A number of high-profile CEOs are turning down bumper pay packets and pushing for a nominal one-dollar annual wage.
What do Facebook’s Mark Zuckerberg, Snapchat’s Evan Spiegel and Alphabet’s Larry Page all have in common? Besides being CEOs of some of the world’s largest tech companies, they also all take a US$1 salary.
On the surface, it may seem counterintuitive for a CEO to reject a higher salary and accept a single dollar a year. But in the vast majority of cases, cash compensation is only one part of the total executive remuneration package CEOs will be receiving, with alternative payments such as stock options or performance-linked bonuses often being far more valuable.
By foregoing a large cash salary and being compensated in company equity, CEOs prove they are closely aligned with shareholders’ aims and inextricably link their personal financial performance to business success.
Other CEOs simply don’t need the income. “Many of the CEOs who elect a one-dollar wage are founders of their companies, so they probably have enough ownership in the company to a point where they do not need to be paid a salary,” says Courtney Yu, Director of Research at Equilar, an executive compensation research firm.
UPS AND DOWNS
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