Vishal Jariwala
I help Insurances leverage Digital Transformation | Liferay | Adobe Commerce | Strategic Sales Approach | Growth Mindset | Sales Coach
Published Sep 13, 2021
While many CEOs are criticized for taking excessive pays, other are completely different. Some tax-smart billionaires themselves take a $1 salary.
Some tax-smart billionaires who take $1 salary are:
The $1 salary us an alternative compensation which is much more beneficial than the regular salary. The CEOs take a $1 salary because they can afford to.
Taxes are one of the main reasons.
CEOs take a lower salary to avoid paying high income tax.
Instead, they take stock/equity of the company as compensation, as tax on Capital Gain is much less.
Difference Between a Normal CEOs & $1/yr CEOs
It helps to gain Investor Confidence. As $1/yr CEO receives his/her compensation in the form of stocks, his/her earnings are directly tied to the performance of the company.
Normal CEO is getting a fixed salary no matter how the company performs. Thus, investors would be more likely to invest in Company 2 as its CEO is more motivated to perform well.
Why even take $1?
For legal reasons, executives have to take some amount as fixed compensation, so as to distinguish them from a volunteer. Thus, they end up taking a small amount $1.
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