Bucks don't stop at CEOs' $1 salaries
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 the bucks don't really stop there. Jeremy Hobson reports.
(left to right) General Motors CEO Richard Wagoner, Chrysler CEO Robert Nardelli, Ford CEO Alan Mulally listen as UAW President Ron Gettelfinger testifies before the House Financial Services Committee on Nov. 19, 2008. (Chip Somodevilla/Getty Images)
More on The Economy, Auto Industry, America's Financial Crisis
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.
Comments
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From Hammondsport, NY, 12/04/2008
NO to Auto makers Bailout -
Yes they left the private jets home and gave up salaries - but they still have the jets and their perks and big bank accounts, valued at figures the ordinary citizen can't even fathom, while holding out their little "tin cups". ABSOLUTELY DISGUSTING - The CEO's and other management should take out personal loans and BAIL THEMSELVES OUT. They are ulimately responsible for their businesses and if they can't fix their mess they should be out of a job.
No one will bail out those who have lost most of their retirement savings in this economic turn down? We wil have to borrow or work longer to bail ourselves out.
From Dallas, TX, 12/03/2008
They are going to make a killing on options. They will grant themselves options at a fraction of today's very low stock prices. When stocks go up any higher, in a year or two, they will make a fortune. Law makers have to ask them to ensure they hold any options granted now for a long term and really align their interests with other stakeholders
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