You’ve probably heard it a million times: super successful entrepreneurs do things differently than the rest of us. They think, work, eat, sleep differently. But what we usually don’t hear is that they also get paid differently. That difference may be a key to understanding what is really important when building a business.
Most everyone uses their hourly or annual salary to determine how valuable they are to the marketplace. The more the salary, the more successful you are, right? This is another place where the masses get it wrong. Some uber successful entrepreneurs don’t really care too much about how much “take home pay” they bring in monthly.
In this article, you will see how 9 super successful CEOs make low annual salaries but still grow their wealth through ownership and performance-based compensation. Hopefully, this will give you some ideas on how to structure your own compensation.
1. Mark Zuckerberg, Facebook
(Networth-$53.7 billion, salary $1/year)
He mentioned that at this point in his life, he is solely focused on doing as much good as he can with what he has. He figured that the best way he could help is by enabling people to share and connect via Facebook. He is also focusing on health and education philanthropy work besides Facebook.
But like many of the CEOs on the list, salary really doesn’t mean much. The year that Facebook went public (2012) Zucks collected $2.3 billion from stock options. The same year he received $266,101 in bonuses plus an addition $1.22 million in “other compensation.
2. Larry Page, Google
(Networth-$39 billion, salary $1/year)
Co-founder of Google, Larry Page has been earning a meager salary of only $1 annually. He has been earning the same salary since the company went public in 2004. Little is known about how Page and his Co-Founder Segey Brin get compensated. However, according to a SEC filling in 2015, the two founders sold about $4.4 billion in company shares.
3. Sergey Brin, Google
(Networth $38.2 billion, salary $1/year)
Sergey Brin who is a co-founder of Google and a long-time partner of Larry Page is also part of the $1 salary club. Despite the fact that Google’s compensation committee persistently offers him market-competitive salaries each and every year, he continues to turn down such offers.
Brin and Page collectively own approximately 40 million Class C shares and another 40.6 million Class B shares or their company. This special Class of shares allow them to sell Class A and C shares and still retain control of their company.
4. Jack Dorsey, Twitter
(Networth- $1.1 billion, Salary $0/year)
Chief Executive Officer of Twitter, Jack Dorsey receives absolutely no compensation for his role. At his own request, he decided to forgo any form of compensation for his role as Interim Chief Executive Officer until the Compensation Committee agreed on a compensation package for him.
Don’t feel too bad for Dorsey for working for free. In 2009, he founded Square, Inc which eventually IPO’d in 2015. Dorsey is still the CEO of Square and is also a Board Member of The Walt Disney Company.
5. John Mackey, Whole Foods
(Networth-$100 million, Salary $1/year)
Whole Foods’ co-Chief Executive Officer John Mackey, reduced his salary to a meager $1. Afterwards, he opted to forego any stock option awards, bonuses and any other form of compensation.
In a letter to his staff in 2007, Mackey wrote:
“Beginning on January 1, 2007, my salary will be reduced to $1, and I will no longer take any other cash compensation…. The intention of the board of directors is for Whole Foods Market to donate all of the future stock options I would be eligible to receive to our two company foundations.”
So does he just make up the difference in Whole Foods discounts? Not exactly. He still owns a large amount of Whole Foods stock. In 2012, he sold 24,000 shares worth approximately $500,000.
6. Elon Musk, Tesla Motors
(Networth-$12.5 billion, Salary $1/year)
Musk was entitled to a $37,584 salary last year. But he did not take it. The CEO of Tesla motors is said to have never accepted his salary in the past and continues to do so presently. Similarly, he has totally declined receiving stock awards and bonuses that he rightfully deserves.
But don’t go starting a “Raise Money for Elon” GoFundMe page just yet. The Paypal Co-Founder has a compensation structure (in the form of options) that depends on hitting milestones. One milestone is to increase Tesla‘s value by 28 percent to $43.2 billion. Musk would be entitled to a $1.6 billion payday by 2022 if the goals are achieved.
7. Tony Hsieh, Zappos
(Networth $840 million; Salary $36,000/year)
After Tony Hsieh and other co-founders of LinkExchange sold it to Microsoft, he started investing his money in other companies with immediate effect. Zappos was one such company. Tony eventually became its CEO earning a low salary of $36,000. This meager salary remained completely unchanged even after Amazon acquired the company.
In 2010, Hsieh took $350 million of his own money and started Downtown Project (DTP). DTP is a project aimed at rebuilding Las Vegas neighborhoods. In fall 2014, Hsieh decided to move out of his luxury condo and into a DTP-owned trailer park a short walk from Zappos headquarters.
8. Jeff Bezos, Amazon
(Networth-$66.7 billion, Salary $80,000/year)
Amazon.com CEO and Founder requested not to receive extra compensation in the year 2011 because of his substantial ownership in the profitable company. His salary was worth $81,800 but due the contributions of other compensations it adds up to slightly below $1.7 million. Unbelievably, his basic salary has not increased ever since the year 1998 (a year after Amazon went public). Pretty low for the third richest person in the world.
Recently, Bezos sold off another 1 million shares of company stock, according to a filing with the Securities and Exchange Commission. The most recent sale is the largest by far totaling $756.74 million. The massive bonus was well deserved as Amazon shares have been up about 10% this year.
9. Jeremy Stoppleman, CEO Yelp
(Networth est. $200-300 million, Salary $1/year)
The Chief Executive Officer of Yelp Jeremy Stoppleman sequentially decreased his salary from $300,000 in the year 2012 to $37,501 the following year before deciding to settle for $1 in the year 2014.
However, in 2015 Stoppleman received $919,315 in compensation including $852,112 in stock options according to salary.com.