Recent reports reveal that CEOs of several billion dollar companies have been receiving annual salaries of $1 to $0 for several years. Yet, they remain billionaires, with some taking up top spots in the list of wealthiest men in the globe. But how is this possible?
The salaries of top CEOs have become incomprehensible over the years. In 2018, a New York Times report stated that the CEO of Tesla, Elon Musk, received a hefty pay package of $2.3bn; but Tesla Motors shot down the claim saying its CEO earned $0.
The question then remains: If some CEOs of giant multinational companies are taking only $1 or even less as their payment for years, how do they boast billions in their bank accounts?
Most of the CEOs who earn around $1 annually as their official salary, receive massive bonuses or compensation from the company. In contrast, others say that they forgo any bonus or compensation.
The compensation plan makes the salary payment almost irrelevant; this is because CEOs often receive high bonuses or compensation from the growth of the stock or share prices of the company while their basic payment is recorded as $1. Hence, according to the compensation plan, a CEO will receive payment according to the company's performance and will get a huge windfall when stock prices go up.
The miserly salaries of billionaires -
Co-founders of Google, Larry Page and Sergey Brin
The co-founders and former CEOs of Google Larry Page and Sergey Brin requested their base annual salaries to be $1 in 2004. The CEOs who receive a $1 annual salary earn based on the performance of their company. In 2019, Larry Page and Sergey Brin decided to step down from their roles, saying that the company no longer needs 2 CEOs and a president. They assigned Sundar Pichai as the new CEO of Goggle, who received around $2 million in annual salary in 2020.
Larry Page and Sergey Brin bade farewell to their roles, but as co-founders, they are still shareholders and board members of Goggle.
As of 2021, Larry Page's net worth is around $104 billion making him the 6th richest person globally, and Sergey Brin's net worth is $100, making him the 8th richest person on earth, according to Celebrity Net Worth.
Co-founder and CEO of Facebook, Mark Zuckerberg
The Chief Executive Officer, chair and co-founder of Facebook, Mark Zuckerberg, joined the $1 annual salary club in 2013, reports the Washington Post. He is also known for not receiving any additional bonus but has large control over Facebook's stock. In a Q&A with the Insider in 2015, Zuckerberg said, "I have made enough money. And at this point, I am just focused on making sure I do the most possible good with what I have."
CEO and Co-founder of Tesla, Elon Musk
CEO and the Co-founder of Tesla, an American electric vehicle and clean energy company based in Palo Alto, California, Elon Musk does not get a salary but earns a massive chunk based on the company's impressive performance. The New Times indicates Musk filled his pocket with $2.3 billion in compensation from Telsa, while the company claims to pay $0 as his wage. Along with Tesla, Elon Musk is also the CEO and founder of Neuralink, founder of SpaceX and also The Boring Company. Elon Musk's net worth is approximately $151 billion, making him the 2nd richest person on earth and a widely popular name.
CEO of Twitter Jack Dorsey
In 2019, Twitter's filing disclosed that the Twitter CEO received an annual salary of only $1.40. Jack Dorsey had co-founded Twitter on 21 March, 2006 and became the CEO in 2008. He is also the co-founder of The Square. From the year 2016-2018, he even denied accepting any bonus or compensation except his $1.40 salary.
The Insider reports that the $1.40 figure may be symbolic too, given Twitter's origin as a service for posting updates of 140 characters, now extended to 280 characters. According to Forbes, the 44-year-old CEO Jack Dorsey's net worth is approximately $12.9 billion.
Founder and 'Chief Yahoo', David Filo
The founder and 'Chief Yahoo' of Yahoo! David Filo has earned only a $1 annual salary. He even refused to take any compensations yet has a net worth of approximately $3.5 billion as of 2021.
Co-founder and CEO of Snap Inc. Evan Spiegel
The 31-year-old billionaire, Evan Thomas Spiegel, is the co-founder and CEO of Snap Inc. As Snapchat went public in 2017, the CEO lowered his salary from $500,000 to only $1. Yet, his net worth is approximately $11.9bn as of 2021. Even in 2019, his net worth was estimated to be over $3 billion.