Recently many CEOs have been completely criticized for taking more salaries. When compared to them some tax-smart billionaires take a one-dollar salary as their salary. It is foreseen as an alternative compensation which is much more beneficial than the regular salary. Only CEOs can take a $1 salary because they can afford it. Want to know the reason behind this $1 salary? Then continue reading our blog to know the great mastermind behind this $1 salary trend.
Why do CEOs take a one-dollar salary?
One-dollar salaries are used in situations where the CEO wishes to work without getting direct compensation. But for some legal reasons they must receive payment above zero which is why 1 dollar salary. Not every CEO receives a one-dollar salary, only CEOs under top companies will agree with this $1 salary as they can manage because of their extraordinary wealth.
Origin of One Dollar Salary
The one-dollar salary concept first emerged in the early 1900s during world war II, where various leaders of industry in the United States offered their services to the government during times of war.
Which of the Following CEOs takes a $1 Salary?
- A. Elon Musk
- B. Larry Page
- C. Steve Jobs
- D. All the Above
Later, in the late 1990s and early 2000s, many business executives began accepting one-dollar salaries due to the case of companies and startups. They agree to this one-dollar salary due to the potential of indirect earnings in the future as the result of their ownership of stock.
On the other hand, CEOs take lower salaries to avoid paying higher taxes. And they also get compensated through the stock as the tax on capital gain is much less. When compared to normal CEOs these one-dollar salary CEOs have more benefits. No matter how the company performs, normal CEOs get the fixed payment whereas one-dollar salary CEOs get compensated through stocks.
Meet the $1 CEO Club
Mark Zuckerberg, a famous CEO of Facebook used to earn a salary of $770,000 excluding bonuses. But, he has requested to reduce his annual wage to one dollar salary since 2013 which made him the lowest-paid Facebook employee. He is not the only one in this club. Other famous CEOs like
- Elon Musk, CEO and CO-founder of Tesla
- Larry Page and Sergey Brin from Google
- Richard Hayne, the CEO of Urban Outfitters
- Larry Page and Sergey Brin from Google
- Larry Ellison from Oracle
- Meg Whitman from HP
- Jack Dorsey, CEO of Twitter
- David Filo, the founder of CEO of Yahoo
- Robert Duggan, the CEO of Pharmacyclics