When the going gets tough, some CEOs bite the bullet. They announce they will take only a $1 salary until they turn their companies around. The highest-profile example of a $1 CEO recently was Citigroup CEO Vikram Pandit, who made a single dollar in salary for 2009 and 2010. Others in the club include the CEOs of GM, Chrysler and Ford. Before them, the $1 CEO club include dNelson Peltz of Wendy's/Arby's Group, Sumner Redstone of CBS, Apple's Steve Jobs, Oracle's Larry Ellison, Cisco's John Chambers and Google's ex-CEO Eric Schmidt.

One could argue that this is merely a PR ploy--that they CEOs don't need the money. Ex-CEO of Bank of America was once asked if he would consider a accepting $1 salary as Pandit did. His answer in an interview with the Charlotte Observer earlier this year: "No. But I've said before that I didn't make $800 million selling my hedge fund to the company, so I'm in a different category than Vikram."

Those inclined to believe that the $1 salary is merely a ploy aimed at media consumption will be heartened by a study recently noted by Fortune. Three academics took a look at total compensation for the fifty CEOs of public companies who made $1 in salary between 1992 and 2005 and found that thanks to equity-based awards they made just as much, if not more than their peers. While $1 CEOs gave up a median of $610,000 in salary, they gained more than $2 million in options awards. Boards perhaps wanted to make up the loss of salary to them, and the CEOs ended up better off. 

You could argue this both ways of course. Boards in this situation would no doubt argue that they their goal was to align the interests of the CEO with shareholders. But the study suggests the argument is weak because of the high rate of turnover amongst $1 CEOs. Once the $1 salary plan was ended, nearly half of the CEOs who accepted the cut stayed in their positions. That compares with total turnover amongst peer CEOs of just 9 percent. 

Even more interesting is the conclusion that $1 pay stunts seem to reflect less-than-stellar corporate governance policies. Only 34 percent had independent compensation committees, compared to an average of 67 percent, for example. The bottom line may be this: in the first year after companies announced $1 CEO salaries, they achieved returns comparable to peers. But after that, returns deteriorated, and these companies sorely underperformed. - Jim

Citigroup will be closely watched as something of a bellwether in this debate. The jury is still out.