I’ve discovered something truly strange: Jack Dorsey, one of the co-founders of Twitter, takes home an annual salary of $1.40. Why this odd amount? Well, it is a nod to the original 140-character limit for a tweet. He would of course be within his rights to ask for $2.80, since Twitter expanded the maximum number of characters that can be used to 280.
Dorsey is, of course, known for being a billionaire, and Twitter generated a revenue of $909 million in the last quarter of 2018 alone. His SEC filing revealed: “As a testament to his commitment to and belief in Twitter’s long-term value creation potential, our CEO, Jack Dorsey, declined all compensation and benefits for 2015, 2016, and 2017, and in 2018 he declined all compensation and benefits other than a salary of $1.40.”
Why does Dorsey do it?
Gerelyn Terzo writing at CCN suggests it makes him and his company look good, and Terzo remarks, “His creativity to reflect the Twitter character limit is second-to-none.” But let’s not forget that in 2018 he offloaded a lot of stock. He sold 1.7 million shares from Square to net him $80 million after taxes. And by the way, he only takes home an annual salary of $2.75 from Square. This company, which makes devices for small businesses to accept credit card payment sin person, was struggling to become profitable, but in 2018 its stock climbed by 80%. And the majority of Dorsey’s fortune is tied up in Square equity. As Forbes reports, “Thanks largely to the run-up in the stock, he is now worth $1.9 billion more than at the start of the year. His net worth currently stands at $4.7 billion, with his 61 million shares of Square accounting for $3.9 billion.” By contrast, Dorsey hasn’t touched his Twitter shares this year and they surged by 50% in value in 2018, giving him a stake worth $600 million.
Dorsey isn’t alone
Dorsey isn’t the only billionaire who takes a nominal salary. Donald Trump donates his $400,000 presidential salary to different causes and Elon Musk never cashes in his annual salary of $45,936, which he is forced to accept under Californian law. Mark Zuckerberg of Facebook is paid $1 per annum, as is Evan Spiegel at Snap.
Bankers prefer big money
Significantly, banking CEOs, do not take the same approach as the founders of media and tech giants like Twitter and Facebook. They are firmly wedded to their eye-watering salaries, despite the banking crash of 2007. Swiss Bank UBS is currently under scrutiny for its CEO’s excessive salary of $14 million. But Jamie Dimon at JP Morgan Chase is paid $30 million per annum. No wonder that when the banker was in front of Congress last week, he was closely questioned about why some of the bank’s staff were finding it impossible to reach the end of the month without needing overdraft facilities. Katie Porter’s questioning of Dimon should have made him squirm, but his face didn’t move a single muscle as he responded to her questions with, “”I don’t know, I’d have to think about that.”
But the real question here is: are the likes of Jack Dorsey really the good guys, and the bankers the baddies? Perhaps it is their employees who can answer that question?