One-dollar salary

Notable earners of one dollar salaries
John Wilson McConnell
Arnold Schwarzenegger
Michael Bloomberg
Various dollar-a-year men in 1922

A number of top executives in large businesses and governments have worked for a one-dollar salary.[1][2][3]

In the early 1900s, "dollar-a-year men" were business and government executives employed by multiple governments, mainly during wartime for a salary of one dollar, to help manage the government. During World War I, about 1,000 such people were employed by the United States.[4] While they received only a dollar in salary from the government, most executives had their salaries paid by the companies.

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. US 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]

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.[7] 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.[8] 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.[9] 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.[10]

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[11] as Chairman of the Blazer Committee[12] and a second time during World War II as Chairman of District II Refining for President Roosevelt's Petroleum Administration of War.[13][14] During World War II, socialite Doris Duke worked in a canteen for U.S. sailors in Egypt at such a salary.[15]

In Canada during World War II, C. D. Howe, Canada's "Minister of Everything", created a rearmament program using "dollar-a-year men".[16] 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.[17] Others include E. P. Taylor and Austin Cotterell Taylor.[18]

Recent examples

Some recent one-dollar salary earners worked in government as well, such as former California Governor Arnold Schwarzenegger,[19] former Massachusetts Governor Mitt Romney,[20] former New York City Mayor Michael Bloomberg, and Bloomberg's older daughter Emma, who has also worked for the city.

After promising to take only a dollar a year in November 2016, US 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.[21][22] This was due to the fact that he had initially said he wanted to only accept a $1 salary,[23] but was informed that it was not legally possible to forgo the majority of the full salary.[24][25]

In 2015, then 15-year-old Corbin Duncan petitioned the Australian Prime Minister to take up a $1 salary.[26] The petition was unsuccessful but gained international media coverage.[27]

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.[28]

In some cases, in lieu of a salary, the executives receive stock options.[29][30] 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.[31]

Executives argue that remuneration through stock instead of salary ties management performance to their financial benefits.[29] 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.[32]

Notable one-dollar salary earners

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

Cultural references

In November 1939, I.F. Stone published an article entitled "Portrait of a Dollar-a-Year Man" in which, Stone's biographer wrote, exposed the "self-dealing reality behind the self-serving rhetoric of the new breed of businessmen-administrators, who in many cases replaced New Dealers forced out by the red scare that swept Washington after the pact... Their business-as-usual mentality made them easy targets.[61][62]

References

  1. ↑ Isaac, Mike (February 10, 2012). "A Dollar for Your Thoughts: Silicon Valley's Famed Single-Digit Salaries". Wired. Archived from the original on February 16, 2013. Retrieved January 4, 2013.
  2. ↑ "10 High-Powered Executives with $1 Salaries". 14clicks.com. Archived from the original on January 6, 2013. 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. ↑ "One Dollar a Year Men May Lose Two Months' Pay Because of Tax". Sacramento Union — California Digital Newspaper Collection. March 14, 1919. Archived from the original on March 20, 2018. Retrieved March 19, 2018.
  5. ↑ "31 U.S. Code § 1342 – Limitation on voluntary services". Legal Information Institute. Archived from the original on March 12, 2014. Retrieved March 19, 2014.
  6. ↑ "How World War I Transformed Washington". POLITICO Magazine. Archived from the original on March 20, 2018. Retrieved March 19, 2018.
  7. ↑ The Independent. Independent Publications, incorporated. 1918. Archived from the original on April 22, 2018.
  8. ↑ Josephson, Matthew (1952). Sidney Hillman: Statesman of American Labor. Doubleday. p. 364. Retrieved March 18, 2018.
  9. ↑ "The Century-Long History of Tapping Wall Street to Run the Government". Smithsonian. Retrieved March 20, 2018.
  10. ↑ Anne Cipriano Venzon, ed., The United States in the First World War: An Encyclopedia (Routledge, 1999), 203–4 available online Archived February 2, 2017, at the Wayback Machine.. Retrieved January 2, 2013
  11. ↑ "National Recovery Administration: Code of Fair Competition for the Petroleum Industry". Archived from the original on August 8, 2014.
  12. ↑ "National Archives Identifier: 7261744 HMS Entry Number: NC-79 28 Records Relating to the Blazer Committee Hearing, 1933 – 1936". Archived from the original on April 2, 2015.
  13. ↑ ""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).
  14. ↑ The New York Times: "Fuller Explains Refusal of Salary, September 20, 1926 Archived November 3, 2012, at the Wayback Machine.. Retrieved July 24, 2010
  15. ↑ Pace, Eric (October 28, 1993). "Doris Duke, 80, Heiress Whose Great Wealth Couldn't Buy Happiness, Is Dead". The New York Times. Archived from the original on August 26, 2012. Retrieved January 2, 2013.
  16. ↑ Art Bailey. "Clarence Decatur Howe". Canada's Digital Collections. Archived from the original on August 31, 2009.
  17. ↑ Mel James. "John Wilson McConnell". Canada's Digital Collections. Archived from the original on November 27, 2009.
  18. ↑ "The History of Metropolitan Vancouver - 1965 Chronology". vancouverhistory.ca. Archived from the original on January 3, 2017.
  19. ↑ Mike Tuttle. "Zuckerberg's One-Dollar Salary: Why Do CEOs Do That?". WebProNews. Archived from the original on April 3, 2013. Retrieved January 4, 2013.
  20. ↑ Ferguson, Kevin (January 6, 2012). "How does a dollar a year salary work?". The Madeleine Brand Show. 89.3 KPCC. Archived from the original on February 2, 2014. Retrieved January 4, 2013.
  21. ↑ Chandler, Adam (November 16, 2016). "The Dollar-a-Year Man". The Atlantic. Archived from the original on March 19, 2018. Retrieved March 18, 2018.
  22. ↑ Fredericks, Bob (April 4, 2017). "Trump donating salary to National Park Service". New York Post. Archived from the original on September 26, 2017.
  23. ↑ "How common is Trump's $1 salary?". BBC. November 14, 2016. Archived from the original on November 15, 2016.
  24. ↑ Nguyen, Tina (March 13, 2017). "Is Donald Trump Actually Donating His Presidential Salary?". Vanity Fair. Archived from the original on June 26, 2017.
  25. ↑ "Trump-O-Meter: Take no salary". PolitiFact. Retrieved 2018-09-16.
  26. ↑ "Brisbane teenager calls on Malcolm Turnbull to take $1 salary". ABC News. September 26, 2015. Archived from the original on September 10, 2016. Retrieved February 19, 2018.
  27. ↑ Duncan, Corbin (October 2, 2015). "Why I want the Prime Minister to give up his $500,000 salary". The Sydney Morning Herald. Archived from the original on February 19, 2018. Retrieved February 19, 2018.
  28. ↑ Brush, Michael (January 17, 2012). "The myth of the $1 CEO – 1 – executive compensation –". MSN Money. MSN. Archived from the original on June 6, 2013. Retrieved January 2, 2013.
  29. 1 2 Herbst, Moira (May 10, 2007). "The Elite Circle of $1 CEOs". Bloomberg BusinessWeek. Archived from the original on May 29, 2009. Retrieved July 25, 2009.
  30. ↑ Mayerowitz, Scott (December 3, 2008). "The Other Side of the $1 Salary". ABC News. Archived from the original on September 7, 2009. Retrieved July 25, 2009.
  31. ↑ Margolis, Steven M. "IRS Extends Indefinitely Stock Option FICA/FUTA Tax Withholding Moratorium". Weil, Gotshal & Manges LLP. Archived from the original on November 9, 2013.
  32. ↑ Robert Reich (January 9, 2001). The Future of Success. p. 74. ISBN 0375411127.
  33. 1 2 3 "Google SEC Filing 2006". Sec.gov. Archived from the original on December 7, 2012. Retrieved January 3, 2013.
  34. ↑ Chen, David W. (October 4, 2006). "The Goldman Sachs Crew That's Helping Run Trenton Government". p. 2. Archived from the original on June 8, 2011. Retrieved August 26, 2008.
  35. 1 2 3 4 5 6 Gillet, Rachel (August 14, 2015). "13 top executives who make a $1 salary or less". Business Insider Inc. Archived from the original on August 16, 2015. Retrieved August 15, 2015.
  36. ↑ "The 3.55 Billion Dollar Man". USA Today. Archived from the original on June 28, 2015.
  37. ↑ "TELUS Annual Report 2011 – CEO letter to investors". About.telus.com. December 31, 1999. Archived from the original on February 4, 2013. Retrieved January 2, 2013.
  38. 1 2 3 Moira Herbst. "The Elite Circle of $1 CEOs". Bloomberg BusinessWeek. Archived from the original on May 3, 2013.
  39. 1 2 "How common is Trump's $1 salary?". BBC News. November 14, 2016. Archived from the original on November 15, 2016. Retrieved November 14, 2016.
  40. ↑ "The Elite Circle of $1 CEOs". Bloomberg L.P. September 14, 2007. Archived from the original on September 24, 2015. Retrieved August 22, 2015.
  41. ↑ "The Dollar-a-Year Man". Forbes. May 8, 2002. Archived from the original on March 19, 2018. Retrieved March 18, 2018.
  42. ↑ "Apple's 2012 Proxy" (PDF). Archived (PDF) from the original on September 7, 2012. Retrieved January 3, 2013.
  43. ↑ "Apple's 2009 Proxy". Investor.apple.com. January 7, 2009. Archived from the original on April 13, 2014. Retrieved January 3, 2013.
  44. ↑ "Apple's 2007 Proxy". Investor.apple.com. April 16, 2007. Archived from the original on April 13, 2014. Retrieved January 3, 2013.
  45. ↑ Baime, Albert (2014). The Arsenal of Democracy. New York, New York: Houghton Mifflin Harcourt. pp. 72–73. ISBN 978-0-547-71928-3.
  46. ↑ "WhatsApp founders Jan Koum and Brian Acton own nearly $9 billion in Facebook stock". The Economic Times. Archived from the original on February 20, 2017. Retrieved February 20, 2017.
  47. ↑ Fox, Emily Jane. "15 top executives with $1 salaries". CNNMoney. Archived from the original on February 20, 2017. Retrieved February 20, 2017.
  48. 1 2 Wells, Nick (March 1, 2017). "The real story behind Snap CEO Evan Spiegel's $1-a-year salary". Archived from the original on August 18, 2017. Retrieved August 17, 2017.
  49. ↑ N. R. Narayana Murthy
  50. ↑ Megan Durisin (August 10, 2013). "Musk Gets $4.3 Million of Stock Options for Model X Work". Bloomberg. Archived from the original on January 16, 2014.
  51. ↑ Dash, Eric (September 24, 2010). "Citigroup's Pandit Takes $1 in Compensation for 2010". The New York Times. ISSN 0362-4331. Archived from the original on February 2, 2017. Retrieved January 29, 2017.
  52. ↑ Grubb, Jeffrey (April 5, 2013). "Zynga CEO volunteers to reduce his salary to $1". VentureBeat. Archived from the original on April 9, 2013. Retrieved April 15, 2013.
  53. ↑ Southern California Public Radio. "How does a dollar a year salary work?". KPCC. Archived from the original on February 2, 2014.
  54. ↑ Compensation for Henry Samueli, BROADCOM, Chairman of the Board of Directors (effective May 21, 2003)
  55. ↑ "How common is Trump's $1 salary?". BBC News. 14 November 2016. Retrieved 28 June 2018.
  56. ↑ Marvell Tech's CEO, Acting COO Take Salary Cut, Each To Be Paid $1, January 16, 2008.
  57. ↑ "Archived copy". Archived from the original on January 22, 2017. Retrieved January 22, 2017. "How common is Trump's $1 salary?". BBC News. November 14, 2016. Archived from the original on March 16, 2018. Retrieved April 4, 2018.
  58. ↑ HP CEO Meg Whitman's salary: $1 Archived October 1, 2011, at the Wayback Machine. at CNN Money
  59. ↑ "10-Q Watch: Yahoo's Acquisitions; Yang Salary". paidContent.org. August 9, 2007. Archived from the original on February 10, 2009. Retrieved January 3, 2013.
  60. ↑ "Facebook founder Mark Zuckerberg's base salary falls to $1". The Guardian. April 2, 2014. Archived from the original on April 2, 2014. Retrieved April 2, 2014.
  61. ↑ Stone, I.F. (September 30, 1939). "Portrait of a Dollar-a-Year Man". The Nation. Nation Institute. pp. 345–346. Archived from the original on March 19, 2018. Retrieved March 18, 2018.
  62. ↑ Guttenplan, Don David (2006). The Invention of I.F. Stone: The Early Life and Career of I.F. Stone, 1907-1953 (PDF) (Thesis). University of London. pp. 227–228. Archived (PDF) from the original on October 22, 2015. Retrieved March 18, 2018.

Further reading

  • Kimes, Mina (June 1, 2011). "A $1 CEO isn't a bargain". Retrieved March 20, 2015.
  • Hamm, Jung, and Wang (2015). Making Sense of One Dollar CEO Salaries. Contemporary Accounting Research, 32 (3): 941-972, Fall 2015.
  • Reagan, Michael D. (1959) "Serving two masters : problems in the employment of dollar-a-year and without compensation personnel" PhD Dissertation, Princeton University
  • Cuff, Robert D. (1967). "A "Dollar-a-Year Man" in Government: George N. Peek and the War Industries Board". The Business History Review. 41: 404–420.
  • Stewart, Jeremy (2013) "Captains of Industry Crewing the Ship of State: Dollar-a-Year Men and Industrial Mobilization in WWII Canada, 1939-1942" Thesis, University of Calgary
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