Meg Whitman Joins the $1 CEO Club

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Meg Whitman, Hewlett-Packard's (HPQ) new CEO, will be paid $1 a year and receive a nonqualified option to purchase 1,900,000 shares of HP common stock. Her predecessor, Léo Apotheker, will walk away with get $7.2 million severance, a $2.4 million bonus and various stock options, which could take that figure much higher. Whitman joins a list of public company CEOs who have worked for $1, plus options or other incentives. Those pay packages often accompany solid results.

The most famous $1 CEO was Steve Jobs, who recently stepped down from that post as he continues to struggle with his health. Jobs also owns about 5.5 million Apple shares, so his incentive was fairly clear. He has made the most of that by leading Apple to spectacular success.

Car company CEO Lee Iacocca said he would work for $1 in 1978 when the company he helmed, Chrysler, had to borrow money from the U.S. The tiny cash compensation did not keep him from turning around the manufacturer, which is matched only by Ford's (F) turnaround three years ago.

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Oddly enough, Ford CEO Alan Mulally said he would work for $1 in 2008 if his company had to take any government bailout money. It did not, but the gesture got Ford some goodwill, and Mulally saved the number one U.S. car company from the Chapter 11 fate that General Motors (GM) and Chrysler could not avoid.

Another successful CEO who worked for $1 was Eric Schmidt of Google (GOOG), who, along with founders Sergey Brin and Larry Page, took the tiny pack packages in 2005. Brin and Page are billionaires because of Google's success, and Schmidt, who was recently replaced by Page as CEO, is fabulously wealthy.

Meg Whitman certainly won't be pinching pennies with the $1 salary. She made hundreds of millions of dollars when she was CEO of eBay (EBAY). But she spent tens of millions of dollars of that on her failed campaign to become California's governor. If she does a good job at HP, she may earn enough to replace all of that.

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