One-dollar salary

"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.[4] Those employed by the government had to be paid a nominal salary, and the salary establishes their legal relationship as employees of the government.[5] For example, Massachusetts Governor Alvan T. Fuller, wealthy in his own right, served in several government positions on such terms. 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[6] as Chairman of the Blazer Committee[7] and a second time during World War II as Chairman of District II Refining for President Roosevelt’s Petroleum Administration of War.[8][9] During World War II, socialite Doris Duke worked in a canteen for U.S. sailors in Egypt at such a salary.[10]

In Canada during World War II, C. D. Howe, Canada's "Minister of Everything", created a rearmament program using "dollar-a-year men".[11] 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.[12]

Some recent one-dollar salary earners worked in government as well, such as former California Governor Arnold Schwarzenegger,[13] former Massachusetts Governor Mitt Romney,[14] former New York City Mayor Michael Bloomberg, and Bloomberg's older daughter Emma who has also worked for the city.[15]

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.[16]

In some cases, in lieu of a salary, the executives receive stock options.[17][18] 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.[19]

Executives argue that remuneration through stock instead of salary ties management performance to their financial benefits.[17] 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.

Notable one-dollar salary earners

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

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. ↑ "31 U.S. Code § 1342 – Limitation on voluntary services". Legal Information Institute. Retrieved March 19, 2014.
  5. ↑ Anne Cipriano Venzon, ed., The United States in the First World War: An Encyclopedia (Routledge, 1999), 203–4 available online, accessed January 2, 2013
  6. ↑ "National Recovery Administration: Code of Fair Competition for the Petroleum Industry".
  7. ↑ "National Archives Identifier: 7261744 HMS Entry Number: NC-79 28 Records Relating to the Blazer Committee Hearing, 1933 – 1936".
  8. ↑ ""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).
  9. ↑ . New York Times: "Fuller Explains Refusal of Salary, September 20, 1926, accessed July 24, 2010
  10. ↑ 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.
  11. ↑ Art Bailey. "Clarence Decatur Howe". Canada's Digital Collections.
  12. ↑ Mel James. "John Wilson McConnell". Canada's Digital Collections.
  13. ↑ Mike Tuttle. "Zuckerberg's One-Dollar Salary: Why Do CEOs Do That?". WebProNews. Retrieved January 4, 2013.
  14. ↑ "How does a dollar a year salary work?C". Scpr.org. January 6, 2012. Retrieved January 4, 2013.
  15. ↑ Mark Halperin. The Undecided Voter's Guide to the Next President: Who the Candidates Are ... Retrieved January 4, 2013.
  16. ↑ Brush, Michael (January 17, 2012). "The myth of the $1 CEO – 1 – executive compensation – MSN Money". Money.msn.com. Retrieved January 2, 2013.
  17. ↑ 17.0 17.1 Herbst, Moira (May 10, 2007). "The Elite Circle of $1 CEOs". BusinessWeek. Retrieved July 25, 2009.
  18. ↑ Mayerowitz, Scott (December 3, 2008). "The Other Side of the $1 Salary". ABC News. Retrieved July 25, 2009.
  19. ↑ Margolis, Steven M. "IRS Extends Indefinitely Stock Option FICA/FUTA Tax Withholding Moratorium". Weil, Gotshal & Manges LLP.
  20. ↑ Megan Durisin (10 August 2013). "Musk Gets $4.3 Million of Stock Options for Model X Work". Bloomberg.
  21. ↑ 21.0 21.1 21.2 "Google SEC Filing 2006". Sec.gov. Retrieved January 3, 2013.
  22. ↑ "TELUS Annual Report 2011 – CEO letter to investors". About.telus.com. December 31, 1999. Retrieved January 2, 2013.
  23. ↑ 23.0 23.1 Moira Herbst. "The Elite Circle of $1 CEOs". Businessweek.com.
  24. ↑ "Quaid on government spending". Business Recorder. 14 December 2011. Retrieved November 15, 2012.
  25. ↑ "Apple's 2012 Proxy" (PDF). Retrieved January 3, 2013.
  26. ↑ "Apple's 2009 Proxy". Investor.apple.com. January 7, 2009. Retrieved January 3, 2013.
  27. ↑ "Apple's 2007 Proxy". Investor.apple.com. April 16, 2007. Retrieved January 3, 2013.
  28. ↑ "Whole Foods – a retail phenomenon", BBC News, June 6, 2007.
  29. ↑ N. R. Narayana Murthy
  30. ↑ Grubb, Jeffrey (5 April 2013). "Zynga CEO volunteers to reduce his salary to $1". VentureBeat. Retrieved 15 April 2013.
  31. ↑ Southern California Public Radio. "How does a dollar a year salary work?". KPCC.
  32. ↑ Compensation for Henry Samueli, BROADCOM, Chairman of the Board of Directors (effective May 21, 2003)
  33. ↑ Marvell Tech's CEO, Acting COO Take Salary Cut, Each To Be Paid $1, January 16, 2008.
  34. ↑ HP CEO Meg Whitman's salary: $1 at CNN Money
  35. ↑ "10-Q Watch: Yahoo's Acquisitions; Yang Salary". paidContent.org. August 9, 2007. Retrieved January 3, 2013.
  36. ↑ "Facebook founder Mark Zuckerberg's base salary falls to $1". The Guardian. April 2, 2014. Retrieved April 2, 2014.

Further reading