One-dollar salary explained

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]

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.

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.

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

Further reading

Notes and References

  1. News: A Dollar for Your Thoughts: Silicon Valley's Famed Single-Digit Salaries . Isaac . Mike . February 10, 2012 . Wired . January 4, 2013 . https://web.archive.org/web/20130216125558/http://www.wired.com/business/2012/02/one-dollar-ceo-zuckerberg-page . February 16, 2013 . live .
  2. Web site: 10 High-Powered Executives with $1 Salaries . 14clicks.com . https://web.archive.org/web/20130106090434/http://14clicks.com/executives-1-dollar-salaries/ . January 6, 2013 . live . January 3, 2013 .
  3. News: Vanderlip Leaves Biggest Bank and Will Aid McAdoo . September 25, 1917 . January 3, 2013 . . Google News .
  4. Web site: Crockett . Zachary . 2019-12-08 . Why some of America's top CEOs take a $1 salary . 2024-01-10 . The Hustle . en-US.
  5. Web site: 31 U.S. Code § 1342 – Limitation on voluntary services . Legal Information Institute . https://web.archive.org/web/20140312234037/http://www.law.cornell.edu/uscode/text/31/1342 . March 12, 2014 . live . March 19, 2014 .
  6. News: How World War I Transformed Washington . Politico Magazine . March 19, 2018 . https://web.archive.org/web/20180320105510/https://www.politico.com/magazine/story/2014/08/washington-dc-world-war-one-109822 . March 20, 2018 . live .
  7. Web site: One Dollar a Year Men May Lose Two Months' Pay Because of Tax . March 14, 1919 . Sacramento Union . California Digital Newspaper Collection . https://web.archive.org/web/20180320043738/https://cdnc.ucr.edu/cgi-bin/cdnc?a=d&d=SU19190314.2.9 . March 20, 2018 . live . March 19, 2018 .
  8. News: Exit the Dollar-a-Year Man . The Independent . New York . July 6, 1918 . 16 . live . https://web.archive.org/web/20180422122131/https://books.google.com/books?id=gYgeAQAAMAAJ&pg=RA1-PA16&dq=%22dollar+a+year%22+men&hl=en&sa=X&ved=0ahUKEwjCpt7ShPzZAhWJzlMKHcMqA80Q6AEIQzAF#v=onepage&q=%22dollar%20a%20year%22%20men&f=false . April 22, 2018 . Google Books .
  9. Book: Josephson, Matthew . Matthew Josephson . Sidney Hillman: Statesman of American Labor . Doubleday . 364 . 1952 . March 18, 2018 .
  10. News: The Century-Long History of Tapping Wall Street to Run the Government . Smithsonian . March 20, 2018 . en .
  11. Book: Anne . Cipriano Venzon . The United States in the First World War: An Encyclopedia . Routledge . 1999 . 203–204 . 978-0-8153-3353-1 . https://web.archive.org/web/20170202033732/https://books.google.com/books?id=YiZRC8bsOuoC&pg=PA203& . February 2, 2017 . January 2, 2013 . Google Books .
  12. Web site: National Recovery Administration: Code of Fair Competition for the Petroleum Industry . live . https://web.archive.org/web/20140808052346/http://ufdc.ufl.edu/AA00006879/00001 . August 8, 2014 .
  13. Book: National Archives Identifier: 7261744 HMS Entry Number: NC-79 28 Records Relating to the Blazer Committee Hearing, 1933 – 1936 . live . https://web.archive.org/web/20150402155833/http://research.archives.gov/description/7261744 . April 2, 2015 . Record Group 232: Records of the Petroleum Administrative Board, 1924 - 1936 .
  14. Web site: '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) . https://web.archive.org/web/20081201150913/http://kykinfolk.com/kyboyd/general/Speech/1956Speech.pdf . dead . December 1, 2008 .
  15. News: The New York Times . Fuller Explains Refusal of Salary . September 20, 1926 . https://web.archive.org/web/20121103155241/http://select.nytimes.com/gst/abstract.html?res=F20A13FC345E1B7A93C2AB1782D85F428285F9& . November 3, 2012 . July 24, 2010 .
  16. News: Pace . Eric . Doris Duke, 80, Heiress Whose Great Wealth Couldn't Buy Happiness, Is Dead . . October 28, 1993 . January 2, 2013 . live . https://web.archive.org/web/20120826173510/http://www.nytimes.com/1993/10/29/obituaries/doris-duke-80-heiress-whose-great-wealth-couldn-t-buy-happiness-is-dead.html . August 26, 2012 .
  17. Web site: Clarence Decatur Howe . Canada's Digital Collections . Art . Bailey . dead . https://web.archive.org/web/20090831160915/http://collections.ic.gc.ca/heirloom_series/volume5/218-221.htm . August 31, 2009 .
  18. Web site: John Wilson McConnell . Canada's Digital Collections . Mel . James . dead . https://web.archive.org/web/20091127202507/http://collections.ic.gc.ca/heirloom_series/volume6/318-319.htm . November 27, 2009 .
  19. Web site: The History of Metropolitan Vancouver - 1965 Chronology . vancouverhistory.ca . live . https://web.archive.org/web/20170103010325/http://vancouverhistory.ca/chronology1965.htm . January 3, 2017 .
  20. Web site: Mike . Tuttle . Zuckerberg's One-Dollar Salary: Why Do CEOs Do That? . WebProNews . January 4, 2013 . live . https://web.archive.org/web/20130403174243/http://www.webpronews.com/zuckerbergs-one-dollar-salary-2012-02 . April 3, 2013 . February 3, 2012 .
  21. Web site: How does a dollar a year salary work? . . . Ferguson . Kevin . January 6, 2012 . January 4, 2013 . live . https://web.archive.org/web/20140202122510/http://www.scpr.org/programs/madeleine-brand/2012/01/06/22031/dollar-a-year/ . February 2, 2014 .
  22. News: Wood . Robert W. . Tax-Smart Billionaires Who Work For $1 . 21 June 2024 . Forbes . Apr 5, 2014.
  23. News: The Dollar-a-Year Man . The Atlantic . Adam . Chandler . November 16, 2016 . March 18, 2018 . live . https://web.archive.org/web/20180319085006/https://www.theatlantic.com/politics/archive/2016/11/trump-presidential-salary/507965/ . March 19, 2018 .
  24. Web site: How common is Trump's $1 salary? . November 14, 2016 . BBC . live . https://web.archive.org/web/20161115113433/http://www.bbc.co.uk/news/election-us-2016-37977433 . November 15, 2016 .
  25. Web site: Is Donald Trump Actually Donating His Presidential Salary? . . Tina . Nguyen . March 13, 2017 . live . https://web.archive.org/web/20170626153245/http://www.vanityfair.com/news/2017/03/donald-trump-salary-donation . June 26, 2017 .
  26. Web site: Trump-O-Meter: Take no salary . PolitiFact . September 16, 2018 .
  27. Web site: Trump-O-Meter . PolitiFact .
  28. Web site: 2022-10-18 . House panel: Trump's bills to Secret Service 'exorbitant' . 2024-07-07 . AP News . en.
  29. News: Brisbane teenager calls on Malcolm Turnbull to take $1 salary . September 26, 2015 . ABC News . February 19, 2018 . en-AU . live . https://web.archive.org/web/20160910122149/http://www.abc.net.au/news/2015-09-26/brisbane-teenager-calls-on-malcolm-turnbull-to-take-$1-salary/6806968 . September 10, 2016 .
  30. News: Why I want the Prime Minister to give up his $500,000 salary . Duncan . Corbin . October 2, 2015 . The Sydney Morning Herald . February 19, 2018 . en-US . live . https://web.archive.org/web/20180219151632/http://www.smh.com.au/comment/why-i-want-the-prime-minister-to-give-up-his-500000-salary-20151001-gjz3dy.html . February 19, 2018 .
  31. Web site: Brush . Michael . The myth of the $1 CEO – 1 – executive compensation – . . . January 17, 2012 . January 2, 2013 . dead . https://web.archive.org/web/20130606053938/http://money.msn.com/investing/the-myth-of-the-1-dollar-ceo-brush.aspx . June 6, 2013 .
  32. News: Moira . Herbst . The Elite Circle of $1 CEOs . September 14, 2007 . August 22, 2015 . https://web.archive.org/web/20150924194416/http://www.bloomberg.com/bw/stories/2007-09-14/the-elite-circle-of-1-ceosbusinessweek-business-news-stock-market-and-financial-advice . September 24, 2015 . live . Bloomberg L.P. .
  33. News: The Other Side of the $1 Salary . Mayerowitz . Scott . December 3, 2008 . ABC News . July 25, 2009 . live . https://web.archive.org/web/20090907054712/https://abcnews.go.com/Business/Economy/story?id=6378775&page=1 . September 7, 2009 .
  34. Web site: IRS Extends Indefinitely Stock Option FICA/FUTA Tax Withholding Moratorium . Steven M. . Margolis . Weil, Gotshal & Manges LLP . dead . https://web.archive.org/web/20131109092152/http://www.weil.com/news/pubdetail.aspx?pub=8044 . November 9, 2013 .
  35. Book: Reich, Robert . The Future of Success . January 9, 2001 . 74 . A. Knopf . 0375411127 . Robert Reich .
  36. Web site: How common is Trump's $1 salary? . November 14, 2016 . BBC News . June 28, 2018 .
  37. Web site: TELUS Annual Report 2011 – CEO letter to investors . December 31, 1999 . About.telus.com . https://web.archive.org/web/20130204041327/http://about.telus.com/investors/annualreport2011/our_message_and_team/ceos_letter/a_passion_for_growth/ . February 4, 2013 . dead . January 2, 2013 .
  38. Web site: 13 top executives who make a $1 salary or less . Gillet . Rachel . August 14, 2015 . Business Insider Inc. . https://web.archive.org/web/20150816184115/http://www.businessinsider.com/ceos-who-take-1-dollar-salary-or-less-2015-8 . August 16, 2015 . live . August 15, 2015 .
  39. News: Musk Gets $4.3 Million of Stock Options for Model X Work . Megan . Durisin . August 10, 2013 . Bloomberg . https://web.archive.org/web/20140116230047/http://www.bloomberg.com/news/2013-08-09/musk-gets-4-3-million-of-stock-options-for-model-x-work.html . January 16, 2014 . live .
  40. Web site: The real story behind Snap CEO Evan Spiegel's $1-a-year salary . Wells . Nick . . March 1, 2017 . https://web.archive.org/web/20170818010332/https://www.cnbc.com/2017/03/01/the-real-story-behind-snap-ceo-evan-spiegels-1-dollar-a-year-salary.html . August 18, 2017 . live . August 17, 2017 .
  41. News: 15 top executives with $1 salaries . Fox . Emily Jane . . February 20, 2017 . https://web.archive.org/web/20170220094337/http://money.cnn.com/gallery/news/2014/09/15/executives-one-dollar-salaries/13.html . February 20, 2017 . live .
  42. Web site: Compensation for Henry Samueli, BROADCOM, Chairman of the Board of Directors (effective May 21, 2003) .
  43. Web site: How common is Trump's $1 salary? . November 14, 2016 . BBC News . https://web.archive.org/web/20161115010640/http://www.bbc.co.uk/news/election-us-2016-37977433 . November 15, 2016 . live . November 14, 2016 .
  44. News: WhatsApp founders Jan Koum and Brian Acton own nearly $9 billion in Facebook stock . The Economic Times . February 20, 2017 . https://web.archive.org/web/20170220104717/http://economictimes.indiatimes.com/news/international/business/whatsapp-founders-jan-koum-and-brian-acton-own-nearly-9-billion-in-facebook-stock/articleshow/44978290.cms . February 20, 2017 . dead .
  45. Web site: 10-Q Watch: Yahoo's Acquisitions; Yang Salary . August 9, 2007 . . https://web.archive.org/web/20090210081959/http://www.paidcontent.org/entry/419-10-q-watch-yahoos-acquisitions-yang-salary/ . February 10, 2009 . live . January 3, 2013 .
  46. News: The Goldman Sachs Crew That's Helping Run Trenton Government . Chen . David W. . October 4, 2006 . August 26, 2008 . https://web.archive.org/web/20110608115605/http://www.nytimes.com/2006/10/04/nyregion/04goldman.html . June 8, 2011 . live . 2 .
  47. News: The Dollar-a-Year Man . May 8, 2002 . March 18, 2018 . https://web.archive.org/web/20180319085144/https://www.forbes.com/2002/05/08/0508iacocca.html#78e93a271c34 . March 19, 2018 . live . Forbes .
  48. News: Zynga CEO volunteers to reduce his salary to $1 . Grubb . Jeffrey . April 5, 2013 . VentureBeat . April 15, 2013 . https://web.archive.org/web/20130409143601/http://venturebeat.com/2013/04/05/zynga-ceo-volunteers-to-reduce-his-salary-to-1/ . April 9, 2013 . live .
  49. Web site: Facebook founder Mark Zuckerberg's base salary falls to $1 . April 2, 2014 . . https://web.archive.org/web/20140402034006/http://www.theguardian.com/technology/2014/apr/01/facebook-founder-mark-zuckerberg-base-salary-one-dollar . April 2, 2014 . live . April 2, 2014 .
  50. News: HP CEO Meg Whitman's salary: $1 . https://web.archive.org/web/20111001071805/http://money.cnn.com/2011/09/30/technology/meg_whitman_salary/index.htm?source=cnn_bin . October 1, 2011 . CNN Money .
  51. Web site: How does a dollar a year salary work? . Southern California Public Radio . KPCC . https://web.archive.org/web/20140202122510/http://www.scpr.org/programs/madeleine-brand/2012/01/06/22031/dollar-a-year/ . February 2, 2014 . live . January 6, 2012 .
  52. Web site: The 3.55 Billion Dollar Man . USA Today . https://web.archive.org/web/20150628091954/http://americasmarkets.usatoday.com/2015/03/24/the-3-55-billion-man/ . June 28, 2015 . live .
  53. News: Heath . Thomas . September 8, 2014 . MicroStrategy CEO reduces pay to $1 from $875,000 following criticism of stewardship . The Washington Post . https://archive.today/20240726033929/https://www.washingtonpost.com/business/capitalbusiness/microstrategy-ceo-reduces-pay-from-875k-to-1-following-criticism-of-his-stewardship/2014/09/08/483ae2c6-377f-11e4-bdfb-de4104544a37_story.html . July 26, 2024 . live.
  54. News: Kharif . Olga . Contiliano . Tom . April 24, 2024 . MicroStrategy's Saylor Reaps a Stock Windfall During Bitcoin's Record Run . Bloomberg News . https://archive.today/20240429215835/https://www.bloomberg.com/news/articles/2024-04-29/microstrategy-s-saylor-reaps-a-stock-windfall-during-bitcoin-s-record-run . April 29, 2024 . live.
  55. News: Marvell Tech's CEO, Acting COO Take Salary Cut, Each To Be Paid $1 . MarketWatch . January 16, 2008 .
  56. Web site: Google SEC Filing 2006 . Sec.gov . January 3, 2013 . live . https://web.archive.org/web/20121207173148/http://www.sec.gov/Archives/edgar/data/1288776/000119312506010016/d8k.htm . December 7, 2012 .
  57. Web site: Apple's 2012 Proxy . https://web.archive.org/web/20120907093237/http://files.shareholder.com/downloads/AAPL/1661508868x0x531628/b6ec469d-aff8-4eef-9077-1defc2258f6b/2012_Proxy.pdf . September 7, 2012 . live . January 3, 2013 .
  58. Web site: Apple's 2009 Proxy . January 7, 2009 . Investor.apple.com . https://web.archive.org/web/20140413150351/http://investor.apple.com/secfiling.cfm?filingID=1193125-09-2537&CIK=320193 . April 13, 2014 . dead . January 3, 2013 .
  59. Web site: Apple's 2007 Proxy . April 16, 2007 . Investor.apple.com . https://web.archive.org/web/20140413142842/http://investor.apple.com/secfiling.cfm?filingID=1104659-07-28382&CIK=320193 . April 13, 2014 . dead . January 3, 2013 .
  60. News: Citigroup's Pandit Takes $1 in Compensation for 2010 . Dash . Eric . September 24, 2010 . The New York Times . January 29, 2017 . https://web.archive.org/web/20170202070020/http://www.nytimes.com/2010/09/25/business/25citi.html . February 2, 2017 . live . 0362-4331 .
  61. Book: The Arsenal of Democracy . 2014 . Houghton Mifflin Harcourt . 978-0-547-71928-3 . New York . 72–73 . Baime . Albert .

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "One-dollar salary".

Except where otherwise indicated, Everything.Explained.Today is © Copyright 2009-2024, A B Cryer, All Rights Reserved. Cookie policy.