Fallout: The Financial Crisis

Bucks don’t stop at CEOs’ $1 salaries

Jeremy Hobson Dec 3, 2008
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Fallout: The Financial Crisis

Bucks don’t stop at CEOs’ $1 salaries

Jeremy Hobson Dec 3, 2008
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TEXT OF STORY

KAI RYSSDAL: As Ford, General Motors and Chrysler go hat in hand to Congress asking for help, their CEOs now say they’ll take just a dollar a year in salary if that’ll make things better. But Marketplace’s Jeremy Hobson reports the bucks don’t really stop there.


JEREMY HOBSON: There are plenty of CEOs who take home just a dollar a year in salary.
Steve Jobs at Apple, Eric Schmidt at Google, and John Mackey at Whole Foods, to name a few. But it’s not easy to find one who gets no additional compensation.

ALEXANDRA HIGGINS: No, that doesn’t happen.

Alexandra Higgins with the Corporate Library says when you add it all up — the perks, the bonuses, the restricted stocks, the stock options — getting rid of a salary just isn’t all that big a deal.

HIGGINS: The only thing it does is remove a guaranteed payment.

Tom LaWer at the consulting firm Compensia says there are two main reasons CEOs decide to take a dollar a year.
Either they started their company, like Apple’s Steve Jobs, and already own so much of it that growth is far more important than compensation. Or, says LaWer, their company is collapsing — as in the case of the automakers.

LAWER: Obviously, some of it is probably publicity but you have to make a strong statement at the top.

He says the CEOs of GM, Ford and Chrysler may not have the same safety net as other CEOs. Their stock options ain’t what they used to be.

LAWER: So for this next year or two, that dollar a year could be most of their compensation.

I guess it beats unemployment.

In New York, I’m Jeremy Hobson for Marketplace.

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