You have probably heard or read about it before, of CEOs who only earn a dollar in annual pay. Most channel their annual pay towards charity and other social-economic impactful projects.
It has become a trend of big tech companies’ CEOs, especially those from Silicon Valley. It was last year’s July when Avast’s CEO Ondrej Vlcek announced that he was joining the big team of CEOs who earn 1$ annually.
What made his case stand out? For a London listed company, this was a little unusual news, because most CEOs in this category are from the US. Before Ondrej was made CEO, he had worked for the company in various positions.
He started off at the company as an intern, and at the time, a teen. He has specialized in several things, but coding mastery stands out for him. Avast was originally an anti-malware software, but they have since branched out to offer VPN services too.
The company’s growth has, therefore, manifested before his eyes. The anti-malware software had a worldwide market share of 11.93% as of April 2020, making it among the top in the market. Why would Ondrej make a seemingly huge decision?
What It Means When a CEO Goes For an Annual Pay of $1
First things first, you need to understand that when a CEO takes such a stand, it could mean several things:
- They want to keep up with other CEOs who are already doing it
- To attract more shareholders for the company
- Strong stand on charity
- To prove long-term commitment to the company
The charity was the main cause Ondrej decided to contribute his pay to, joining the likes of Mark Zuckerberg. So, what is he left to earn from after making such a move? Besides annual pay, CEOs earn from other revenue-generating company channels such as equity grants and shares rewards.
Ondrej has a 2% share stake in the company, amounting to around $60million. This explains that for a CEO to reach to a point of taking $1 as annual pay, they have already heavily invested in the company.
For an anti-malware company that is dedicated to fighting malware (2019 recorded a total of 9.9 billion malware attacks), huge returns are expected. How? There has been an increase in cyber attacks amid the pandemic because most organizations have normalized working from home for their employees.
A surge in people working from home equals a surge in cyber attacks as cybercriminals take advantage of the corona invasion confusion.
People are then forced to heavily invest in anti-malware software to prevent cyber attacks, thus increasing sales for software companies. Avast wins in two ways because the company also offers VPN services. Just like anti-malware software, VPN sales have also increased during the pandemic. One blogger sheds more light on Avast and their VPN software.
Lessons from On the $1 Annual Pay
- Invest and or work in a company that doesn’t only focus on generating revenue
- If you believe in the potential of your company, and its growth in the future, don’t hesitate to give it you’re all. Long term investment guarantees your company’s success. This also works perfectly in attracting potential shareholders
- Motivate other employees to emulate sacrificial or charitable gestures
- Once you invest heavily in a company, you are motivated to drive it to success and so are the employees
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