How CEOs Work

CEO Perks


Steve Jobs, the former CEO of Apple whose health we discussed on a previous page, was a pretty notable exception when it comes to high CEO salaries. Apple paid him $1 a year. You read that right: a single dollar. But that doesn't mean he was living below the poverty line; he actually took home a whole lot more than that and was reportedly worth billions [source: Knowledge@Wharton]. That's because in lieu of a traditional paycheck, Jobs received stock options that allowed him to cash in on the success of the company.

CEO compensation is more than just salary. Actually, most top earners receive the bulk of their take-home pay from stock options. Larry Ellison, CEO of Oracle Corporation and the top-paid CEO of 2007, received a cool $182 million in stock options and a mere million from his salary [source: DeCarlo]. In addition to stock options, CEOs often get hefty bonuses, privileges to use company-paid perks (like private jets) and large contributions to their retirement plans. And although this is great news for CEOs, it gives researchers quite a headache. Because compensation takes so many forms, those who want to analyze, compare and determine CEO compensation find it a daunting task.

Overall, it's important to take sensationalized reports of a CEO's high salary with a grain of salt. It can be difficult to estimate his or her value to a company and to guess the various factors that go into the board's difficult decision of determining salary.

If you want more on the spoken and unspoken rules that govern a company, browse the links below.

Related HowStuffWorks Articles

More Great Links


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