In the tech industry it is very common for people to have the knowledge about Steve Jobs’ $1 salary but in the real world, some people reject that its true and some just say HOW?
I am going to answer that HOW question since it is a fact that Steve Jobs only makes $1 in salary.
The guy who was once asked to leave Apple, came back with more than just vengeance. He decided that he will prove to everyone that he is the MAN and yes, he is!
Since 1997, Jobs has not taken a salary of more than $1 per year. You ask “How does that happen?” Well it is very simple, he has 5.5 million shares of Apple stock, which makes him a Billionaire on paper. Though he hasn’t sold anything yet
Now you are saying, “So if he doesn’t sell stock then how does he do it?”
Steve Jobs sold Pixar Animation to Disney in 2006. That was an all stock deal, that means, no cash was exchanged. Since Jobs was the majority shareholder, the deal made him the largest individual shareholder with 7% of Disney stock, 138 million shares.
Disney pays dividends though Apple doesn’t. It declared $0.35/share cash dividends on December 2, 2009.
$0.35 x 138 Million = $48 Million
Tax rate on the dividends is 15% but if he received a regular CEO salary, he would be in the highest income tax bracket of 35%.
Is he avoiding paying taxes? Not really. He is not doing anything wrong or illegal. He has an option and he is using it. There is no harm in being smart about your money.