One-dollar salary
Several top executives in large businesses receive a salary of one dollar. In place of a salary, the executives receive stock options.[1][2] In the United States, this approach impacts personal tax liability because although stock and option grants are taxed at federal income rates, they are exempt from payroll taxes (typically around 15%) used to fund Social Security and Medicare.
Executives argue that remuneration through stock instead of salary ties management performance to their financial benefits.[1] The assumption is that stock prices will reflect the actual value of a company, which reflect the management performance of the company. Detractors argue that this incentive may drive short-term planning over long-term planning.
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[edit] Dollar-a-year men
The "Dollar-a-year men" were business executives who helped the government manage the US national economy during periods of war, especially during World War I. US law forbids the government from accepting free services from anyone. Therefore, individuals who are effectively volunteering their services have to be paid a nominal salary. Typically these individuals are paid one dollar a year for their work. For example, Massachusetts Governor Alvan T. Fuller, wealthy in his own right, served in several government positions on such terms.[3]
In Canada during World War II, C.D. Howe, Canada's "Minister of Everything", created a rearmament program using "dollar-a-year men".[4] An example was John Wilson McConnell, the owner and publisher of the Montreal Star, who was appointed Director of Licences for the Wartime Trade Board, a position for which he served for free.[5]
[edit] Single-digit salary earners
The following people have been listed as having single-digit salaries:
- Steve Jobs (Apple), who also did not take any alternative form of compensation (stock options, bonus, etc.) from 2003 till his death[6][7][8]
- Mark Zuckerberg (Facebook) (effective 2013)
- Elon Musk (Tesla Motors)
- Lee Iacocca (Chrysler Corporation)
- Jerry Yang (Yahoo!)[9]
- Sergey Brin (Google)[10]
- Larry Page (Google)[10]
- Eric Schmidt (Google)[10]
- Arnold Schwarzenegger (former Governor of California)
- Michael Bloomberg (Mayor of New York City)
- Henry Samueli (Broadcom Corporation)[11]
- Richard Kinder (Kinder Morgan), who also does not take any alternative form of compensation (stock options, bonus, etc.)
- James Li (Syntax-Brillian)
- Sehat Sutardja (Marvell Technology Group)[12]
- Pantas Sutardja (Marvell Technology Group)[12]
- John Mackey (Whole Foods Market), who also does not take any alternative form of compensation (stock options, bonus, etc.) either.[13]
- Meg Whitman (HP)[14]
[edit] Further reading
- Kimes, Mina (June 1, 2011). "A $1 CEO isn't a bargain". CNN (Fortune Management). http://management.fortune.cnn.com/2011/06/01/a-1-ceo-isn%E2%80%99t-a-bargain/. Retrieved 1 June 2011.
[edit] References
- ^ a b Herbst, Moira (10 May 2007). "The Elite Circle of $1 CEOs". BusinessWeek. http://www.businessweek.com/bwdaily/dnflash/content/may2007/db20070509_992600.htm. Retrieved 2009-07-25.
- ^ Mayerowitz, Scott (3 December 2008). "The Other Side of the $1 Salary". ABC News. http://abcnews.go.com/Business/Economy/story?id=6378775&page=1. Retrieved 2009-07-25.
- ^ New York Times: "Fuller Explains Refusal of Salary, September 20, 1926, accessed July 24, 2010
- ^ Art Bailey. "Clarence Decatur Howe". Canada's Digital Collections. http://collections.ic.gc.ca/heirloom_series/volume5/218-221.htm.
- ^ Mel James. "John Wilson McConnell". Canada's Digital Collections. http://collections.ic.gc.ca/heirloom_series/volume6/318-319.htm.
- ^ [1] Apple's 2012 Proxy
- ^ [2] Apple's 2009 Proxy
- ^ [3] Apple's 2007 Proxy
- ^ 10-Q Watch: Yahoo’s Acquisitions; Yang Salary | paidContent.org
- ^ a b c Google SEC Filing 2006
- ^ Compensation for Henry Samueli, BROADCOM, Chairman of the Board of Directors (effective May 21 2003
- ^ a b Marvell Tech's CEO, Acting COO Take Salary Cut, Each To Be Paid $1, January 16, 2008.
- ^ "Whole Foods - a retail phenomenon", BBC News, June 6, 2007.
- ^ HP CEO Meg Whitman's salary: $1 at CNN Money
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