One-dollar salary

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Notable earners of one dollar salaries
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Herbert Hoover
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Arnold Schwarzenegger
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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]

Contents

Dollar-a-year men

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

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

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

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

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.

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. [22] [23] [24] [25] Since then, President Trump donated his salary to various Federal Departments, fulfilling his campaign promise to do so. [26]

In 2015, then 15-year-old Corbin Duncan petitioned the Australian Prime Minister, Malcolm Turnbull, to take up a $1 salary. [27] The petition was unsuccessful but gained international media coverage. [28]

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. [29]

In some cases, in lieu of a salary, the executives receive stock options. [30] [31] 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. [32]

Executives argue that remuneration through stock instead of salary ties management performance to their financial benefits. [30] 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. [33]

Notable one-dollar salary earners

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

See also

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References

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