One-dollar salary

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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 people

The "Dollar-a-year people" 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.[20]

Notable one-dollar salary earners

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

References

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  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
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  9. . New York Times: "Fuller Explains Refusal of Salary, September 20, 1926, accessed July 24, 2010
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  30. "Whole Foods – a retail phenomenon", BBC News, June 6, 2007.
  31. N. R. Narayana Murthy
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  35. Compensation for Henry Samueli, BROADCOM, Chairman of the Board of Directors (effective May 21, 2003)
  36. Marvell Tech's CEO, Acting COO Take Salary Cut, Each To Be Paid $1, January 16, 2008.
  37. HP CEO Meg Whitman's salary: $1 at CNN Money
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Further reading

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  • Hamm, Jung, and Wang (2015). "Making Sense of One Dollar CEO Salaries". Contemporary Accounting Research, 32 (3): 941-972, Fall 2015.