Things like earnings and compensation tend to work a little differently once you reach a certain economic tier. Case in point, several well-known billionaires have surprisingly low salaries.
There is a lot more to compensation than just annual salary. There are other factors to consider, like benefits and vacation time. Some professionals also have another aspect of compensation to factor in – shares of the company. Several of the most well-known and successful CEOs established compensation deals that showed they were deeply invested in their company’s future. These arrangements, as well as some refreshingly sensible views about wealth, can mean that some billionaires technically earn pretty low salaries. Here are a few examples:
1. Elon Musk
Tesla announced a new compensation arrangement for Elon Musk earlier this year. His pay will be based upon the company’s performance. Currently, Tesla’s market cap is about $59.4 billion. They have established market valuation goals – the highest of which is an ambitious $650 billion market valuation – and Tesla has also set goals related to revenue and adjusted profit targets. If the company hits certain marks, Musk will receive additional shares of the company. He had a similar compensation plan with Tesla in 2012, when his pay was also linked to the company’s market value and profits.
Tesla does pay Musk around $37,000 annually – approximately minimum wage in California – in order to comply with state laws. Musk’s wealth comes from his stake in the company, and his current net worth is estimated at $20.1 billion.
[click_to_tweet tweet=”Tesla does pay Musk around $37,000 annually – approximately minimum wage in California – in order to comply with state laws. Musk’s wealth comes from his stake in the company, and his current net worth is estimated at $20.1 billion.” quote=”Tesla does pay Musk around $37,000 annually – approximately minimum wage in California – in order to comply with state laws. Musk’s wealth comes from his stake in the company, and his current net worth is estimated at $20.1 billion.”]
2. Larry Page
Larry Page, CEO of Alphabet, Inc., Google’s parent company, and co-founder of Google, reportedly earns a salary of just $1 a year. (Actually, quite a few billionaires technically make just a dollar a year. It’s a move that shows shareholders you mean business. Plus, stock growth and capital gain are taxed much more favorably.)
Page has been making just $1 a year since Google went public. That hasn’t stopped him from accruing a net worth of around $44 billion as of 2017. Instead, Page holds a large equity stake in the company. This demonstrates that he is invested, quite literally, in the company’s success.
3. Warren Buffett
Warren Buffett, Chairman and CEO of Berkshire Hathaway earns just $100,000 annually. That’s not even twice as much as the average earning of his employees, $53,510 in 2017. Buffett does not receive any other compensation or bonus.
This arrangement is well-aligned with Buffett’s feelings about wealth. He’s expressed strong views about wealth inequality in the U.S., and has even pledged to give away more than 99 percent of his wealth to philanthropy during his life or upon his death through The Giving Pledge. (Buffet owns 283,000 shares of Berkshire Hathaway Class A stock as of March of 2018, and he is one of the wealthiest people in the country.)
“The reaction of my family and me to our extraordinary good fortune is not guilt, but rather gratitude. Were we to use more than 1 percent of my claim checks on ourselves, neither our happiness nor our well-being would be enhanced,” Buffett wrote in his moving pledge. “In contrast, that remaining 99 percent can have a huge effect on the health and welfare of others. That reality sets an obvious course for me and my family: Keep all we can conceivably need and distribute the rest to society, for its needs. My pledge starts us down that course.”
Warren Buffett’s tremendous financial contribution is so significant that it will do nothing less than change the world. Hopefully, his views on wealth and philanthropy will also influence other billionaires to look at their money a little differently.
[click_to_tweet tweet=”Warren Buffett has even pledged to give away more than 99 percent of his wealth to philanthropy during his life or upon his death. This tremendous financial contribution is so significant that it will do nothing less than change the world.” quote=”Warren Buffett has even pledged to give away more than 99 percent of his wealth to philanthropy during his life or upon his death. This tremendous financial contribution is so significant that it will do nothing less than change the world.”]
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