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The $1 Dozen: These CEOs Practically Work for Free

Sean Williams
March 6, 2012

As fellow Fool Alyce Lomax has opined on countless occasions, CEO pay in this country is out of control. For the most part there tends to be a major disconnect between a company's performance and a CEO's pay, leading many investors to call for "pay-for-performance" packages for many of our nation's largest companies.

Whether you believe it or not, some of these CEOs are actually listening to their shareholders and have proactively reduced their base salaries to next to nothing -- and I mean that literally!

Here are 12 CEOs who in 2011 received either $1 as their base salary or, in some cases, absolutely nothing at all:




Meg Whitman Hewlett-Packard (NYSE: HPQ  ) $1
Vikram Pandit Citigroup (NYSE: C  ) $1
John Mackey Whole Foods Market (Nasdaq: WFM  ) $1
Larry Page Google $1
Larry Ellison Oracle $1
Richard Kinder Kinder Morgan (NYSE: KMI  ) $1
Mark Zuckerberg* Facebook $1*
Rob McEwen US Gold/Minera Andes $0
Matthew Lambiase Chimera Investment $0
Malon Wilkus American Capital Agency $0
Richard Fairbank Capital One Financial $0
Strauss Zelnick Take-Two Interactive $0

Source: Forbes; Huffington Post. Based on 2011 salary (does not include bonuses, options, or other forms of compensation). *Zuckerberg's salary will drop from $500,000 to $1 in 2013.

Don't get me wrong -- these CEOs don't work for free. Many of them are eligible for bonuses, stock options, or a combination of the two, while others have a very large stock holding within their company. Wilkus receives a base salary of almost $1.5 million for his work at parent company American Capital. In the end, though, this meets the common goal of shareholders in that a CEO vested in his company's stock is much more likely to work toward growing the business -- and, subsequently, shareholder equity -- than one receiving a large payday regardless of the performance of the business.

Small pay = big success? Not so fast...
A $1 salary doesn't guarantee success, however. Sometimes a $1 salary is initiated in order to save cash. This is exactly what former Research In Motion (Nasdaq: RIMM  ) co-CEOs Jim Balsillie and Mike Lazaridis did. If you ask any of the BlackBerry-maker's current shareholders, they'll probably tell you the duo was still overpaid, since the company continues to lose smartphone market share hand-over-fist.

Similarly, Citigroup's Vikram Pandit and recently hired Hewlett-Packard CEO Meg Whitman decided it was in their best interest to receive a base salary of $1 in order to cut costs. These two CEOs represent a class of leaders that reactively reduced their salaries. In Citigroup's case, the need to raise huge amounts of capital necessitated cutting costs and restoring a public image tarnished by the foreclosure fallout. For HP, its failed Leo Apotheker experiment and its inability to gain market share in any of its major business segments required cost-cutting measures.

Strength in numbers -- very tiny numbers
Then again, a $1 or no-salary base has proven quite effective for investors, based on the history of most of the aforementioned companies.

Richard Kinder, CEO and founder of Kinder Morgan, owned about 216 million class 'A' shares of his company as of Jan. 31., or about 40% of the outstanding shares in that class. If there's any CEO out there who has a vested interest in the performance of his or her business, it's Richard Kinder. Not only did Mr. Kinder not sell any of his shares since the company went public in 2006, but he also implemented a solid dividend payout of $1.24 per year. This 3.4% yield is padding his pockets and taking shareholders along for the ride. It also doesn't hurt that Kinder Morgan's stock is over 22% over the trailing 52-weeks.

The people's champion
Whole Foods CEO John Mackey has been a shareholders' champion as well, taking only a $1 salary since 2006. That year, in a letter to shareholders, Mackey wrote, "I have reached a place i