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One-dollar salary

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"Dollar-a-year man" redirects here. For the 1921 film, see The Dollar-a-Year Man.
Notable earners of one dollar salaries
Herbert Hoover
Arnold Schwarzenegger
Steve Jobs

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

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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.[citation needed]

World War I

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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

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Massachusetts Governor Alvan T. Fuller, wealthy in his own right, served in several government positions on such terms.[citation needed]

New Deal and World War II

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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

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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

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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

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

See also

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References

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  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 – via Google News.
  4. ^ Crockett, Zachary (December 8, 2019). "Why some of America's top CEOs take a $1 salary". The Hustle. Retrieved January 10, 2024.
  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. ^ "One Dollar a Year Men May Lose Two Months' Pay Because of Tax". Sacramento Union. March 14, 1919. Archived from the original on March 20, 2018. Retrieved March 19, 2018 – via California Digital Newspaper Collection.
  8. ^ "Exit the Dollar-a-Year Man". The Independent. New York. July 6, 1918. p. 16. Archived from the original on April 22, 2018 – via Google Books.
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  10. ^ "The Century-Long History of Tapping Wall Street to Run the Government". Smithsonian. Retrieved March 20, 2018.
  11. ^ Cipriano Venzon, Anne, ed. (1999). The United States in the First World War: An Encyclopedia. Routledge. pp. 203–204. ISBN 978-0-8153-3353-1. Archived from the original on February 2, 2017. Retrieved January 2, 2013 – via Google Books.
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  13. ^ National Archives Identifier: 7261744 HMS Entry Number: NC-79 28 Records Relating to the Blazer Committee Hearing, 1933 – 1936. Record Group 232: Records of the Petroleum Administrative Board, 1924 - 1936. Archived from the original on April 2, 2015.
  14. ^ "'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). Archived from the original (PDF) on December 1, 2008.
  15. ^ "Fuller Explains Refusal of Salary". The New York Times. September 20, 1926. Archived from the original on November 3, 2012. Retrieved July 24, 2010.
  16. ^ 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.
  17. ^ Bailey, Art. "Clarence Decatur Howe". Canada's Digital Collections. Archived from the original on August 31, 2009.
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  19. ^ "The History of Metropolitan Vancouver - 1965 Chronology". vancouverhistory.ca. Archived from the original on January 3, 2017.
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  21. ^ 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.
  22. ^ Wood, Robert W. (April 5, 2014). "Tax-Smart Billionaires Who Work For $1". Forbes. Retrieved June 21, 2024.
  23. ^ Chandler, Adam (November 16, 2016). "The Dollar-a-Year Man". The Atlantic. Archived from the original on March 19, 2018. Retrieved March 18, 2018.
  24. ^ "How common is Trump's $1 salary?". BBC. November 14, 2016. Archived from the original on November 15, 2016.
  25. ^ Nguyen, Tina (March 13, 2017). "Is Donald Trump Actually Donating His Presidential Salary?". Vanity Fair. Archived from the original on June 26, 2017.
  26. ^ "Trump-O-Meter: Take no salary". PolitiFact. Retrieved September 16, 2018.
  27. ^ "Trump-O-Meter". PolitiFact.
  28. ^ "House panel: Trump's bills to Secret Service 'exorbitant'". AP News. October 18, 2022. Retrieved July 7, 2024.
  29. ^ "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.
  30. ^ 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.
  31. ^ 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.
  32. ^ a b c d e f Herbst, Moira (September 14, 2007). "The Elite Circle of $1 CEOs". Bloomberg L.P. Archived from the original on September 24, 2015. Retrieved August 22, 2015.
  33. ^ 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.
  34. ^ 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.
  35. ^ Reich, Robert (January 9, 2001). The Future of Success. A. Knopf. p. 74. ISBN 0375411127.
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  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. ^ a b c d e f 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.
  39. ^ Durisin, Megan (August 10, 2013). "Musk Gets $4.3 Million of Stock Options for Model X Work". Bloomberg. Archived from the original on January 16, 2014.
  40. ^ a b c "Google SEC Filing 2006". Sec.gov. Archived from the original on December 7, 2012. Retrieved January 3, 2013.
  41. ^ a b Wells, Nick (March 1, 2017). "The real story behind Snap CEO Evan Spiegel's $1-a-year salary". CNBC. Archived from the original on August 18, 2017. Retrieved August 17, 2017.
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  43. ^ "Compensation for Henry Samueli, BROADCOM, Chairman of the Board of Directors (effective May 21, 2003)".[permanent dead link]
  44. ^ a b "How common is Trump's $1 salary?". BBC News. November 14, 2016. Archived from the original on November 15, 2016. Retrieved November 14, 2016.
  45. ^ "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.
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  52. ^ "How does a dollar a year salary work?". KPCC. Southern California Public Radio. January 6, 2012. Archived from the original on February 2, 2014.
  53. ^ "The 3.55 Billion Dollar Man". USA Today. Archived from the original on June 28, 2015.
  54. ^ Heath, Thomas (September 8, 2014). "MicroStrategy CEO reduces pay to $1 from $875,000 following criticism of stewardship". The Washington Post. Archived from the original on July 26, 2024.
  55. ^ Kharif, Olga; Contiliano, Tom (April 24, 2024). "MicroStrategy's Saylor Reaps a Stock Windfall During Bitcoin's Record Run". Bloomberg News. Archived from the original on April 29, 2024.
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  58. ^ "Apple's 2009 Proxy". Investor.apple.com. January 7, 2009. Archived from the original on April 13, 2014. Retrieved January 3, 2013.
  59. ^ "Apple's 2007 Proxy". Investor.apple.com. April 16, 2007. Archived from the original on April 13, 2014. Retrieved January 3, 2013.
  60. ^ 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.
  61. ^ Baime, Albert (2014). The Arsenal of Democracy. New York: Houghton Mifflin Harcourt. pp. 72–73. ISBN 978-0-547-71928-3.

Further reading

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