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Image via WikipediaMake Monwy Blog$;Lottery aficionados know the term “a dollar and a dream,” where just one buck can make you rich.
An elite group in the business world are taking that philosophy to heart. We have found eight CEOs of some very successful companies who are literally drawing a salary of $1 – or less.Contrary to what you might expect, the bulk of them aren’t working out of their garages trying to jumpstart their entrepreneurial dream. They are high achievers who believe the $1 salary reflects their commitment to creating value for shareholders and would rather see their paydays come along with the skyrocketing share price they believe their efforts will lead to.
This select group of eight chief executives stands in sharp contrast to the bulging envelopes that the 500 highest paid CEOs collect. As Forbesdetailed in its list of the highest compensated American CEOs, the top 500 well-paid captains of industry hauled in a collective $4.5 billion in 2010. Those amounts do include share awards, but also include an average $3.3 million in salary – before bonuses and other compensation from use of private jets to country club dues, that tacks on another $3 million. And both of those figures don’t include stock awards.
Our lowest salaried CEOs may seem hermitical by comparison, but we excluded stock awards and miscellaneous compensation here. Still, our group reflect a bygone era of American industry when outsized paychecks were deemed unseemly and even unfair by CEOs themselves. And you know what? Some of the companies skippered by our “One Buck Chucks” have been some of the best stock market performers of recent years. Proof that when management’s interest are aligned with shareholders, everyone gains.
Perhaps no one on our list (or anywhere) has been better at creating shareholder value than Apple‘s Steve Jobs. Since he rejoined the iconic computer maker in 1997, when Apple bought his NeXT Computer Inc. for its Unix-based operating system (the basis of the Mac’s OS X), Jobs has taken only $1 annually (don’t worry, thanks to Apple and Pixar, which he sold to Disney in 2006, Jobs is worth $8.3 billion.) For that buck, Jobs has generated an 8,333% return for Apple shareholders.
A few CEOs on our list aren’t well known at all. In 2000 I wrote about a quixotic contest held by a small Canadian mining company to identify gold on its Ontario land in return for a $105,000 purse. For the CEO who came up with that contest, Rob McEwen, it was money well-spent: he built Goldcorp into the world’s lowest cost major gold producer with an annualized 40% return for stockholders under his tenure as the company grew from $50 million to $10 billion in market capitalization. After leaving Goldcorp, buying up a majority of exploratory miner US Gold and rewarding himself with a $1 salary, shareholders have enjoyed a 2,000% return. Clearly, he’s invested a few years’ worth of his salary into his personal website.
Two CEOs who last year would have made our elite list of cheap chiefs didn’t make the cut: Citigroup‘s Vikram Pandit slashed his pay to $1 until he led the bank out of the financial crisis and into profitability. In January he got a pay bump up to $1.75 million.
Nvidia‘s founder and CEO Jen-Hsun Huang voluntarily cut his salary to a buck in late 2008 as part of a company-wide cost cutting endeavor. His $600,000 base salary was restored for 2011.
Here is the list of our One Buck Chucks:
Larry Ellison, Oracle
Salary: $1
If you had the list the traits of a CEO taking a $1 paycheck your list would probably include humility, frugality and charity. Ellison, who we atForbes had cited in the past as appearing a little stingy in the giving department, is working on the charity part: he signed the Giving Pledge to give away 95% of his wealth to good causes. The humility and frugality? Still need some work: At various times he has owned the world’s largest yacht, world’s largest house and even the world’s largest subwoofer. He’s close to having the world’s largest fortune too: he is worth $39.5 billion, making him the fifth richest person on the planet.
Steve Jobs, Apple
Salary: $1
Once the master of his own ‘reality distortion field,’ Jobs has toned down his bravado and turned up the performance, turning Apple into the company he always boasted it would be: a world-changing entity that is also a market leader. Apple is second only to ExxonMobil in market cap among US companies. Since returning to the company in 1997, Jobs has taken just a buck salary while giving shareholders an 8,333% return.
Salary: $0
Although heading the company that gives you shoot-em ups like Grand Theft Auto, Max Payne and Duke Nuke’em, Zelnick isn’t the video game nerd you’d expect. Before founding ZelnickMedia in 2001, Zelnick was a veteran of the entertainment business at 20th Century Fox and BMG, having, among other things, shoved Clive Davis out at Arista Records. ZelnickMedia owns a chunk of Take Two shares, so the lack of salary is just about minding the store. In October he replaced ZelnickMedia partner Ben Feder as CEO of TakeTwo. Feder forsaked his $1 salary to travel Asia with his family.
John Mackey, Whole Foods Market
Salary: $1
Founder of the store that brought organic food to the masses, Mackey guided the company once mocked as “whole paycheck” through the recession with flying colors, emphasizing value and unique offerings. Mackey started the grocery store that evolved into Whole Foods in Austin for $45,000 in 1978. Now Whole Foods has over 300 outlets in the US and UK and generates $9 billion in sales in everything from in-store sushi to organic baby food.
Robert McEwen, US Gold
Salary: $0
Perhaps living the claim that some goldbugs make that currencies are just worthless paper, Canadian-born McEwen doesn’t take a dime in salary heading up the prospecting company that hunts for gold in Nevada and Mexico. The company’s stated goal is to be added to the S&P500 index by 2015 – a big dream, but one McEwen’s track record suggests he can achieve. When Forbes first wrote about McEwen in 2000, he was holding a contest for geologists to map the gold deposits at the property of a company he then led. It was the start of turning that company, Goldcorp, from a near-failure to the world’s lowest cost gold producer with a 40% annual return to shareholders under his watch. As the largest shareholder in US Gold since 2005, McEwen has advanced shares over 2,000%.
Richard Fairbank, Capital One
Salary: $0
What’s in his wallet? Not a paycheck from credit card giant Capital One. Still, as founder of Capital One, we assume he has a high limit on his credit cards, helped along by awards totaling $16.25 million in stock and options for performance in leading the company. He also gets company-paid office supplies for his home office, so there’s that too.
Richard Kinder, Kinder Morgan
Salary: $1
Though he makes just a buck, billionaire Kinder hardly needs a raise: he is worth $7.4 billion primarily due to his stake in the natural gas pipeline company he cofounded with friend William Morgan. Kinder reportedly started Kinder Morgan after leaving Enron in 1996, uncomfortable with its asset-light approach. With 37,000 miles of pipeline, Kinder Morgan has lots of assets.
Larry Page, Google
Salary: $1
The Google co-founder accepts only a buck for running the search engine giant, the same salary as Eric Schmidt, whom Page replaced as CEO earlier this year. Previousy Google’s President of Products, Page did get a $1,785 holiday bonus in 2010. Oh, and he is worth $19.8 billion in Google stock and related cash-outs.
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source: forbes.com
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