How do you grow a massive company? Get the executives to think innovatively.
How do you get corporate executives to think innovatively? Treat them like entrepreneurs.
How do you treat executives like entrepreneurs? Tie their compensation to performance. Drop their salary to $1 and compensate them with stock options and performance-based bonuses.
For proof that this works, here’s a list of 10 high-powered executives with $1 salaries and the cutting-edge companies they’re working for.
List of One Dollar CEOs and Co-Founders
1. Lee Iacocca, Former CEO of Chrysler, $1 Salary
Back in 1978, Lee Iacocca pioneered the one-dollar salary. Iacocca had just been fired as president of Ford because his personality clashed with Henry Ford II. At the age of 54 and without a job, Chrysler recruited him with a starting salary of $1.
2. Steve Jobs, CEO of Apple, $1 Salary
Steve Jobs has taken a $1 salary since he rejoined Apple in 1997. But don’t feel bad. He’s accumulated hundreds of millions of dollars-worth of company stock and Apple gifted him a $90 million personal jet in 2000. Plus, when Jobs uses the jet for business, Apple compensates him (to the tune of $776,000 in 2007).
3. Larry Page, CEO of Google, $1 Salary
As of April 4th, 2011, Page is the new CEO of Google (following Eric Schmidt who also took a $1 salary). Page, Schmidt, and Brin (next on the list) first requested a $1 salary in 2004 just before Google’s Initial Public Offering (IPO). But Google didn’t grant them their wish until 2007.
4. Sergey Brin, Co-Founder of Google, $1 Salary
Like Page, Sergey Brin only makes $1 per year to hold his position in charge of special projects at Google. Prior to the new salary request, both Brin and Page were making a modest $150,000 per year.
5. Jerry Yang, Former CEO of Yahoo!, $1 Salary
Jerry Yang co-founded Yahoo! in 1995 with David Filo. He held the CEO position for 18 months. However, Yang had a salary of one dollar for years before he took the position.
6. Jeff Katzenberg, CEO of DreamWorks, $1 Salary
At DreamWorks Animation, Jeff Katzenberg has reportedly received a $1 salary since co-founding the company with Steven Spielberg and David Geffen in 1994. But as a co-founder, he owns millions of shares of a billion dollar company.
7. Larry Ellison, CEO of Oracle, $1 Salary
Larry Ellison, along with Ed Oates and Bob Miner, co-founded Oracle Corporation in 1977. Now it’s worth $73.5 billion and Ellison has elected to receive a $1 base salary starting last year. That’s down from $1 million the previous year. But as the world’s third wealthiest person, I think he’ll manage.
8. John Chambers, CEO of Cisco, $1 Salary
Since he assumed the position of CEO in 1995, Cisco went from a $1 billion company to its current value at $40 billion. In 2001, Chambers asked his board to lower his salary to $1. As a company, Cisco decided to re-up Chambers’ salary to $350,000 in 2004.
9. Vikram Pandit, CEO of Citigroup, $1 Salary
In 2008, Citigroup was seeking a federal bailout but CEO, Vikram Pandit still received over $38 million in total executive compensation. Then in 2009, Citigroup received federal assistance from Congress and Pandit told his board, “my salary should be $1 per year with no bonus until we return to profitability.” So he took his $1 salary until Citigroup returned to profitability in 2010, at which point it jumped back to $1.75 million.
10. John Mackey, CEO of Whole Foods Market, $1 Salary
John Mackey co-founded Whole Foods in 1980. In 2006, Mackey wrote a letter to his employees announcing that he reduced his salary to $1 a year. In the letter he wrote:
“I have reached a place in my life where I no longer want to work for money, but simply for the joy of the work itself and to better answer the call to service that I feel so clearly in my own heart.”
Yes, most of these executives are compensated just as much, if not more than the average CEOs. But that’s because they’re growing better than average companies.
No matter how you look at it, the $1 salary encourages entrepreneurial decision making and I’m a fan of that.
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Post image by: nimboo