One-dollar Salary
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One-dollar Salary

Notable earners of one dollar salaries
Various dollar-a-year men in 1922

|Dollar-a-year man|the 1921 film|The 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 him or her 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.

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. US law forbids the government from accepting the services of unpaid volunteers.[4] Those employed by the government had to be paid a nominal salary, and the salary establishes their legal relationship as employees of the government.[5] During World War I, about 1,000 such people were employed by the United States.[6] 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.[7] 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.[8] Progressive lawyer Max Lowenthal was a dollar-a-year man as legal counsel on various congressional committees who befriended U.S. Senator Harry S. Truman.

World War I

Bernard Baruch was the first businessman employed for a one-dollar salary.[9] 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.[10]

Interwar

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

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[11] as Chairman of the Blazer Committee[12] and a second time during World War II as Chairman of District II Refining for President Roosevelt's Petroleum Administration of War.[13][14] During World War II, socialite Doris Duke worked in a canteen for U.S. sailors in Egypt at such a salary.[15]

In Canada during World War II, C. D. Howe, Canada's "Minister of Everything", created a rearmament program using "dollar-a-year men".[16] 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.[17] Others include E. P. Taylor and Austin Cotterell Taylor.[18]

Recent examples

Some recent one-dollar salary earners worked in government as well, most notably former California Governor Arnold Schwarzenegger,[19] former Massachusetts Governor Mitt Romney,[20] and former New York City Mayor Michael Bloomberg.

After promising to take only a dollar a year in November 2016, US 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.[21][22] This was due to the fact that he had initially said he wanted to only accept a $1 salary,[23] but was informed that it was not legally possible to forgo the majority of the full salary.[24][25]

In 2015, then 15-year-old Corbin Duncan petitioned the Australian Prime Minister to take up a $1 salary.[26] The petition was unsuccessful but gained international media coverage.[27]

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.[28]

In some cases, in lieu of a salary, the executives receive stock options.[29][30] 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.[31]

Executives argue that remuneration through stock instead of salary ties management performance to their financial benefits.[29] 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.[32]

Notable one-dollar salary earners

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

References

  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 2013.
  2. ^ "10 High-Powered Executives with $1 Salaries". 14clicks.com. Archived from the original on January 6, 2013. Retrieved 2013.
  3. ^ "Vanderlip Leaves Biggest Bank and Will Aid McAdoo". The Owosso Argus-Press. September 25, 1917. Retrieved 2013.
  4. ^ "31 U.S. Code § 1342 - Limitation on voluntary services". Legal Information Institute. Archived from the original on March 12, 2014. Retrieved 2014.
  5. ^ "How World War I Transformed Washington". POLITICO Magazine. Archived from the original on March 20, 2018. Retrieved 2018.
  6. ^ "One Dollar a Year Men May Lose Two Months' Pay Because of Tax". Sacramento Union -- California Digital Newspaper Collection. March 14, 1919. Archived from the original on March 20, 2018. Retrieved 2018.
  7. ^ The Independent. Independent Publications, incorporated. 1918. Archived from the original on April 22, 2018.
  8. ^ Josephson, Matthew (1952). Sidney Hillman: Statesman of American Labor. Doubleday. p. 364. Retrieved 2018.
  9. ^ "The Century-Long History of Tapping Wall Street to Run the Government". Smithsonian. Retrieved 2018.
  10. ^ Anne Cipriano Venzon, ed., The United States in the First World War: An Encyclopedia (Routledge, 1999), 203-4 available online Archived February 2, 2017, at the Wayback Machine. Retrieved January 2, 2013
  11. ^ "National Recovery Administration: Code of Fair Competition for the Petroleum Industry". Archived from the original on August 8, 2014.
  12. ^ "National Archives Identifier: 7261744 HMS Entry Number: NC-79 28 Records Relating to the Blazer Committee Hearing, 1933 - 1936". Archived from the original on April 2, 2015.
  13. ^ ""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).[permanent dead link]
  14. ^ The New York Times: "Fuller Explains Refusal of Salary, September 20, 1926 Archived November 3, 2012, at the Wayback Machine. Retrieved July 24, 2010
  15. ^ 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 2013.
  16. ^ Art Bailey. "Clarence Decatur Howe". Canada's Digital Collections. Archived from the original on August 31, 2009.
  17. ^ Mel James. "John Wilson McConnell". Canada's Digital Collections. Archived from the original on November 27, 2009.
  18. ^ "The History of Metropolitan Vancouver - 1965 Chronology". vancouverhistory.ca. Archived from the original on January 3, 2017.
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  24. ^ Nguyen, Tina (March 13, 2017). "Is Donald Trump Actually Donating His Presidential Salary?". Vanity Fair. Archived from the original on June 26, 2017.
  25. ^ "Trump-O-Meter: Take no salary". PolitiFact. Retrieved 2018.
  26. ^ "Brisbane teenager calls on Malcolm Turnbull to take $1 salary". ABC News. September 26, 2015. Archived from the original on September 10, 2016. Retrieved 2018.
  27. ^ 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 2018.
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  30. ^ Mayerowitz, Scott (December 3, 2008). "The Other Side of the $1 Salary". ABC News. Archived from the original on September 7, 2009. Retrieved 2009.
  31. ^ 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.
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  50. ^ N. R. Narayana Murthy
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Further reading


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