When Apple announced last week that Tim Cook got $378 million worth of stock when he became CEO in 2011, commentators quickly took shots at him, reminding us that Steve Jobs, by contrast, made just $1 a year.

That comparison was like hearing fingernails on a chalkboard to anyone who follows CEO pay levels closely.

While it's true that Jobs' salary was just $1 a year, he was worth an estimated $6.7 billion at the time of his death, in large part because of a huge stock grant he received from Apple (AAPL, news) in 2003.

Now, with proxy season -- that time of the year when companies hand shareholders annual meeting packets stuffed with fresh details on CEO pay -- around the corner, we're about to hear a lot of companies bragging about CEOs who make only $1 a year. In fact, for many if not most CEOs, salary is a relatively small part of compensation.

So I thought it would be fun to take a look at how much some of these "$1 CEOs" actually make. Because, trust me, it's always way more than a dollar. And some $1 CEOs are perennially the highest-paid CEOs around when you count all their earnings.

In short, you'd love to make a buck the way these CEOs do.

In theory, it's not entirely public relations

CEOs who accept a dollar salary deserve some credit.

image: Michael Brush

Michael Brush

After all, shareholders are saving about $1 million a year, the typical CEO salary at a large company. A $1 salary can also be a bold statement of confidence, since the only reward for a dollar CEO may come if the value of his or her stock and options grants goes up. "It's the CEO putting his (or her) money where his mouth is, saying, 'If the stock doesn't perform, I am not going to make any money,'" says Paul Hodgson, an analyst at GMI, an independent corporate governance analysis company.

But the latter is true only in theory. As with a lot of CEO pay questions, the devil's in the details with dollar pay, says Hodgson. As you are about to see, dollar pay is typically a myth, since the CEOs getting $1 in salary often get huge stock-and-option grants. And those grants often come without the strings that would tie them closely to their stock's performance.

Let's take a look at some examples where $1 pay means little -- and one case where it's meaningful and actually part of an attempt to create egalitarian pay inside a company.

Oracle: When $1 means $77 million

In his company's most-recent fiscal year, Oracle (ORCL, news) founder and CEO Larry Ellison took a pay cut of sorts; his salary dropped to $1 from $250,000 the year before, and $1 million the year before that. The company says he got just $1 in salary in part so that the board could focus on types of pay that might motivate him more -- like stock options.

That sounds nice in theory. Oracle shareholders save almost $1 million a year. And those options motivate Ellison to work harder to raise the stock's value, helping all shareholders.

But in fact, from a CEO pay perspective, Oracle's CEO compensation plan is "ridiculous for a number of reasons," says Hodgson.

Here's one I'd point out right away. Though Ellison has an estimated net worth of $33 billion because of all the Oracle stock he owns as founder, Oracle's board still makes shareholders pay more for his home security than what most CEOs at big companies get in salary for a year. In 2010-11, Oracle gave Ellison $1.53 million to cover home security costs, whereas CEO salaries typically cap out at $1 million. (Unless otherwise noted, the pay numbers here are from 2010, the most recent year available. They most likely haven't changed much.)

But what really irks pay experts like Hodgson and Brandon Rees, the deputy director of the AFL-CIO Office of Investment, is that Ellison gets any stock options at all. And their complaints are not merely the "politics of envy," as conservative presidential candidates like to say of anyone who criticizes excessive CEO pay.

What they mean is that Oracle's board, like any board, should design and grant options to motivate Ellison to work harder for shareholders. Remember, boards are supposed to deploy company money in ways that ultimately help shareholders, not just managers.

Yet Oracle's option grants to Ellison don't seem to do that, for two reasons. First, they contain no performance metrics. They are "pay for pulse," says Rees, meaning that even if Ellison does nothing and Oracle stock simply goes up as much as the market, Ellison is rewarded. Secondly, Ellison already owns so much stock -- 1.1 billion shares -- that it's hard to imagine that a few more will motivate him more.

After all, options come at a cost to investors. Companies have to create new stock to back options; this means lower earnings per share, which generally lowers a stock's value. Plus shareholders foot the bill for CEO profits on options, since the money doesn't come out of thin air. And Ellison's options grants are enormous. He got 7 million shares in 2010, which the company valued at $62.7 million. That, plus some other pay, took his total pay to $77.5 million, as calculated by the company.

Not bad for a guy with a $1 salary.

This has been going on for years. As of the start of 2012, Ellison had 44.4 million options that would be worth $396 million in profits assuming they were all exercisable, according to Equilar, an executive compensation data firm. And because those options grant him the right to buy shares for years to come, their potential value is much higher. "As founder, he has substantial ownership, and yet he continues to extract large options grants that dilute company shareholders year after year," says Rees.

Oracle declined to comment. But in Ellison's defense, I'll say two things. First, without him, there'd be no Oracle, since he founded the company in 1977 and has worked hard to develop it since. He deserves credit, and reward, for that. Second, he's signed the Giving Pledge agreeing to eventually give away most of his wealth to charity.

Continued on the next page. Stocks mentioned include: Duke Energy (DUK, news), Capital One Financial (COF, news) and Google (GOOG, news).

2 more $1-or-less CEOs

Ellison certainly isn't the only CEO whose annual salary figure seems irrelevant because he still takes big stock and options grants.

At Duke Energy (DUK, news), for example, CEO James Rogers doesn't even take a buck. He gets zero a year in salary. But throw in generous stock and options grants, and his pay was really $8.8 million in 2010 and $6.9 million the year before. The company says he is paid only in stock to align his interests with those of shareholders, and that he is the largest individual shareholder at the company.

And consider Richard Fairbank, founder and CEO of Capital One Financial (COF, news), who earns $1 a year in salary. In 2010, Fairbank owned, or had exposure to via options, about 9 million Capital One Financial shares, according to company filings, which seems like it ought to be enough to motivate him to drive the company's stock higher.

Yet part of that position came from a large 2010 grant of shares and options valued by the company at $14.7 million at the time. And while taking only $1 in salary that year, he also got $48,886 to cover the cost of a driver and home security -- which is about the typical income for a U.S. household. Some of the stock Fairbank received was linked to performance. Capital One's total return of 11.6% in 2010 beat the S&P Financials Index for the third year in a row, a spokesperson for the bank said.

Google: Saying no to the options bonanza

You might think by now that being a company founder -- like Ellison or Fairbank -- gives someone the clout or the right to regularly extract tens of millions a year in the form of stock options grants. Or you might think those grants are necessary to keep the CEO working and the company growing.

But this isn't so.

Google (GOOG, news) co-founder and CEO Larry Page, along with co-founder Sergey Brin, asked that their salaries be reduced to $1 in 2004, and they have stayed there since. By 2013, they'll have earned just 10 bucks each.

But they've also declined options and stock grants for years. So did Eric Schmidt, who served as CEO for several years until April 2011, when Page took over.

In other words, unlike Ellison at Oracle and Fairbanks at Capital One, Page, Brin and Schmidt don't regularly use their sway over the board to keep extracting more options. And yet, they seem adequately motivated; Google has done OK under their leadership.

It's easy to argue that this is because they already have enough stock. Page and Brin have about 27 million shares each. And that's after some hefty selling. Since 2004, for example, Page has sold 9.6 million shares, or $3.3 billion worth. Schmidt has about 9.1 million shares. (He did go off the no-options policy in 2010, taking about 250,000 shares in stock and options grants last year. And for the past three years, Schmidt has gotten about an additional $300,000 shares a year, mostly as reimbursement for personal security.)

And here's an odd and fun fact: Along with their $1 salaries, these three also get an annual holiday bonus of about $1,700 each. You have to wonder what these billionaires do with that windfall; perhaps it's their Christmas club account.

The most underpaid CEO?

For someone who's really close to actually being a $1 a year CEO, let's turn to John Mackey, co-founder and co-CEO of Whole Foods Market (WFM, news).

In 2007, Mackey voluntarily reduced his annual salary to $1 and elected to forgo bonus and options awards. His total pay for 2010 was $45,968, about the median household income in the U.S. He got the $1 salary, and the rest was for "accrued paid time off."

Mackey's decision to decline new options might surprise you, because unlike our other $1 CEOs, he doesn't have that big a stake in the company. He has 1.2 million shares. And he had only about 66,000 options, all exercisable, with a paper value of $1.5 million at the start of the year, according to Equilar.

Since 1993 he has sold 1.3 million shares, grossing $19.4 million, according to Thomson Reuters. Not all of that was profit, since a lot of those shares were converted from options.

Why is Mackey's pay so low, even though he seemingly could extract much more wealth as a co-founder of Whole Foods? The company says it's part of a philosophy of "egalitarian" pay -- a policy that has Whole Foods capping salaries for execs at 19 times the average annual wage of all full-time employees. That average was about $37,000 in 2010, which means execs can't make more than around $700,000 a year in salary. (For a look at CEOs earning the most compared with their own employees, read "7 CEOs pulling in outsized paychecks.")

Though annual pay for two execs topped $4 million in 2010 when options and stock grants are included. Mackey takes only that $1 salary, and no options. This makes him "somebody who is being altruistic for philosophical reasons," says Hodgson, and not just for PR purposes.

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So the next time you joke about "whole paycheck," at least remember that considerably less of the profit from your spending goes to the executives at Whole Foods than goes to their counterparts at other companies where you spend money. Even $1-a-year CEOs are usually taking a lot more off the top.

At the time of publication, Michael Brush did not own or control shares of any company mentioned in this column.

Michael Brush is the editor of Brush Up on Stocks, an investment newsletter. Click here to find Brush's most recent articles and blog posts.

Stocks mentioned on the previous page: Oracle (ORCL, news) and Apple (AAPL, news)