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$1 buys CEOs a lot of good will

Eschewing mammoth salaries doesn't mean that's all they're paid

In corporate America, few status symbols rival the one-figure salary.

As companies disclose how much they pay their head honchos -- and inevitably ignite outrage about exorbitant executive salaries -- consider Google Inc.

Every two weeks, the three billionaires who run the Internet search giant get a paycheck for about 4 cents. Before taxes.

Sergey Brin, Larry Page, and Eric Schmidt are part of an exclusive club of top executives who drew $1 annual salaries last year. No bonuses. No stock-option grants. Other members include Richard Kinder, cofounder of energy company Kinder Morgan Inc., Apple Computer Inc. chief executive Steve Jobs, DreamWorks Animation SKG Inc. chief Jeffrey Katzenberg and his company's chairman, Roger Enrico.

Of course, these executives have something else in common: They're already filthy rich, thanks to ownership stakes in the companies they helped build.

In World War II, when the dollar-a-year salary gained currency, it communicated the importance of personal sacrifice in wartime. Now, the dollar sends a different message: The buck stops here. Because many of today's corporate leaders own so much of the companies they run, their personal fortunes are tied to corporate success. They succeed when the company does.

``It's a gesture to the shareholders saying `I've got more money than I could spend in 52 lifetimes -- just pay me a dollar and I'm happy enough,' " said Graef Crystal, an executive compensation specialist.

Google founders Brin and Page have cashed in $2.2 billion and $1.8 billion, respectively, in company stock since taking the company public in 2004, and chief executive Schmidt has pulled in $645 million, according to Thomson Financial. The founders each hold nearly $13 billion in stock, and Schmidt's shares are worth about $5 billion.

A. Jerrold Perenchio, chairman and chief executive of Univision Communications Inc., passed on the buck. He draws no salary at all, but his ownership stake in the Los Angeles-based Spanish-language media company is worth nearly $1.3 billion.

``They're not working for free," said Tom LaWer, a Silicon Valley executive compensation lawyer. ``Saying it's a dollar salary doesn't really get to the fact that they're all fabulously wealthy."

In 2005, the median chief executive salary of big public companies surveyed by Mercer Human Resource Consulting was $975,000. With an additional $1.4 million in bonuses, the median CEO compensation (not including grants of restricted stock or stock options) rose 7.1 percent over the previous year -- double the raise of the average employee.

New York Mayor Michael R. Bloomberg, a former media magnate, also works for a dollar but doesn't cash the paychecks. One hangs in his office on the first floor of City Hall. He has joked that at the end of his eight years in office, he hopes to have the city budget off by $8 -- a dollar for each check he didn't cash.

The practice can be worth a fortune in good publicity.

``Once one person did it, it just sounded good," LaWer, said.

In the corporate world, the single-digit salary has largely been adopted by CEOs trying to restore shareholder confidence in their struggling companies, such as Lee Iacocca at Chrysler in the late 1970s.

When Silicon Valley companies withered during the dot-com bust, the practice flourished as executives tried to send shareholders a we're-in-it-together message. The gesture was often undercut by corporate boards granting those CEOs hefty awards of stock options that could be sold with only a mild stock-market recovery. Buck-a-year chiefs who reaped stock-option windfalls include John Chambers of Cisco Systems Inc. and Tom Siebel of Siebel Systems Inc.

At the other company he runs, Pixar, Jobs earns a dollar a week: $52 for each of the last two years. As of Feb. 15, he owned 49.8 percent of the company, which Walt Disney Co. is buying for $7.4 billion, meaning Jobs' stake will be $3.7 billion.

Jobs has taken a $1 salary at Apple since 1998, not long after he rejoined the company he co-founded, earning him a place in the Guinness Book of World Records for lowest paid chief executive.

But Apple paid him in plenty of other ways, including multimillion-dollar stock grants and bonuses, as well as a corporate jet in 1999 that cost the company $90 million.

The dollar-a-year practice can cause headaches for corporate payroll departments.

How, for instance, do human resources departments pay a $1 salary? Do they issue a relevant W-2 tax form for $1? And what do the executives do with it?

A few employment specialists suspected some companies simply wouldn't bother. Said San Jose executive compensation consultant Tim Sparks: ``It's purely symbolic."

Symbolic or not, Kinder gets the cash. The company cuts Kinder a single check for 93 cents, after taxes, at the beginning of each year.

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