# Working for $1 per year **URL:** \ **Category:** Factual Questions\ **Created:** [November 10, 2006, 10:40pm UTC](https://boards.straightdope.com/t/working-for-1-per-year/379943 "2006-11-10T22:40:37Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![brad\_d](https://avatars.discourse-cdn.com/v4/letter/b/50afbb/32.png) [@brad\_d](https://boards.straightdope.com/u/brad_d)\ **Post date:** [November 10, 2006, 10:40pm UTC](https://boards.straightdope.com/t/working-for-1-per-year/379943/1 "2006-11-10T22:40:37Z")
It’s not especially uncommon to hear of some wealthy individual accepting an annual salary of $1 for a political office or executive-type job: [Steve Jobs at Apple](http://en.wikipedia.org/wiki/Steve_jobs#Return_to_Apple) and [Micheal Bloomberg as the Mayor of New York](http://en.wikipedia.org/wiki/Michael_Bloomberg#2001_election) are the first examples I could think of. I don’t hear of people doing the equivalent thing for $0, which leads me to suspect that there are some important legal or tax concerns that make that dollar’s changing hands crucial. I couldn’t put a finger on what, though. Is it as simple as some agency’s definition of “employment” that _requires_ nonzero compensation? (While allowing vanishingly small compensation…) I tried searching, but came up with nothing. Apologies if this has been discussed before. ---
**Author:** ![FormerMarineGuy](https://avatars.discourse-cdn.com/v4/letter/f/65b543/32.png) [@FormerMarineGuy](https://boards.straightdope.com/u/FormerMarineGuy)\ **Post date:** [November 10, 2006, 10:45pm UTC](https://boards.straightdope.com/t/working-for-1-per-year/379943/2 "2006-11-10T22:45:20Z")
Here is [a little something for you](http://www.googlecrumbs.com/2006/01/25/google-founders-agree-for-another-1-per-year-salary/), which goes on to talk about stock options. > [@](#): > > $1 a year salary doesnt seem like too much. But when you have a tanker truck filled with stock options, that $1 equals close to $160 million in the past month. And[another](http://www.weboptimiser.com/search_engine_marketing_news/13025063.html). > [@](#): > > The three men requested that their pay be reduced to $1 in the second quarter of 2004, around the time they announced intentions to float the search company. And [this might answer your question.](http://www.searchmarketingstandard.com/blog/2006/06/1-per-year-is-hot-new-online-executive.html). > [@](#): > > What’s up with this? Just another way for search companies to incentize their execs by making what they take home to their bank accounts dependent upon the performance of the corporation as a whole. Smart move … as long as they continue to make money that is. Don’t know that Semel will be too happy a camper if Yahoo! were to have an off year (not to mention Sergey, Larry and Eric at Google who also earn a buck a year). Anyone think Microsoft may hop on this bandwagon? ---
**Author:** ![ultrafilter](https://avatars.discourse-cdn.com/v4/letter/u/3d9bf3/32.png) [@ultrafilter](https://boards.straightdope.com/u/ultrafilter)\ **Post date:** [November 10, 2006, 10:52pm UTC](https://boards.straightdope.com/t/working-for-1-per-year/379943/3 "2006-11-10T22:52:42Z")
That still doesn’t explain why these guys are drawing a $1 salary rather than none at all. ---
**Author:** ![brad\_d](https://avatars.discourse-cdn.com/v4/letter/b/50afbb/32.png) [@brad\_d](https://boards.straightdope.com/u/brad_d)\ **Post date:** [November 10, 2006, 10:52pm UTC](https://boards.straightdope.com/t/working-for-1-per-year/379943/4 "2006-11-10T22:52:49Z")
Thanks. I understand that there are certainly other ways to compensate these guys (the business execs, at least - not so sure about elected officials) so that they are actually getting substantial jingle for their efforts. What I’m really curious about is why they even bother with the token $1. Why not _nothing at all_ in salary? ---
**Author:** ![FormerMarineGuy](https://avatars.discourse-cdn.com/v4/letter/f/65b543/32.png) [@FormerMarineGuy](https://boards.straightdope.com/u/FormerMarineGuy)\ **Post date:** [November 10, 2006, 10:55pm UTC](https://boards.straightdope.com/t/working-for-1-per-year/379943/5 "2006-11-10T22:55:02Z")
[QUOTE=brad\_d] What I’m really curious about is why they even bother with the token $1. Why not _nothing at all_ in salary? [/QUOTE] I know I didn’t answer the question 100%, but I do not think it would have anything to do with taxes, as they still have to declare their profits from their stock options. If they were paid ‘zero dollars’, they would not be collecting a salary. At least they are a paid employee since they are collecting that simple buck. My answer is not definite and I will not take it personal if proven wrong. ---
**Author:** ![Exapno\_Mapcase](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/exapno_mapcase/32/1051_2.png) [@Exapno\_Mapcase](https://boards.straightdope.com/u/Exapno_Mapcase)\ **Post date:** [November 10, 2006, 10:57pm UTC](https://boards.straightdope.com/t/working-for-1-per-year/379943/6 "2006-11-10T22:57:50Z")
IANAL, but I believe that the difference between $1 and $0 falls under the doctrine of [consideration](http://en.wikipedia.org/wiki/Consideration): > [@](#): > > Consideration is something that is done or promised in return for a contractual promise. For example, in a promise between A and B for the sale of A’s car to B, B’s payment of the price of the car (or promise to do so) is the consideration for A’s promise. Consideration is a central concept in the common law of contracts. Under classical contract theory, consideration is required for a contract to be enforceable. Service contracts, and other contracts not governed by the Uniform Commercial Code, generally require consideration for a contract modification to be binding on the parties, because of the preexisting duty rule. > Elements of consideration > In order to meet consideration’s requirements, a contract must fulfill three elements. First, there must be a bargain regarding terms of an exchange. Second, there must be a mutual exchange. In other words, both parties must get something out of the contract. Third, the exchange must be something of value. Taking nothing wouldn’t satisfy the three elements needed for a legal contract. ---
**Author:** ![Canadjun](https://avatars.discourse-cdn.com/v4/letter/c/76d3ee/32.png) [@Canadjun](https://boards.straightdope.com/u/Canadjun)\ **Post date:** [November 10, 2006, 11:16pm UTC](https://boards.straightdope.com/t/working-for-1-per-year/379943/7 "2006-11-10T23:16:56Z")
IANAL, and even more so, IAMAUSL. However, I am sure all those dudes are bound by non-disclosure agreements and various other contractual agreements. Every time I signed an NDA at my employer (I’ve signed several) I received a miniscule sum of money (actually, they were generous at the end; I actually got C$ **5**!) in exchange for signing that piece of paper (of course, if I hadn’t, I would have been out of a job in addition to being out $5, but that’s a different issue). As Exapno said, there has to be an exchange of something of value for a contract to be valid. Presumably the $1/year is in exchange for signing the various NDA’s and other legalese. ---
**Author:** ![Canadjun](https://avatars.discourse-cdn.com/v4/letter/c/76d3ee/32.png) [@Canadjun](https://boards.straightdope.com/u/Canadjun)\ **Post date:** [November 10, 2006, 11:18pm UTC](https://boards.straightdope.com/t/working-for-1-per-year/379943/8 "2006-11-10T23:18:14Z")
Oops IANAUSL (I am not a US lawyer). ---
**Author:** ![friedo](https://avatars.discourse-cdn.com/v4/letter/f/8edcca/32.png) [@friedo](https://boards.straightdope.com/u/friedo)\ **Post date:** [November 10, 2006, 11:20pm UTC](https://boards.straightdope.com/t/working-for-1-per-year/379943/9 "2006-11-10T23:20:33Z")
I never got any compensation for signing an NDA. They were always presented to me as a condition of employment. (So the “consideration,” I guess, was that they were giving me a job in exchange for the NDA.) ---
**Author:** ![Ross\_Grumet](https://avatars.discourse-cdn.com/v4/letter/r/a88e4f/32.png) [@Ross\_Grumet](https://boards.straightdope.com/u/Ross_Grumet)\ **Post date:** [November 10, 2006, 11:22pm UTC](https://boards.straightdope.com/t/working-for-1-per-year/379943/10 "2006-11-10T23:22:50Z")
I hate to put it like this but who gives a damn? :dubious: 😕 ---
**Author:** ![Troy\_McClure\_SF](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/troy_mcclure_sf/32/4150_2.png) [@Troy\_McClure\_SF](https://boards.straightdope.com/u/Troy_McClure_SF)\ **Post date:** [November 10, 2006, 11:26pm UTC](https://boards.straightdope.com/t/working-for-1-per-year/379943/11 "2006-11-10T23:26:49Z")
The people talking about it. That OK with you? ---
**Author:** ![Ross\_Grumet](https://avatars.discourse-cdn.com/v4/letter/r/a88e4f/32.png) [@Ross\_Grumet](https://boards.straightdope.com/u/Ross_Grumet)\ **Post date:** [November 10, 2006, 11:31pm UTC](https://boards.straightdope.com/t/working-for-1-per-year/379943/12 "2006-11-10T23:31:51Z")
No worries, man. Didn’t mean to offend. I was trying to be funny. That’s why I used the emoticons. I’m still new here. I have a bit to learn, I guess. Sorry. Cheers, Ross ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [November 11, 2006, 12:07am UTC](https://boards.straightdope.com/t/working-for-1-per-year/379943/13 "2006-11-11T00:07:09Z")
[QUOTE=friedo] I never got any compensation for signing an NDA. They were always presented to me as a condition of employment. (So the “consideration,” I guess, was that they were giving me a job in exchange for the NDA.) [/QUOTE] I always assumed that the consideration of the NDA itself is simply getting to see whatever information is covered by it. The fact that you need that information to do your job is just a happy benefit. This makes sense to me because, if you signed the NDA but then lost your job, you’d still be bound by the NDA (I assume), whereas if the consideration of the NDA were having a job, and you didn’t get to have a job anymore… Lawyers, how’s my intuition? ---
**Author:** ![zuer-coli](https://avatars.discourse-cdn.com/v4/letter/z/ba9def/32.png) [@zuer-coli](https://boards.straightdope.com/u/zuer-coli)\ **Post date:** [November 11, 2006, 12:08am UTC](https://boards.straightdope.com/t/working-for-1-per-year/379943/14 "2006-11-11T00:08:50Z")
Ok, so people agree to work for a business @ a$1/year for some consideration, usually Stock options etc, What about Government? I know there are stories of folk that did that, but howcome the $1/year bit. My guess is that it was done so that the individual could be covered under a sovereign immunity clause. This is the idea that as long as a government worker acts within the Law he or she can’t be sued as an individual. O ---
**Author:** ![ftg](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/ftg/32/2801_2.png) [@ftg](https://boards.straightdope.com/u/ftg)\ **Post date:** [November 11, 2006, 3:42am UTC](https://boards.straightdope.com/t/working-for-1-per-year/379943/15 "2006-11-11T03:42:34Z")
Everything I know about contract law I learned from the movie “Paper Chase”. (Don’t say I didn’t warn you.) Yeah, a consideration of even $1 makes it a contract. I have signed several contracts over the years where there’s a “and for $1 you get X.” clause. E.g., buying a house. The house costs so much. The specified appliances we bought or sold for $1. ---
**Author:** ![Walloon](https://avatars.discourse-cdn.com/v4/letter/w/fbc32d/32.png) [@Walloon](https://boards.straightdope.com/u/Walloon)\ **Post date:** [November 11, 2006, 5:40am UTC](https://boards.straightdope.com/t/working-for-1-per-year/379943/16 "2006-11-11T05:40:41Z")
Having spent my Friday evening reading contract law (and with 32 more pages to read before I sleep), I’m ready to answer this. According to _Restatement 2nd of the Law: Contracts_, the bible of contract law, > [@](#): > > Offers made in consideration of one dollar paid or promised are often irrevocable. . . . The irrevocability of an offer may be worth much or little to the offeree, and the courts do not ordinarily inquire into the adequacy of the consideration bargained for. . . . Hence a comparatively small payment may furnish consideration for the irrevocability of an offer proposing a transaction involving much larger sums. But gross disproportion between the payment and the value of the option commonly indicates that the payment was not in fact bargained for but was a mere formality or pretense. In such case there is no consideration as that term is defined. . . . > > Nevertheless, such a nominal consideration is regularly held suffiicient to support a shortime option proposing an exchange on fair terms. The fact that the option is an appropriate preliminary step in the conclusion of a socially useful transaction provides a sufficient substantive basis for enforcement, and a signed writing taking a form appropriate to a bargain satisfies the desiderata of form. ---
**Author:** ![Walloon](https://avatars.discourse-cdn.com/v4/letter/w/fbc32d/32.png) [@Walloon](https://boards.straightdope.com/u/Walloon)\ **Post date:** [November 11, 2006, 6:05am UTC](https://boards.straightdope.com/t/working-for-1-per-year/379943/17 "2006-11-11T06:05:55Z")
Let’s say that an employer and a potential employee agree that the employee will be receive virtually all of his compensation in the form of stock options. But one of the things about options is that, as their name says, they are only optional. The employee never has to exercise the option if he doesn’t want to. But if the employee never exercises the option, and thus the employer never gives any compensation to the employee, no enforceable employment contract would exist. The employee could just not show up for work, or could quit in the middle of an important project, or worse, go work for a competitor. That’s bad for the employer. He wants an enforceable work contract. So, to make a valid contract, there must be some “consideration” by the employer. This can take the form of a one dollar salary payment. The _Restatement 2nd of Torts_ says, “Ordinarily, therefore, courts do not inquire into the adequacy of consideration. This is particularly so when one or both of the values exchanged are uncertain or difficult to measure.” The value of stock options are indeed often uncertain or difficult to measure, depending on the fortunes of the company’s stock between when the employer offers the stock option, and whether and when the employee exercises the option and buys the stock. ---
**Author:** ![OpalCat](https://avatars.discourse-cdn.com/v4/letter/o/8edcca/32.png) [@OpalCat](https://boards.straightdope.com/u/OpalCat)\ **Post date:** [November 11, 2006, 6:47am UTC](https://boards.straightdope.com/t/working-for-1-per-year/379943/18 "2006-11-11T06:47:52Z")
[QUOTE=Ross Grumet] No worries, man. Didn’t mean to offend. I was trying to be funny. That’s why I used the emoticons. I’m still new here. I have a bit to learn, I guess. Sorry. Cheers, Ross [/QUOTE] One thing that will go a long way toward understanding this place is to realize that a lot of folks here ask questions based on pure intellectual curiosity, rather than practical need for the answer. ---
**Author:** ![Quartz](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/quartz/32/267_2.png) [@Quartz](https://boards.straightdope.com/u/Quartz)\ **Post date:** [November 11, 2006, 10:57am UTC](https://boards.straightdope.com/t/working-for-1-per-year/379943/19 "2006-11-11T10:57:11Z")
Also, by having an actual salary, don’t they become eligible for all sorts of benefits - health insurance and the like? ---
**Author:** ![Billdo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/billdo/32/315_2.png) [@Billdo](https://boards.straightdope.com/u/Billdo)\ **Post date:** [November 11, 2006, 11:29am UTC](https://boards.straightdope.com/t/working-for-1-per-year/379943/20 "2006-11-11T11:29:55Z")
For somebody like Michael Bloomberg, it is purely symbolic. Personally, he has more money than God, and the $195,000 salary as Mayor of New York would barely be a rounding error on his tax return. By turning down the salary (or only taking $1), he is making a symbolic statement that he is doing the job out of a desire for public service, rather than because he is a professional politician. It also limits the possible criticism of someone so rich taking money out of the cash-strapped City government. In addition, he has declined to live at Gracie Mansion, preferring his Upper East Side townhouse (when he isn’t taking his private jet to Bermuda for the weekend). Soon after he decided not to live there, the city received a large “anonymous” donation for a major renovation which could, conveniently, be done when the mansion was unoccupied. On the other hand, he maintains a down-to-earth image by taking the subway to work and personally answering his listed [home telephone.](http://www.nytimes.com/2005/07/13/nyregion/13phone.html?ex=1278907200&en=36627faf649a47af&ei=5090&partner=rssuserland&emc=rss) [Next page](https://boards.straightdope.com/t/working-for-1-per-year/379943.md?page=2)