With the economic turmoil straining their financials, top executives of many American corporates, including Citigroup chief Vikram Pandit and AIG’s Edward Liddy, are opting for just $1 salary.
Senior executives at Internet search giant Google have also decided to take a token salary of $1.
Internet search giant Google Inc’s top executive trio — co-founders Larry Page, Sergey Brin and chief executive Eric Schmidt — have voluntarily taken only one dollar in salaries in 2008.
Interestingly, these US companies have posted huge losses except Google whose profit margins have declined in the latest quarter.
In the wake of the financial turmoil, the Wall Street has come under severe criticism from different quarters for huge payouts and bonuses to its employees.
Recently, India-born Pandit, who has been at the helm of Citi for more than a year, said that he would take only USD 1 as salary, till the financial services major turns profitable.
Pandit would also not take any bonus. Citi has been severely hit by the financial meltdown and has already received billions of dollars from the US Federal government.
Earlier this year, appearing before the US house financial services committee along with seven other top US CEOs of companies which received bailout funds from the Federal government, Pandit said he would take only $1 as salary.
“My compensation for the year 2008 was my salary, which is one million dollar. I received no bonus. And as I stated earlier, I plan to take a one dollar a year in salary and no bonus until we return to profitability,” he said.
The chief executive of another beleaguered entity AIG Edward Liddy too would be receiving a salary of just $1. In addition, there would be no pay hikes for the company’s top executives throughout this year.
The US has already pumped in nearly $170 billion into AIG in recent months to help it tide over the economic crisis.
Besides, AIG had decided against no salary hike through 2009 for the 50 next-highest executives, in addition to bonus, severance and retention award restrictions.
In a recent filing to the US regulator Securities and Exchange Commission, Google said, “Eric, Larry and Sergey have voluntarily elected to receive only nominal cash compensation. Their primary compensation continues to come from returns on their ownership stakes in Google.”
Consequently, the company’s top bosses Schmidt, Page and Brin do not receive any salary or plan-based bonus other than one dollar per year, Google stated.