Jack Dorsey is tak­ing on a big job Twit­ter, but not a big pay­check.

The Washington Post Sunday - - BUSINESS - BY JENA MCGRE­GOR jena.mcgre­gor@wash­post.com

There are ap­par­ently many rea­sons Twit­ter’s board de­cided to name Jack Dorsey as per­ma­nent chief ex­ec­u­tive. He knows and un­der­stands the prod­uct. He had the sup­port of key in­vestors. And as a co-founder who has been lead­ing the strug­gling so­cial media ser­vice on an in­terim ba­sis since the sum­mer, he has the “moral au­thor­ity,” as newly named chief op­er­at­ing of­fi­cer Adam Bain put it, to make needed changes at the com­pany, which is fac­ing slow user growth and a crowded so­cial media mar­ket.

Yet Dorsey has another ad­van­tage: The board won’t have to pay him any­thing new to do the job.

In a reg­u­la­tory fil­ing, Twit­ter said “there are cur­rently no plans to pro­vide Mr. Dorsey with di­rect com­pen­sa­tion for his role” asCEO. That means, as when he was in­terim CEO, Dorsey will not re­ceive a salary, bonus or ad­di­tional stock com­pen­sa­tion. A Twit­ter spokesper­son de­clined to pro­vide fur­ther de­tails.

Of course, he hardly ap­pears to be hurt­ing fi­nan­cially. Forbes has val­ued his net worth at $2.2 bil­lion, and an Au­gust reg­u­la­tory fil­ing said Dorsey owned 21.9 mil­lion shares in the­com­pany. He also has another day job as the CEO, founder and ma­jor share­holder of the mo­bile pay­ments com­pany Square, which he is ex­pected to take public be­fore year’s end.

If the Twit­ter board sticks to those plans, Dorsey will join the rar­efied ranks of founder-CEOs who are sit­ting on big enough moun­tains of stock that they don’t need to be handed more. Ac­cord­ing to Equilar, the ex­ec­u­tive com­pen­sa­tion re­search firm, there are just five CEOs in the Stan­dard & Poor’s 500-stock in­dex with $1 or less in com­pen­sa­tion, ex­clud­ing ben­e­fits, perks, and pen­sion or other de­ferred com­pen­sa­tion costs.

On that short list are Google’s Larry Page, Whole Foods’ John Mackey, Kin­der Mor­gan’s Richard Kin­der and Fos­sil Group’s Kosta Kart­so­tis. Face­book’s Mark Zucker­berg also does not get new com­pen­sa­tion other than costs re­lated to his per­sonal use of air­craft.

Boards usu­ally make such ar­range­ments partly out of phi­los­o­phy and partly out of op­tics, says David Wise, vice pres­i­dent and U.S. mar­ket leader of the Hay Group, a man­age­ment con­sult­ing firm. If CEO pay is sup­posed to align the CEO’s in­ter­ests with that of share­hold­ers, and the CEO is al­ready sit­ting on an enor­mous pile of stock, “al­most no amount of com­pen­sa­tion that you can award him is go­ing to make a ma­te­rial dif­fer­ence with the own­er­ship stake he al­ready has,” Wise says. “It also sends the mes­sage the CEO is play­ing for the share­holder, and that’s all he’s play­ing for.”

Of course, this elite club of ex­ec­u­tives has had other mem­bers over the years. The lack of newly awarded com­pen­sa­tion marks yet another way Dorsey— who also runs two com­pa­nies, wears some­thing of a uni­form and is com­ing back to re­vive the com­pany he helped start— has some­thing in com­mon with the late Steve Jobs, whom he is re­ported to have idol­ized. The one­time Ap­ple CEO was paid $1 a year each year be­tween 2004 and 2011, when he stepped down.


Twit­ter chief ex­ec­u­tive Jack Dorsey is one of very few CEOs who take no com­pen­sa­tion.

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