in the Nasdaq index of 100 largest nonfinancial companies.