Meg Whitman Joins the $1 CEO Club

by Douglas McIntyre Sep 30th 2011 7:40AM
Updated Sep 30th 2011 7:43AM

Meg Whitman, Hewlett-Packard's (HPQ) new CEO, will be paid $1 a year and receive a nonqualified option to purchase 1,900,000 shares of HP common stock. Her predecessor, Léo Apotheker, will walk away with get $7.2 million severance, a $2.4 million bonus and various stock options, which could take that figure much higher. Whitman joins a list of public company CEOs who have worked for $1, plus options or other incentives. Those pay packages often accompany solid results.

The most famous $1 CEO was Steve Jobs, who recently stepped down from that post as he continues to struggle with his health. Jobs also owns about 5.5 million Apple shares, so his incentive was fairly clear. He has made the most of that by leading Apple to spectacular success.

Car company CEO Lee Iacocca said he would work for $1 in 1978 when the company he helmed, Chrysler, had to borrow money from the U.S. The tiny cash compensation did not keep him from turning around the manufacturer, which is matched only by Ford's (F) turnaround three years ago.

Oddly enough, Ford CEO Alan Mulally said he would work for $1 in 2008 if his company had to take any government bailout money. It did not, but the gesture got Ford some goodwill, and Mulally saved the number one U.S. car company from the Chapter 11 fate that General Motors (GM) and Chrysler could not avoid.

Another successful CEO who worked for $1 was Eric Schmidt of Google (GOOG), who, along with founders Sergey Brin and Larry Page, took the tiny pack packages in 2005. Brin and Page are billionaires because of Google's success, and Schmidt, who was recently replaced by Page as CEO, is fabulously wealthy.

Meg Whitman certainly won't be pinching pennies with the $1 salary. She made hundreds of millions of dollars when she was CEO of eBay (EBAY). But she spent tens of millions of dollars of that on her failed campaign to become California's governor. If she does a good job at HP, she may earn enough to replace all of that.

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25 Comments

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RICHARD BONNET

CaRLEY fIORINA RUIND LUCENT AND HP. NOW MEG WHITMANN
WILL RUIN HP

September 30 2011 at 3:28 PM Report abuse rate up rate down Reply
bps163

Putting Meg in charge of HP is like placing a student driver behind the wheel of a Tractor,Trailer. There's going to be a wreck and a bad one. She has NO, I repeat NO back ground in this area of HP.

September 30 2011 at 2:23 PM Report abuse rate up rate down Reply
ppand

Base salary is often meaningles to executives, bonuses, stock options and exit provisions are where they make their money. The $1 salary looks good to superficial observers while it is the perfect way to evade payroll taxes. Salary aside, Incentive based pay can be a good thing or bad, depending on what the incentives are. Many are tied to bottom line performance that serves the interest of the shareholders. Anybody want to guess who the biggest shareholders are? Incentives are rarely if ever tied to quality of service to workers, or God forbid, actual customers.

September 30 2011 at 1:56 PM Report abuse rate up rate down Reply
scottsdale4957

Love it the way you losers resent people who have more than you do. The wealthy are the ones who work hard,get educated, take risks and have some luck. Children are the biggest socialists on the planet. Totally dependent on mommy and daddy for everything. Kind of like Obama's vision of government. You have the best shot of becoming wealthy in the US. Even if you're "poor" by US standards, you're still better off than the poor outside the US. The wealthy pay plenty of taxes while some people pay zero. Is that fair? The wealthy do not owe you envious people anything.

September 30 2011 at 1:53 PM Report abuse -1 rate up rate down Reply
1 reply to scottsdale4957's comment
ppand

Since you seem to know everything about everybody, could you send me the names of some of those folks who never pay ANY TAXES OF ANY KIND? I'd like to ask them how they manage that.

September 30 2011 at 2:15 PM Report abuse +3 rate up rate down Reply
ahnree

salary means nothing to a ceo, its the bonus that counts. $20 million coming soon in March.

September 30 2011 at 12:25 PM Report abuse +2 rate up rate down Reply
visconti24

She is not worth that.

September 30 2011 at 11:47 AM Report abuse rate up rate down Reply
kaylee50

Just another CEO that won't have to pay taxes on the regular salary like the rest of us folk. When CEO take a $1 salary they are not paying into Social Security, Medicare etc. This has to stop . I wish I had stock options too!

September 30 2011 at 11:01 AM Report abuse rate up rate down Reply
1 reply to kaylee50's comment
Sam Sharma

If you feel that way, please become her and do the same. It takes lot of courage and commitment to be in that state of affairs and be motivated, regardless how much money they have in their bank. People who are paid well do not work, a good example is out going CEO. He did a very poor job and still getting millions and the stock holders are going to hell, with their hard earned money. He should be ashamed of himself.

September 30 2011 at 11:18 AM Report abuse rate up rate down Reply
zeroagenow

she can choke on it too

September 30 2011 at 10:47 AM Report abuse +1 rate up rate down Reply
Frank

I don't think she will be hurting much as she spent over $100,000,000 of her own money on her failed attempt for the governors seat. Just the perks these people receive in a year can be more than the average person makes in a lifetime.

September 30 2011 at 10:45 AM Report abuse rate up rate down Reply
1 reply to Frank's comment
Sam Sharma

She failed in the election as State of california people do not believe in progress and love only sunshine and Hollywood. That is why so much of unemployment and million other issues to deal with all the time, not to mention Business leaving for overseas and to other states.

September 30 2011 at 11:22 AM Report abuse -3 rate up rate down Reply
1 reply to Sam Sharma's comment
visconti24

You miss the point. We do believe in progress in California that is why she lost the election. She is a retrograde, backward thinking executive who acts like her colleagues in the Republican party who spouse ideologies that have been dead since 1929. Her millions could not resurrect the dead. Her Herbert Hoover philosophy of rewarding billionaires and corporations while skinning majority of the people will not work. Being a goddess of E-Bay is not the same as governing an State that really is a nation. Californians saw through her snake oil saleslady persona and rejected her. And this silly story that companies are leaving California in droves for better pastures is an old chestnut used since 1849. Totally discredited. This is the 5th or 8th largest economy in the world, not some piddly third world state.

September 30 2011 at 11:58 AM Report abuse rate up rate down
Josh Temple

Just another way to get out of paying taxes for the infrastructure she utilizes for work, the educational systems that are needed to produce her workforce, and the emergency services she relies on so she can sleep soundly at night without bands of brigands dragging her from her bed... I suppose theft and usery only matters when you are poor.

September 30 2011 at 10:19 AM Report abuse rate up rate down Reply
2 replies to Josh Temple's comment
gpfs

Let's see if they take the pay they can get they are greedy, if they work for nothing they are cheating the tax man? Which is it???

September 30 2011 at 10:43 AM Report abuse +1 rate up rate down Reply
2 replies to gpfs's comment
Josh Temple

Don't put words in my mouth, I don't care if they take a decent paycheck if they earn it. How many of them really earn it though? They just drive up the stock values by shipping jobs overseas. I know it's easier to follow the pied piper into oblivion but you have to try try try to resist. It's a lot to expect I know... since you can't seem to avoid lumping everyone into one group as it is.

September 30 2011 at 11:13 AM Report abuse +1 rate up rate down
Sam Sharma

See if you you qualify for that job and do the same and make millions. Please apply soon.

September 30 2011 at 11:24 AM Report abuse -2 rate up rate down
wpsoc344

well if Obama would drop the corporate tax rate from 35% then they wouldn't have to ship jobs overseas! Why the hell would they want to pay 35% in the US when they can pay half that in some country in Europe?!?!?!

September 30 2011 at 12:02 PM Report abuse rate up rate down Reply
2 replies to wpsoc344's comment
MeritaBread

Pretty soon, they can pack up everything and move to Europe or Asia as the US becomes a third-world economy. The Indians and the Chinese WILL learn from US labor history, however, so then they will be right back here.

September 30 2011 at 1:36 PM Report abuse rate up rate down
visconti24

That is the nominal tax rate. No corporation pays that. The loopholes are big enough to fly an Airbus through them. Tax credits of more than 50 varieties, incentives, depletion allowances, evening out of profit and losses, reinvestment allowances, expense credits and downright cheating etc etc etc. make the famous 35% totally meaningless. NO American corporation in its right mind would decamp and move to Europe where the real tax rate applied is far greater than 35%. Believe me, I deal with that.

September 30 2011 at 1:56 PM Report abuse rate up rate down