Would You Work for $1 a Year? Neither Would These CEOs…

Posted on 03. Feb, 2006 by in Business, News

What do Lawrence Page, Richard Fairbank, and Steve Jobs have in common? They only receive $1 a year salary. Sort of.

Too many people think the CEOs of Google, Apple, and others accept only $1 a year out of the goodness of their hearts – but little do they know that there are some underlying reasons for this “generosity.”

So why do they accept only $1 a year? Here are the real reasons:

  1. At a time when the average CEO makes about $10 million a year, the $1 salary makes for good public relations.
  2. The $1 is replaced with huge amounts of stock options. And with Google’s stock recently hovering around $400 you can probably imagine the huge payoff that comes when those shares are exercised and sold. If you can’t imagine, then let me tell you that Google’s Larry Page has grossed $1.5 Billion (yes, that’s billion with a ‘B’) selling Google shares since the beginning of 2005.
  3. Dividends. If a corporate executive doesn’t own options, he at least owns shares in the company – and if that company pays out annual dividends, like Kinder Morgan does, then it’s executive Richard Kinder brings home around $72 million each year.
  4. Corporate gifts – like Steve Jobs’ Gulfstream jet, money to pay your taxes, and travel expenses (and we’re not talking the Motel 6 here).

So as you can see, we shouldn’t be too impressed with the generosity of these larger-than-life CEOs and their “meager” salaries. If you offered to pay me $1 a year with a promise of $18 million in options… I would have a hard time turning you down.

CEO, Compensation, Executive Compensation, Apple, Google, Steve Jobs

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