One-dollar salary

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"Dollar-a-year man" redirects here. For the 1921 film, see The Dollar-a-Year Man.

A number of top executives in large businesses and governments have worked for an annual salary of one United States dollar.[1][2][3]

Dollar-a-year men

The "dollar-a-year men" were business and government executives who helped the government mobilize and manage American industry during periods of war, especially World War I, World War II, and the Korean War. U.S. law forbids the government from accepting the services of unpaid volunteers.[citation needed] Those employed by the government had to be paid a nominal salary, and the salary establishes their legal relationship as employees of the government.[4] For example, Massachusetts Governor Alvan T. Fuller, wealthy in his own right, served in several government positions on such terms.[5] During World War II, socialite Doris Duke worked in a canteen for U.S. sailors in Egypt at such a salary.[6]

In Canada during World War II, C. D. Howe, Canada's "Minister of Everything", created a rearmament program using "dollar-a-year men".[7] 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.[8]

Some modern-day one-dollar salary earners worked in government as well, such as California Governor Arnold Schwarzenegger,[9] Massachusetts Governor Mitt Romney,[10] New York City Mayor Michael Bloomberg, and Bloomberg's older daughter Emma who has also worked for the city.[11]

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 Founder and CEO Larry Ellison made only $1 in salary, but earned over $77 million in other forms of compensation.[12]

In some cases, in lieu of a salary, the executives receive stock options.[13][14] 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.[15] Perhaps more significantly, since long term capital gains aren't considered in determining whether a taxpayer qualifies for the alternative minimum tax, a salary below the AMT exclusion limit allows CEOs to pay 23.5% in long term capital gains taxes on substantial stock gains rather than a 28% AMT rate. Formerly, the difference was even more significant with a 15% long term capital gains rate compared with a 28% AMT rate.

Executives argue that remuneration through stock instead of salary ties management performance to their financial benefits.[13] 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.

Single-digit salary earners

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

Eric Schmidt
Meg Whitman

References

  1. ↑ Isaac, Mike. "A Dollar for Your Thoughts: Silicon Valley's Famed Single-Digit Salaries". Wired.com. Retrieved January 3, 2013. 
  2. ↑ "10 High-Powered Executives with $1 Salaries". 14clicks.com. Retrieved January 3, 2013. 
  3. ↑ "Vanderlip Leaves Biggest Bank and Will Aid McAdoo". The Owosso Argus-Press. September 25, 1917. Retrieved January 3, 2013. 
  4. ↑ Anne Cipriano Venzon, ed., The United States in the First World War: An Encyclopedia (Routledge, 1999), 203–4 available online, accessed January 2, 2013
  5. ↑ New York Times: "Fuller Explains Refusal of Salary, September 20, 1926, accessed July 24, 2010
  6. ↑ Pace, Eric (October 28, 1993). "Doris Duke, 80, Heiress Whose Great Wealth Couldn't Buy Happiness, Is Dead". The New York Times. Retrieved January 2, 2013. 
  7. ↑ Art Bailey. "Clarence Decatur Howe". Canada's Digital Collections. 
  8. ↑ Mel James. "John Wilson McConnell". Canada's Digital Collections. 
  9. ↑ Mike Tuttle. "Zuckerberg's One-Dollar Salary: Why Do CEOs Do That?". WebProNews. Retrieved January 4, 2013. 
  10. ↑ "How does a dollar a year salary work?C". Scpr.org. January 6, 2012. Retrieved January 4, 2013. 
  11. ↑ Mark Halperin. The Undecided Voter's Guide to the Next President: Who the Candidates Are .... Retrieved January 4, 2013. 
  12. ↑ Brush, Michael (January 17, 2012). "The myth of the $1 CEO – 1 – executive compensation – MSN Money". Money.msn.com. Retrieved January 2, 2013. 
  13. ↑ 13.0 13.1 Herbst, Moira (May 10, 2007). "The Elite Circle of $1 CEOs". BusinessWeek. Retrieved July 25, 2009. 
  14. ↑ Mayerowitz, Scott (December 3, 2008). "The Other Side of the $1 Salary". ABC News. Retrieved July 25, 2009. 
  15. ↑ Margolis, Steven M. "IRS Extends Indefinitely Stock Option FICA/FUTA Tax Withholding Moratorium". Weil, Gotshal & Manges LLP. 
  16. ↑ "Quaid on government spending". Business Recorder. 14 December 2011. Retrieved November 15, 2012. 
  17. ↑ N. R. Narayana Murthy
  18. ↑ 18.0 18.1 18.2 "Google SEC Filing 2006". Sec.gov. Retrieved January 3, 2013. 
  19. ↑ "TELUS Annual Report 2011 – CEO letter to investors". About.telus.com. December 31, 1999. Retrieved January 2, 2013. 
  20. ↑ 20.0 20.1
  21. ↑ "Apple's 2012 Proxy" (PDF). Retrieved January 3, 2013. 
  22. ↑ "Apple's 2009 Proxy". Investor.apple.com. January 7, 2009. Retrieved January 3, 2013. 
  23. ↑ "Apple's 2007 Proxy". Investor.apple.com. April 16, 2007. Retrieved January 3, 2013. 
  24. ↑ "Whole Foods – a retail phenomenon", BBC News, June 6, 2007.
  25. ↑ Grubb, Jeffrey (5 April 2013). "Zynga CEO volunteers to reduce his salary to $1 Read more at http://venturebeat.com/2013/04/05/zynga-ceo-volunteers-to-reduce-his-salary-to-1/#UOFr7R2T0kKZeX33.99". VentureBeat. Retrieved 15 April 2013. 
  26. ↑
  27. ↑ Compensation for Henry Samueli, BROADCOM, Chairman of the Board of Directors (effective May 21, 2003)
  28. ↑ 28.0 28.1 {3C6E2756-3E5B-4566-8AC4-F6F5929D42C6} Marvell Tech's CEO, Acting COO Take Salary Cut, Each To Be Paid $1, January 16, 2008.
  29. ↑ HP CEO Meg Whitman's salary: $1 at CNN Money
  30. ↑ "10-Q Watch: Yahoo's Acquisitions; Yang Salary". paidContent.org. August 9, 2007. Retrieved January 3, 2013. 

Further reading

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