In what is shaping up to be a critical year for the streaming giant, Netflix says that co-CEOs Reed Hastings and Ted Sarandos will have 2023 pay packages valued at $34.65 million and $40 million, respectively.

That is in line with their 2022 pay packages of $40 million for Sarandos and $34.6 million for Hastings, however, Netflix also disclosed that it is changing how it compensates its top executives, giving them less guaranteed income, and tying their pay to the company’s performance.

Previously, Sarandos, Hastings and other Netflix execs received a salary and a tranche of stock annually, and they could choose how much of each to take. Last year, Sarandos had a $20 million salary and a $20 million stock tranche, while Hastings took a $65,000 salary, with the remaining $34 million in stock.

In 2023, the company will pay its officers a salary, an annual target bonus, and a tranche of stock, with a cap of $3 million in salary, and a requirement that at least 50 percent of pay be in stock. While Hastings is keeping his compensation unchanged with a $650,000 salary and $34 million in stock, Sarandos will take a $3 million salary, with a $17 million target bonus, and $20 million in stock.

Netflix discloses its pay packages in December, but with much of the compensation comprised of stock, the actual compensation is subject to fluctuation based on the company’s share price, and is disclosed in the company’s annual proxy filing.

The 2023 compensation changes were filed with the Securities and Exchange Commission on Friday afternoon.

2023 will be a critical year for Netflix, which found itself flat-footed in 2022, with its share price falling by nearly 50 percent year-to-date, multiple rounds of layoffs, and major strategic pivots around password sharing and advertising.

That new advertising tier is seen as a pathway to growth, as both an option to entice new or former subscribers, and as a landing pad for subscribers subject to the password sharing crackdown.

And Netflix COO Greg Peters is leading the company’s push into advertising, as well as its nascent gaming efforts, and its password sharing crackdown. Peters is set to receive a 2023 pay package of $24 million, in line with last year’s estimate.