As for the annual bonus, Netflix assumes that everyone is functioning at a high level and pays as if they were making the top-end of the bonus range at other companies. Which is part of the rationale behind the high base compensation.
"Pays as if they were making the top-end of the bonus range at other companies"
To me, this is the problem - who determines this and what is their dataset? I worked at a company in the past that claimed to do this, but to do this they generally need some sort of data source. And the data sources for salary data are tough to use in this way - positions/responsibilities vary, regions vary, etc. Just tough to get this right - even with the best intentions.
It's pretty damn easy actually, once you're a certain size at least. The hiring and retention pipeline makes it painfully obvious.
As an employee, you don't get to see all of the requests for raises, all of the people negotiating salaries, etc. But there's people in the company who do. That's all the data you need.
That won't be the case for many of the management readers of this article though. They will implement a no bonus policy and pay at or below market rates (before bonuses) and then grumble to themselves "millennials are so lazy!" when the 2 year turnover is 90%.
As for the annual bonus, Netflix assumes that everyone is functioning at a high level and pays as if they were making the top-end of the bonus range at other companies. Which is part of the rationale behind the high base compensation.