Source: Economic Policy Institute
According to Forbes
there are now at least six executives who take in $1 as their salary. Before you can say you finally earn more than the boss, five
out of these six are billionaires. These executives are
- Oracle‘s Larry Ellison
- Google’s Larry Page and co-founder Sergey Brin
- Hewlett Packard’s Meg Whitman
- Kinder Morgan’s Richard Kinder
- The other executive is Whole Foods’ John Mackey (only worth a couple of hundred million).
The late Steve Jobs was also a member of the $1 club.
- Mark Zuckerberg is following this Silicon Valley trend, effective 1st January 2013 Mark Zuckerberg will be earning $1 per year.
- Elon Musk of Tesla is a $1 CEO but in annual disclosures he is entitled to $33,280 the minimum wage requirement under California law. Talk about red tape, don’t worry he is billionaire too.
- Investors have got to pay more for Buffet services $100,000 but this is an absolute bargain given average hedge fund managers typically charge 20% of the profits.
Of course the $1 salary is not so simple CEO’s like Larry Ellison receive other benefits like stock options, security services and perks like use of aircraft. Now I don’t mind earning a $1! The point of all this is while these CEO’s are wealthy having all their personal wealth tied directly to the stock provides direct alignment of interests with shareholders. Investing with CEO’s that benefit only when shareholders do sounds like a good starting point for investments.
We like to invest alongside founder led firms.
The companies these founders create are their life’s work, they are not like
professional managers jumping from job to job every five years. Founder led firms tend to be
more focused on the longer term and are more willing to invest in future growth opportunities at
the expense of short term margins. They also tend to do more focused acquisitions,
no empire builders here. This tends to add up to better long term share
performance.
The final question is how do they get paid? A dollar monthly is only 8.3 cents a month! Luckily they have already earned enough money. It typically pays to invest alongside these people, they are working because they enjoy it and they want to see their businesses succeed. The bottom line is it pays to invest alongside management with material shareholdings, its the best kind of shareholder alignment.
Jason
The material in this article is for informational purposes
only and in no way constitutes a solicitation of business or investment advice.
The material has been prepared without regard to any client's or other person's
investment objectives. Before making an investment decision you should consider
the assistance of a financial adviser and whether any investment or service is
appropriate in light of your particular investment needs
