One-dollar salary

Last updated

Notable earners of one-dollar salaries
President Hoover portrait.jpg
Herbert Hoover
Arnold Schwarzenegger by Gage Skidmore 4.jpg
Arnold Schwarzenegger
Steve Jobs Headshot 2010-CROP (cropped 2).jpg
Steve Jobs

A number of top executives in large businesses and governments have worked for a one-dollar salary. [1] [2] [3] One-dollar salaries are used in situations where an executive wishes to work without direct compensation, but for legal reasons must receive a payment above zero, so as to distinguish them from a volunteer. The concept first emerged in the early 1900s, where various leaders of industry in the United States offered their services to the government during times of war. Later, in the late 1990s and early 2000s, many business executives began accepting one-dollar salaries—often in the case of struggling companies or startups—with the potential for further indirect earnings as the result of their ownership of stock. Many choose to reduce their salary so they can avoid income taxes. [4]

Contents

Dollar-a-year men

In the early-to-mid-20th century, "dollar-a-year men" were business and government executives who helped the government mobilize and manage American industry during periods of war, notably World War I, World War II, and the Korean War. U.S. law forbids the government from accepting the services of unpaid volunteers. [5] Those employed by the government had to be paid a nominal salary, and the salary establishes their legal relationship as employees of the government. [6] During World War I, about 1,000 such people were employed by the United States. [7] While they received only a dollar in salary from the government, most executives had their salaries paid by the companies.

The first known such employee was Gifford Pinchot, working for Theodore Roosevelt. After Pinchot, the United States Department of Agriculture employed several dollar-a-year men. [8] On June 19, 1933, Frances Perkins, Secretary of Labor appointed a five-member Labor Advisory Board, of whom two members came from the Amalgamated Clothing Workers union, of whom one, Sidney Hillman, was a dollar-a-year man. [9] Progressive lawyer Max Lowenthal was a dollar-a-year man as legal counsel on various congressional committees, befriended U.S. Senator Harry S. Truman, and wound up as a dollar-a-year man in President Truman's cabinet.[ citation needed ]

World War I

Bernard Baruch was the first businessman employed for a one-dollar salary. [10] World War I, the Advisory Commission to the Council of National Defense was staffed largely by dollar-a-year men, including Bernard Baruch, Robert S. Brookings, and Herbert Bayard Swope. [11]

Interwar

Massachusetts Governor Alvan T. Fuller, wealthy in his own right, served in several government positions on such terms.[ citation needed ]

New Deal and World War II

Kentucky's Ashland Oil and Refining Company founder and CEO, Paul G. Blazer (1890–1966), served twice as a government salaried dollar-a-year man: from 1933 to 1935 under President Franklin D. Roosevelt's National Recovery Administration on the Code of Fair Competition for the Petroleum Industry [12] as Chairman of the Blazer Committee [13] and a second time during World War II as Chairman of District II Refining for President Roosevelt's Petroleum Administration of War. [14] [15] During World War II, socialite Doris Duke worked in a canteen for U.S. sailors in Egypt at such a salary. [16]

In Canada during World War II, C. D. Howe, Canada's "Minister of Everything", created a rearmament program using "dollar-a-year men". [17] 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. [18] Others include E. P. Taylor and Austin Cotterell Taylor. [19]

Recent examples

Some recent one-dollar salary earners worked in government as well, most notably former California governor Arnold Schwarzenegger, [20] former Massachusetts governor Mitt Romney, [21] and former New York City mayor Michael Bloomberg. [22]

After promising to take only a dollar a year in November 2016, former U.S. President Donald Trump donated the first three months of his salary to the National Park Service and stated plans to donate all of his salary during the term. [23] [24] [25] [26] Since then, President Trump donated his salary to various Federal Departments, fulfilling his campaign promise to do so. [27] However, he did bill the US government, in particular the Secret Service, exorbitantly to protect him when he spent his time at Mar-A-Lago. [28]

In 2015, then 15-year-old Corbin Duncan petitioned the Australian Prime Minister, Malcolm Turnbull, to take up a $1 salary. [29] The petition was unsuccessful but gained international media coverage. [30]

Instances of alternative compensation

While many executives who take a one-dollar salary also choose not to take any other forms of compensation, a number earn millions more in bonuses and/or other forms of compensation. For example, in 2010–11 Oracle's founder and CEO Larry Ellison made only $1 in salary, but earned over $77 million in other forms of compensation. [31]

In some cases, in lieu of a salary, the executives receive stock options. [32] [33] In the United States, this approach impacts personal tax liability, because although stock and option grants are taxed at federal income rates, they may be exempt from some portion of payroll taxes (typically 7.65%) used to fund Social Security and Medicare. [34]

Executives argue that remuneration through stock instead of salary ties management performance to their financial benefits. [32] 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. [35]

Notable one-dollar salary earners

The following people have been employed for annual salaries of one dollar:

See also

Related Research Articles

<span class="mw-page-title-main">Larry Ellison</span> American entrepreneur (born 1944)

Lawrence Joseph Ellison is an American businessman and entrepreneur who cofounded software company Oracle Corporation. He was Oracle's chief executive officer from 1977 to 2014 and is now its chief technology officer and executive chairman.

<span class="mw-page-title-main">Warren Buffett</span> American investor and philanthropist (born 1930)

Warren Edward Buffett is an American businessman, investor, and philanthropist who currently serves as the chairman and CEO of Berkshire Hathaway. As a result of his investment success, Buffett is one of the best-known investors in the world. As of June 2024, he had a net worth of $135 billion, making him the tenth-richest person in the world.

<span class="mw-page-title-main">Deutsche Bank</span> German banking and financial services company

Deutsche Bank AG is a German multinational investment bank and financial services company headquartered in Frankfurt, Germany, and dual-listed on the Frankfurt Stock Exchange and the New York Stock Exchange.

<span class="mw-page-title-main">David M. Cote</span> American businessman (born 1952)

David M. Cote is an American businessman. Cote previously worked for General Electric and TRW Inc. before he was appointed chairman and chief executive officer (CEO) of Honeywell in 2002, following their acquisition by AlliedSignal. Cote also sat on the JP Morgan Chase risk committee during the period in which the firm lost $6 billion trading credit derivatives. Cote stepped down as CEO at Honeywell at the end of March 2017 and was succeeded by Darius Adamczyk. Cote is currently the executive chairman of Vertiv.

<span class="mw-page-title-main">Howard Schultz</span> American businessman (born 1953)

Howard D. Schultz is an American businessman and author who was the chairman and chief executive officer of Starbucks from 1986 to 2000, from 2008 to 2017, and interim CEO from 2022 to 2023. Schultz owned the Seattle SuperSonics basketball team from 2001 to 2006.

<span class="mw-page-title-main">Jamie Dimon</span> American banker and businessman (born 1956)

James Dimon is an American banker and businessman. He has been the chairman and chief executive officer (CEO) of JPMorgan Chase since 2006.

<span class="mw-page-title-main">Jeff Immelt</span> American businessman

Jeffrey Robert Immelt is an American manufacturing executive working as a venture partner at New Enterprise Associates. He previously was the CEO of General Electric from 2001 to 2017, and the CEO of GE's Medical Systems division from 1997 to 2000. Immelt's tenure saw GE's largest divestments in the company's history, as the company sold almost two-thirds of its subsidiaries and assets.

<span class="mw-page-title-main">Stephen A. Schwarzman</span> American businessman and investor (born 1947)

Stephen Allen Schwarzman is an American businessman. He is the chairman and CEO of the Blackstone Group, a global private equity firm he established in 1985 with Peter G. Peterson. Schwarzman was chairman of former President Donald Trump's Strategic and Policy Forum.

<span class="mw-page-title-main">Bob Iger</span> American business executive (born 1951)

Robert Alan Iger is an American media executive who is chief executive officer (CEO) of The Walt Disney Company. He previously was the president of the American Broadcasting Company (ABC) between 1994 and 1995 and president and chief operating officer (COO) of Capital Cities/ABC, from 1995 until its acquisition by Disney in 1996. Iger was named president of Disney in 2000 and succeeded Michael Eisner as CEO in 2005, until his contract expired in 2020. He then was executive chairman until his formal retirement from the company on December 31, 2021. After his exit from the company, Iger continued as an advisor to his successor.

<span class="mw-page-title-main">Lloyd Blankfein</span> American investment banker (born 1954)

Lloyd Craig Blankfein is an American investment banker who has served as senior chairman of Goldman Sachs since 2019, and chairman and chief executive from 2006 until the end of 2018. Before leading Goldman Sachs, he was the company's president and chief operating officer (COO) from 2004 to 2006, serving under then-CEO Henry Paulson.

William C. Rhodes III is the Executive Chairman and former President and Chief Executive Officer of AutoZone, Inc.

Richard Dana Fairbank is an American billionaire businessman who co-founded Capital One with Nigel Morris in 1988. He was on the board of directors of MasterCard International from 2004 to 2006. He is a member of the Stanford Business School advisory council, the Financial Services Roundtable, and the board of directors of the BITS Technology Forum.

<span class="mw-page-title-main">Robert Nardelli</span> American businessman

Robert Louis Nardelli is an American businessman who was the CEO of Freedom Group from September 2010 to March 2012. Prior to that role, Nardelli served as chairman and CEO of Chrysler from August 2007 to April 2009 and CEO of The Home Depot from December 2000 to January 2007. Before joining The Home Depot, Nardelli spent most of his career at General Electric and had risen to become one of the top three executives competing to succeed Jack Welch.

<span class="mw-page-title-main">Vikram Pandit</span> Indian-born American banker

Vikram Shankar Pandit is an Indian-American banker and investor who was the chief executive officer of Citigroup from December 2007 to 16 October 2012 and is the current chairman and chief executive officer of The Orogen Group.

<span class="mw-page-title-main">Chris Collins (New York politician)</span> American politician (born 1950)

Christopher Carl Collins is an American politician and businessman who served as the U.S. representative for New York's 27th congressional district from 2013 until his resignation in 2019. Collins was elected Erie County Executive in 2007 and held that position for one term. A member of the Republican Party, Collins was the first sitting U.S. Representative to endorse Donald Trump for President of the United States, and he served on Trump's presidential transition team. He resigned his seat in 2019 and afterwards pleaded guilty to insider trading and lying to the FBI.

Executive compensation is composed of both the financial compensation and other non-financial benefits received by an executive from their employing firm in return for their service. It is typically a mixture of fixed salary, variable performance-based bonuses and benefits and other perquisites all ideally configured to take into account government regulations, tax law, the desires of the organization and the executive.

<span class="mw-page-title-main">Kenneth Frazier</span> American business executive

Kenneth Carleton Frazier is an American business executive. He is executive chairman and former CEO of the pharmaceutical company Merck & Co.. After joining Merck & Co. as general counsel, he directed the company's defense against litigation over the anti-inflammatory drug Vioxx. Frazier is the first African American man to lead a major pharmaceutical company. He was elected to the American Philosophical Society in 2018.

<span class="mw-page-title-main">James McNerney</span> American businessman (born 1949)

Walter James "Jim" McNerney Jr. is a business executive who was President and CEO of The Boeing Company from June 2005 to July 2015. McNerney was also Chairman from June 2005 until March 1, 2016. McNerney oversaw development of the Boeing 737 MAX.

<span class="mw-page-title-main">Executive compensation in the United States</span> Pay and benefits for upper management

In the United States, the compensation of company executives is distinguished by the forms it takes and its dramatic rise over the past three decades. Within the last 30 years, executive compensation or pay has risen dramatically beyond what can be explained by changes in firm size, performance, and industry classification. This has received a wide range of criticism leveled against it.

<span class="mw-page-title-main">David Perdue</span> American politician & businessman (born 1949)

David Alfred Perdue Jr. is an American politician and business executive who served as a United States senator from Georgia from 2015 to 2021. A member of the Republican Party, Perdue was an unsuccessful candidate for Governor of Georgia in 2022.

References

  1. ↑ Isaac, Mike (February 10, 2012). "A Dollar for Your Thoughts: Silicon Valley's Famed Single-Digit Salaries". Wired. Archived from the original on February 16, 2013. Retrieved January 4, 2013.
  2. ↑ "10 High-Powered Executives with $1 Salaries". 14clicks.com. Archived from the original on January 6, 2013. Retrieved January 3, 2013.
  3. ↑ "Vanderlip Leaves Biggest Bank and Will Aid McAdoo". The Owosso Argus-Press . September 25, 1917. Retrieved January 3, 2013– via Google News.
  4. ↑ Crockett, Zachary (December 8, 2019). "Why some of America's top CEOs take a $1 salary". The Hustle. Retrieved January 10, 2024.
  5. ↑ "31 U.S. Code § 1342 – Limitation on voluntary services". Legal Information Institute. Archived from the original on March 12, 2014. Retrieved March 19, 2014.
  6. ↑ "How World War I Transformed Washington". Politico Magazine. Archived from the original on March 20, 2018. Retrieved March 19, 2018.
  7. ↑ "One Dollar a Year Men May Lose Two Months' Pay Because of Tax". Sacramento Union. March 14, 1919. Archived from the original on March 20, 2018. Retrieved March 19, 2018– via California Digital Newspaper Collection.
  8. ↑ "Exit the Dollar-a-Year Man". The Independent. New York. July 6, 1918. p. 16. Archived from the original on April 22, 2018 – via Google Books.
  9. ↑ Josephson, Matthew (1952). Sidney Hillman: Statesman of American Labor. Doubleday. p.  364 . Retrieved March 18, 2018.
  10. ↑ "The Century-Long History of Tapping Wall Street to Run the Government". Smithsonian. Retrieved March 20, 2018.
  11. ↑ Cipriano Venzon, Anne, ed. (1999). The United States in the First World War: An Encyclopedia. Routledge. pp. 203–204. ISBN   978-0-8153-3353-1. Archived from the original on February 2, 2017. Retrieved January 2, 2013– via Google Books.
  12. ↑ "National Recovery Administration: Code of Fair Competition for the Petroleum Industry". Archived from the original on August 8, 2014.
  13. ↑ National Archives Identifier: 7261744 HMS Entry Number: NC-79 28 Records Relating to the Blazer Committee Hearing, 1933 – 1936. Record Group 232: Records of the Petroleum Administrative Board, 1924 - 1936. Archived from the original on April 2, 2015.
  14. ↑ "'E Pluribus Unum!' 'One Out of Many' An Oil Company Grows Through Acquisitions, An Address at Lexington by member Paul G. Blazer, American Newcomen Society, copyright 1956 (page 6)" (PDF). Archived from the original (PDF) on December 1, 2008.
  15. ↑ "Fuller Explains Refusal of Salary". The New York Times. September 20, 1926. Archived from the original on November 3, 2012. Retrieved July 24, 2010.
  16. ↑ Pace, Eric (October 28, 1993). "Doris Duke, 80, Heiress Whose Great Wealth Couldn't Buy Happiness, Is Dead". The New York Times . Archived from the original on August 26, 2012. Retrieved January 2, 2013.
  17. ↑ Bailey, Art. "Clarence Decatur Howe". Canada's Digital Collections. Archived from the original on August 31, 2009.
  18. ↑ James, Mel. "John Wilson McConnell". Canada's Digital Collections. Archived from the original on November 27, 2009.
  19. ↑ "The History of Metropolitan Vancouver - 1965 Chronology". vancouverhistory.ca. Archived from the original on January 3, 2017.
  20. ↑ Tuttle, Mike (February 3, 2012). "Zuckerberg's One-Dollar Salary: Why Do CEOs Do That?". WebProNews. Archived from the original on April 3, 2013. Retrieved January 4, 2013.
  21. ↑ Ferguson, Kevin (January 6, 2012). "How does a dollar a year salary work?". The Madeleine Brand Show . 89.3 KPCC. Archived from the original on February 2, 2014. Retrieved January 4, 2013.
  22. ↑ Wood, Robert W. (April 5, 2014). "Tax-Smart Billionaires Who Work For $1". Forbes. Retrieved June 21, 2024.
  23. ↑ Chandler, Adam (November 16, 2016). "The Dollar-a-Year Man". The Atlantic. Archived from the original on March 19, 2018. Retrieved March 18, 2018.
  24. ↑ "How common is Trump's $1 salary?". BBC. November 14, 2016. Archived from the original on November 15, 2016.
  25. ↑ Nguyen, Tina (March 13, 2017). "Is Donald Trump Actually Donating His Presidential Salary?". Vanity Fair . Archived from the original on June 26, 2017.
  26. ↑ "Trump-O-Meter: Take no salary". PolitiFact. Retrieved September 16, 2018.
  27. ↑ "Trump-O-Meter". PolitiFact.
  28. ↑ "House panel: Trump's bills to Secret Service 'exorbitant'". AP News. October 18, 2022. Retrieved July 7, 2024.
  29. ↑ "Brisbane teenager calls on Malcolm Turnbull to take $1 salary". ABC News. September 26, 2015. Archived from the original on September 10, 2016. Retrieved February 19, 2018.
  30. ↑ Duncan, Corbin (October 2, 2015). "Why I want the Prime Minister to give up his $500,000 salary". The Sydney Morning Herald. Archived from the original on February 19, 2018. Retrieved February 19, 2018.
  31. ↑ Brush, Michael (January 17, 2012). "The myth of the $1 CEO – 1 – executive compensation –". MSN Money . MSN. Archived from the original on June 6, 2013. Retrieved January 2, 2013.
  32. 1 2 3 4 5 6 Herbst, Moira (September 14, 2007). "The Elite Circle of $1 CEOs". Bloomberg L.P. Archived from the original on September 24, 2015. Retrieved August 22, 2015.
  33. ↑ Mayerowitz, Scott (December 3, 2008). "The Other Side of the $1 Salary". ABC News. Archived from the original on September 7, 2009. Retrieved July 25, 2009.
  34. ↑ Margolis, Steven M. "IRS Extends Indefinitely Stock Option FICA/FUTA Tax Withholding Moratorium". Weil, Gotshal & Manges LLP. Archived from the original on November 9, 2013.
  35. ↑ Reich, Robert (January 9, 2001). The Future of Success. A. Knopf. p.  74. ISBN   0375411127.
  36. ↑ "How common is Trump's $1 salary?". BBC News. November 14, 2016. Retrieved June 28, 2018.
  37. ↑ "TELUS Annual Report 2011 – CEO letter to investors". About.telus.com. December 31, 1999. Archived from the original on February 4, 2013. Retrieved January 2, 2013.
  38. 1 2 3 4 5 6 Gillet, Rachel (August 14, 2015). "13 top executives who make a $1 salary or less". Business Insider Inc. Archived from the original on August 16, 2015. Retrieved August 15, 2015.
  39. ↑ Durisin, Megan (August 10, 2013). "Musk Gets $4.3 Million of Stock Options for Model X Work". Bloomberg. Archived from the original on January 16, 2014.
  40. 1 2 3 "Google SEC Filing 2006". Sec.gov. Archived from the original on December 7, 2012. Retrieved January 3, 2013.
  41. 1 2 Wells, Nick (March 1, 2017). "The real story behind Snap CEO Evan Spiegel's $1-a-year salary". CNBC . Archived from the original on August 18, 2017. Retrieved August 17, 2017.
  42. ↑ Fox, Emily Jane. "15 top executives with $1 salaries". CNNMoney . Archived from the original on February 20, 2017. Retrieved February 20, 2017.
  43. ↑ "Compensation for Henry Samueli, BROADCOM, Chairman of the Board of Directors (effective May 21, 2003)".[ permanent dead link ]
  44. 1 2 "How common is Trump's $1 salary?". BBC News. November 14, 2016. Archived from the original on November 15, 2016. Retrieved November 14, 2016.
  45. ↑ "WhatsApp founders Jan Koum and Brian Acton own nearly $9 billion in Facebook stock". The Economic Times. Archived from the original on February 20, 2017. Retrieved February 20, 2017.
  46. ↑ "10-Q Watch: Yahoo's Acquisitions; Yang Salary". paidContent.org. August 9, 2007. Archived from the original on February 10, 2009. Retrieved January 3, 2013.
  47. ↑ Chen, David W. (October 4, 2006). "The Goldman Sachs Crew That's Helping Run Trenton Government". p. 2. Archived from the original on June 8, 2011. Retrieved August 26, 2008.
  48. ↑ "The Dollar-a-Year Man". Forbes. May 8, 2002. Archived from the original on March 19, 2018. Retrieved March 18, 2018.
  49. ↑ Grubb, Jeffrey (April 5, 2013). "Zynga CEO volunteers to reduce his salary to $1". VentureBeat. Archived from the original on April 9, 2013. Retrieved April 15, 2013.
  50. ↑ "Facebook founder Mark Zuckerberg's base salary falls to $1". The Guardian . April 2, 2014. Archived from the original on April 2, 2014. Retrieved April 2, 2014.
  51. ↑ "HP CEO Meg Whitman's salary: $1". CNN Money. Archived from the original on October 1, 2011.
  52. ↑ "How does a dollar a year salary work?". KPCC. Southern California Public Radio. January 6, 2012. Archived from the original on February 2, 2014.
  53. ↑ "The 3.55 Billion Dollar Man". USA Today. Archived from the original on June 28, 2015.
  54. ↑ Heath, Thomas (September 8, 2014). "MicroStrategy CEO reduces pay to $1 from $875,000 following criticism of stewardship". The Washington Post. Archived from the original on July 26, 2024.
  55. ↑ Kharif, Olga; Contiliano, Tom (April 24, 2024). "MicroStrategy's Saylor Reaps a Stock Windfall During Bitcoin's Record Run". Bloomberg News. Archived from the original on April 29, 2024.
  56. ↑ "Marvell Tech's CEO, Acting COO Take Salary Cut, Each To Be Paid $1". MarketWatch. January 16, 2008.
  57. ↑ "Apple's 2012 Proxy" (PDF). Archived (PDF) from the original on September 7, 2012. Retrieved January 3, 2013.
  58. ↑ "Apple's 2009 Proxy". Investor.apple.com. January 7, 2009. Archived from the original on April 13, 2014. Retrieved January 3, 2013.
  59. ↑ "Apple's 2007 Proxy". Investor.apple.com. April 16, 2007. Archived from the original on April 13, 2014. Retrieved January 3, 2013.
  60. ↑ Dash, Eric (September 24, 2010). "Citigroup's Pandit Takes $1 in Compensation for 2010". The New York Times. ISSN   0362-4331. Archived from the original on February 2, 2017. Retrieved January 29, 2017.
  61. ↑ Baime, Albert (2014). The Arsenal of Democracy. New York: Houghton Mifflin Harcourt. pp. 72–73. ISBN   978-0-547-71928-3.

Further reading

This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.