One-dollar salary

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Several executives in large businesses receive a salary of one dollar. In place of a salary, the executives receive stock options. This approach reduces personal tax liability because, under current U.S. tax law, salary income is taxed at a significantly higher rate (currently up to 35%) than the capital gains tax (currently a maximum of 15%) applied to profits arising from the sale of stock grants. Obtaining remuneration through stock instead of salary is a common extrinsic rewarding technique which ties management performance to financial benefits. Furthermore, it acts as a tax minimization strategy.

Examples of Executives receiving a one-dollar salary: