On “60 Minutes” this weekend, President-Elect Donald Trump said that he would refuse the $400,000 annual salary allocated for the job of commander in chief. “I think I have to by law take $1, so I’ll take $1 a year,” Trump said.
Wealthy CEOs and political leaders choose to give up paychecks for many reasons. Among tech executives like the late Steve Jobs, bypassing a salary is the ultimate way to bet on oneself: If the companies they run do well, they can earn a fortune. In some cases, there are also tax advantages in forsaking a salary in favor of stock options or other forms of compensation. Trump himself appears to have declared little or no salary over the years from many of his companies in order to avoid paying taxes.
As for how those CEOs and presidents actually perform on the job while collecting next to nothing in salary, it’s a mixed bag. The absence of a fat salary doesn’t mean that an executive or politician will be a bust, just as a huge paycheck is no guarantee of outstanding work. Most of the leaders who are bold enough to take on such situations are already highly successful people who aren’t motivated by money—or rather, not just by money.
What’s more, skipping a salary also sends a powerful “we’re all in this together” message to employees, investors, and constituents—all while demonstrating how stinking rich you must be to turn down income.