TIME compensation

25 CEOs Who Are Perfectly Happy Making a $1 Salary

HP CEO Meg Whitman Visits China
ChinaFotoPress—ChinaFotoPress via Getty Images

In the business world, there’s a sneaky version of success that goes beyond the seven figure salary: It’s the one figure salary.

Members of the $1 salary club earned just enough money in salary in 2013 to afford one McCafé from the McDonald’s dollar menu.

This phenomenon started in WWI and WWII, when executives sacrificed their salaries to help fund the wars, but were required to accept some form of compensation because U.S. law forbids the government from accepting work from unpaid volunteers.

But why would anyone today trade in a seven-figure-plus salary for one measly dollar?

Most dollar-a-year execs have received (or continue to receive) option awards which increase in value over time, as well as other forms of compensation—like bonuses and non-equity incentive plans. Such forms of compensation are based strictly on company performance, and not on a guaranteed yearly paycheck. This means executives can align their personal financial interests with company interests.

So who are the executives who can afford to collect a $1 a year salary?

Research engine FindTheBest scoured the web to find out, compiling compensation information from the SEC on thousands of executives from publicly traded companies across dozens of industries.

Following is the resulting list of 25 CEOs, Chairmen, and other top execs who banked $1 salaries in 2013.

Among the richest members of the $1 Salary Club are Oracle’s Larry Ellison (net worth $50 billion), Google’s Larry Page (net worth $31.2 billion), and Facebook’s Mark Zuckerberg (net worth 27.9 billion). Their wealth is so closely tied to their companies’ stock, that receiving a few hundred thousand dollars extra wouldn’t make a dent.

Of the 25 execs above, Larry Ellison made the most last year ($79.6 million), mostly due to the $76.8 million he received in option awards. Mark Zuckerberg also concluded the year with more than $1 in his pocket, making $653,165 through “other compensation,” compensation that does not fit into the SEC’s other defined categories of compensation.

Unlike Ellison and Zuckerberg, whose total compensation surpassed $1 in 2013 despite their salaries, Larry Page’s total compensation stayed put at $1. But that’s not to say he didn’t make money—Google’s stock price rose by 56 percent last year.

Two women also made the list, Meg Whitman (CEO of Hewlett-Packard) and Susan K. Barnes (CFO and Executive VP of Pacific Biosciences). Whitman, previously CEO of eBay, earned $17.6 million in 2013 despite her miniscule salary. Like Ellison, Barnes earned most of her money last year ($436,509) through option awards.

Among the executives who, like Larry Page, received only $1 in total annual compensation in 2013, are fellow billionaires Carl Icahn—Chairman of the Board of Icahn Enterprises whose net worth is $23.9 billion, and Richard Kinder—CEO and Chairman of the Board of Kinder Morgan Management whose net worth is $9.9 billion.

MONEY stocks

Stock Buybacks Are Back. Uh Oh.

Conventional wisdom says share repurchases are good for investors and stock prices. Here's why conventional wisdom is wrong.

A new report shows that stock buybacks soared nearly 60% in the first quarter and are nearing a record over the past 12 months. In a buyback, a company repurchases its own shares in the open market.

Apple APPLE INC. AAPL 0.8314% alone spent $18 billion at the start of this year buying up its own shares and is committed to repurchasing as much as $90 billion overall.

Sounds good, right? Don’t celebrate just yet.

Stock repurchases are a classic move in the CEO playbook. By buying up their own company’s stock, CEOs are trying to accomplish a couple of things that sound great on paper.

First, they are looking to reduce the total number of their company’s shares outstanding in the marketplace. That way, even if corporate earnings are flat, on a per-share basis the business will at least look more profitable to investors. Second, stock buybacks are thought to send an explicit message to Wall Street. That statement: “We think investors are undervaluing the true worth of our company, and we are willing to put our money where our mouth is.”

That all sounds quite appealing, but here’s the reality:

Stock buybacks don’t necessarily deliver the message companies want:

As Time’s Rana Foroohar points out, Wall Street may be getting jaded to this buyback ploy. For one thing, investors understand that some mature companies may simply be turning to buybacks as a way to artificially prop up their earnings. That’s not a sign of strength, but actually a signal of the onset of weakness.

Not surprisingly, companies that have announced buybacks haven’t been performing as well as you might expect lately. Here’s what’s happened to the price of an exchange traded fund, PowerShares Buyback Achievers POWERSHARES EXCHAN BUYBACK ACHIEVERS PKW 0.7154% , tracking an index of buyback stocks, vs. the S&P 500.

^SPX Chart

^SPX data by YCharts

Just because the CEO declares a company’s stock cheap doesn’t make it so.

If buybacks were really a value proposition, share buybacks would really spike in the depths of bear markets, when a stock’s valuation would be near a low. Yet’s that not the case. Buybacks surged in 2007 and 2008, just before the financial crisis hit. The S&P 500 S&P 500 INDEX SPX 0.5016% was trading at a price/earnings ratio of over 25, based on 10 years of so-called normalized, or averaged, earnings. That’s expensive.

Yet when the market’s P/E sank to a below-average 13 in the first quarter of 2009, buybacks were near their low points.

Today, buybacks are surging again only after the S&P’s P/E has climbed back above 25. This means companies are falling victim to the same force that individual investors do: rearview investing. The problem is, that almost never works.

Buybacks aren’t a sign of value, but rather management’s attempt to make their shares look cheaper.

There are some market watchers who think a buyback is merely an accounting trick. This piece that ran in SeekingAlpha a while back explains how this trick can boost profitability.

For starters, by reducing the total number of shares outstanding, a company’s earnings per share grows. Not only that, other measures of profitability plump up too. For instance, a buyback will also reduce the overall amount of equity on a company’s balance sheet. Thus, its Return on Equity will rise even if overall profitability doesn’t. Similarly, if a company uses cash to fund the repurchase, that money is an asset on the balance sheet. So as cash levels fall in a repurchase, the company’s Return on Assets (ROA) will look more attractive even though nothing fundamentally changed in the business.

Share buybacks don’t always lower the share count.

Sometimes, companies are forced to repurchase their own shares to make up for the fact that they’ve been dilluting their stock in other ways — for instance, as part of executive compensation packages.

It’s no surprise that seven out of the 12 biggest buybacks so far this year, in dollar terms, have taken place in the technology sector. The tech sector is notorious for compensating talent with stocks grants and options. In addition to Apple, IBM INTERNATIONAL BUSINESS MACHINES CORP. IBM 1.6977% , Cisco Systems CISCO SYSTEMS INC. CSCO 0.3868% , Oracle ORACLE CORP. ORCL 1.0497% , Microsoft MICROSOFT CORP. MSFT -0.0112% , and eBay EBAY INC. EBAY 0.677% were among the big tech names buying back their own shares this year.

CEOs time buybacks for their own compensation, not yours.

While a repurchase may seem like a benevolent act — companies often portray buybacks as returning cash to shareholders — it’s far from it. A buyback artificially boosts profits — most noticeably earnings per share (EPS). And what are executives most likely to be compensated on?

In a paper called “Bonus Driven Repurchases,” scholars from the University of Washington and Florida State argue that “By mechanically increasing current-year EPS, repurchases provide a means for CEOs to increase their EPS-driven bonuses.”

This is yet another reason why investors ought to press their companies to return cash to them in the form of dividends, not buybacks.

And lately, the market seems to agree:

^DJDVY Chart

^DJDVY data by YCharts

An index of dividend-paying stocks has pulled well ahead of the buyback group. It’s often good for shareholders when companies stop sitting on their cash. But some options are better than others.

TIME Executive Pay

CEO Pay Tops $10-Million Mark

First time median passes $10-million threshold

+ READ ARTICLE

CEO pay had long since crossed the six and the seven-figure thresholds, but now it’s all about eight figures.

Median CEO pay hit a record high of $10.5 million in 2013, an 8.8% rise over 2012, according to a new joint study by the Associated Press and Equilar, an executive pay research firm. Compensation packages, buoyed by soaring stock prices, reaped the gains from the market. CEO pay continued its fourth consecutive year of gains since the recession.

The typical CEO now makes 257 times the salary of an average worker, the AP reports. In 2009, CEOs made an average of 181 times as much. More than two-thirds of CEOs in the S&P 500 received a pay raise, with the heads of banks receiving the biggest hikes, averaging 22%.

The highest-paid CEO, with a total payout of $68.3 million, was Anthony Petrello of Nabors Industries, an oil and gas drilling company.

[AP]

 

TIME compensation

Target’s Ousted CEO Will Make $15.9 Million in Severance

Target Bob DeRhodes
Exterior signage of the Target Store in Torrance, Calif. Patrick T. Fallon—Bloomberg/Getty Images

The man who led Target during a data breach that compromised the personal information of as many as 110 million customers will make $15.9 million through his severance package, according to a newly released SEC filing.

Greg Steinhafel, who worked at Target for 35 years and was named CEO in 2008, was fired from the company earlier this month following last fall’s massive data breach, in which hackers stole credit and debit card information for 40 million Target customers and names, phone numbers, addresses or email addresses of 70 million customers. The breach was one of the largest security lapses in corporate history.

The monetary package is a combination of direct severance pay, pension funds and vested stock awards. In addition to the $15.9 million, Steinhafel will continue to draw his base annual salary of $1.5 million, as well as benefits, while he serves in an advisory role until August. In 2013 Steinhafel earned $13 million in total compensation, down from $20.6 million the previous year.

Target is not yet done reshuffling its executive suite. Today the company announced that it was firing the president of its Canadian division and realigning its merchandising team in the U.S. to improve performance.

TIME

Here Are the Top 10 Highest-Paid Executives Under 40

Jonathan Kitchen—Getty Images

If you’re the cheerful, satisfied sort—happy with your job, duties, and compensation—you may want to shuffle along to the next article. Keep the peace of mind you have. Cherish it. And whatever you do, forget that the following ten young executives pocketed over $5 million in 2013 alone.

Figures are from public SEC filings.

Note #1: total compensation includes stock awards and other bonuses: annual salary is typically just a small fraction.

Note #2: a few companies—like Yahoo—have yet to file their proxies, leaving one or two likely candidates (hey there, Marissa Mayer!) off this list.

Note #3: Where’s Mark Zuckerberg? Many famous young entrepreneurs do not make this list for two reasons. First, some well-known founders—like Zuck—take a very small salary, often $1 per year. Companies like Facebook save the big checks for all-star second-in-commands, where they need to lure top people away from other firms. Second, this is a list of 2013 compensation, so individuals who made a big splash—or got a large stock award—last year are more likely to win a place on the list.

 

10. Patrick Söderlund – Electronic Arts – $5.19 million

The video game industry has stumbled along lately, between Nintendo sales woes and garbage freemium games littered throughout mobile app stores. Nevertheless, Electronic Arts (EA) has remained consistent, churning out reliable blockbusters and even some decent mobile games.

EA owes part of its ongoing success to Patrick Söderlund, 39, racecar fanatic and international games guru. Currently an executive vice president at EA, he leads development on big game series like Battlefield and Need for Speed.

9. Andrew Wilson – Electronic Arts – $5.63 million

Obsessed with sports—including both virtual games and real-world leagues—Andrew Wilson rose through EA’s ranks largely through directing the company’s wildly popular FIFA franchise. He was appointed CEO in 2013, at the age of 39.

8. Ryan McInerney – Visa – $7.39 million

Ryan McInerney is only 38, but his resumè reads like a six-decade-long career. First, he worked as a principal consultant at McKinsey & Company. Next, he joined JP Morgan Chase, where he helped create and launch the company’s first mobile banking product. At 34, he was picked to lead the company’s entire consumer banking division, which put McInerney in charge of over 75,000 employees. Visa then lured him away in 2013, where he now serves as the credit company’s president.

7. Mark Tarchetti – Newell Rubbermaid – $7.87 million

It turns out you don’t always need to work in finance or tech to make a multimillion-dollar fortune. Mark Tarchetti, 38, is the executive vice president at Newell Rubbermaid, the company best known for its popular line of tupperware products. Of course, selling plastic, airtight kitchenware isn’t going to make you rich on its own—the company also owns a variety of writing brands, like Sharpie, Paper Mate, Expo and Uni-Ball. Today, Tarchetti leads much of the company’s research and development initiatives.

6. Hari Ravichandran – Endurance International Group – $9.6 million

Hari Ravichandran, 37, is the founder and CEO of Endurance International Group, a company that owns a variety of Internet brands (such as HostGator, Homestead, and Bluehost) and can be best described with a flurry of trendy tech phrases like “cloud-based” and “big data.”

5. Ryan Blair – Blyth – $9.61 million

CEO of ViSalus Science (a subsidiary of Blyth, Inc.), Ryan Blair, 36, focuses on weight management, dietary supplements, and energy drinks. He’s perhaps better known, however, as the gang-member-to-CEO who wrote about his experiences in the appropriately-titled, Nothing to Lose, Everything to Gain.

4. Sardar Biglari – Biglari Holdings – $10.9 million

Sardar Biglari, 36, began building Biglari Holdings at 18, a company that today employs over 22,000 people and contains six different subsidiary companies, including Steak ‘n Shake and Western Sizzlin. Several publications have compared the company to Warren Buffett’s Berkshire Hathaway, the Fortune 500 business that grew through Buffett’s smart acquisitions and investments.

3. Stephen Gillett – Symantec – $11.5 million

Stephen Gillett (36) first gained national attention after becoming the chief information officer at Starbucks in 2008, though his résumé includes such prominent companies as Yahoo, CNET Networks and Sun Microsystems. More recently, he became Best Buy’s executive vice president, but he moved on to Symantec after only nine months. It seems even Gillett couldn’t slow the downward slide of big box electronics stores.

2. Michael Schroepfer – Facebook – $12.6 million

Michael Schroepfer (39) has been a rising technical star at Facebook for years, moving from director to vice president to chief technical officer, a post he reached in 2013. Before Facebook, he had led development on Mozilla’s once-popular Firefox browser.

1. James S. Levin – Och-Ziff Capital Management – $119 million

The 31-year-old hedge fund trader is also an extreme outlier. Forget under 40-year-olds: he made more in 2013 than anyone, even Oracle’s Lawrence J. Ellison ($81.8 million), due to some very generous stock awards. James S. Levin first made national news in 2012 when he bet $7 billion (a third of Och-Ziff’s total assets) and made the company nearly $2 billion in one trade, accounting for over half of Och-Ziff’s annual profit. Last year, he received $119 million in stock, earning him more than the nine other men on this list combined.

TIME The Drucker Difference

$3 Billion Silicon Valley Suit Shows How Not to Manage

A Google logo is seen at the garage where the company was founded on Google's 15th anniversary in Menlo Park, California
Stephen Lam—Reuters

In 2006, Google’s Eric Schmidt suggested that his company had the perfect road map to “manage the new breed of ‘knowledge workers’” who now propel so much of the world economy, and especially the digital economy: follow Peter Drucker.

“After all,” Schmidt said, “Drucker invented the term in 1959. He says knowledge workers believe they are paid to be effective, not to work 9 to 5, and that smart businesses will ‘strip away everything that gets in their knowledge workers’ way.’ Those that succeed will attract the best performers, securing ‘the single biggest factor for competitive advantage in the next 25 years.’”

Unless, that is, you and your rivals agree that you won’t try to attract those high-performing folks in the first place, at least not actively.

In a case set for trial next month, Google, Apple, Intel and Adobe Systems have been accused in a class-action lawsuit of colluding to suppress wages between 2005 and 2009 by, among other things, agreeing not to woo each other’s employees. More than 64,000 people are seeking $3 billion in damages.

It will be up to a federal court jury in San Jose, Calif., to decide whether the tech giants violated antitrust law—though the current betting is that a pre-trial settlement is likely. What is already clear is that they violated Drucker.

In documents that surfaced this week, Schmidt and executives from other companies openly discussed their no-poaching agreement. In a March 2007 email, for example, Schmidt assured Apple’s Steve Jobs that a Google recruiter who’d called into Apple had gone against company policy and was being fired for her actions. “Should this ever happen again please let me know immediately and we will handle,” Schmidt wrote. Jobs replied with a smiley face.

Drucker would have found nothing to smile about in any of this. One of the hallmarks of the knowledge age, he pointed out, was the ability of software engineers and other specialists to shift fluidly among different employers.

“Employees who do manual work do not own the means of production,” Drucker wrote in Management Challenges for the 21st Century. “They may, and often do, have a lot of valuable experience. But that experience is valuable only at the place where they work. It is not portable.

“But knowledge workers own the means of production,” Drucker continued. “It is the knowledge between their ears.” The upshot of this reality: “Knowledge workers have mobility. They can leave.”

Among tech companies, one of the principal ways in which employees wind up leaving Corporation A for Corporation B is when they’re directly solicited in a process referred to as “cold calling.” “This form of competition, when unrestrained, results in better career opportunities,” the U.S. Justice Department noted in 2010 when it settled a civil suit with the same companies now embroiled in the class-action case.

It is in restricting cold calling that Schmidt, Jobs and their cohorts revealed something rather remarkable about themselves: They’re just as intent on exercising power over their workers as the old-line corporate dinosaurs that Silicon Valley tends to look down upon.

Drucker would have been the first to tell them that they’d never get away with it. “The center of gravity in employment is moving fast from manual and clerical workers to knowledge workers who resist the command-and-control model that businesses took from the military years ago,” he wrote in 1988 essay for Harvard Business Review.

Perhaps even more on point are Drucker’s words from Landmarks of Tomorrow—the 1959 book that Schmidt cited as an inspiration.

The organization “must never be permitted the dangerous delusion that it has a claim to the loyalty or allegiance of the individual—other than what it can earn by enabling him to be productive and responsible,” Drucker wrote. A company “must never be allowed to consider its relationship to the individual member as an indissoluble union; it must treat it as existing only for a specific purpose and therefore revocable.”

In a new introduction to Landmarks of Tomorrow, written in 1996, Drucker took credit for foreseeing “the shift to knowledge as the new major resource.” But he also acknowledged missing a huge development: “the information revolution.” Drucker said that this oversight was all the more inexcusable given that, at the time, he was consulting for IBM and lecturing to many an audience that the computer was about to upend “the way we were going to do work, be organized, think, and that, indeed, the computer was but a symptom of a basic change—the change from experience to information.”

In the end, Drucker concluded, “if the book were to be given a score as an ‘early diagnosis’” of some of the most significant trends emerging in society, “it would thus not get an ‘A+.’ But it probably deserves an ‘A-.’”

Schmidt and his pals didn’t miss the information revolution, of course. And I’ve praised Google in the past for some of its employee practices. But they whiffed so badly on understanding how to treat knowledge workers in regard to their employment prospects, I’d bet Drucker would give them an ‘F.’

TIME White House

Obama Aims to Close Wage Gap for Women With Executive Orders

The President will sign two executive actions that seek to close the gender wage gap. The aim of the orders is to make it easier for underpaid women to discover unfair differences in pay, but they'll apply only to federal contractors

President Obama is set to announce two executive actions Tuesday to increase wage transparency for federal contractors as part of a wider effort to close the wage gap for women.

The President will sign an Executive Order that prohibits federal contractors from retaliating against employees who discuss their compensation, with the aim of providing workers a way of discovering violations of equal-pay laws. A second order will require the Secretary of Labor to collect data on federal contractors’ worker compensation, organized by race and sex.

The aim of the Executive Orders is to make it easier for underpaid women to discover unfair differences in pay. But the measures would only apply to federal contractors, not to women in the broader workforce.

The President has timed the Executive Orders ahead of this week’s Senate debate on the Paycheck Fairness Act, which would allow women in the general workforce to seek remedies similar to those brought for racial discrimination. The bill is part of a broad push on equal pay by the Democratic Party, in a bid to shore up support from female and liberal voters ahead of this fall’s midterm elections.

“This is a huge victory for the 1 in 5 American workers employed by federal contractors,” said Deborah J. Vagins, ACLU senior legislative counsel. “Congress still needs to do its part and pass the Paycheck Fairness Act, but we’re one step closer to achieving pay equity thanks to this White House.”

TIME wall street

Wall Street Bonuses Soared 15% Last Year

Bonuses on Wall Street in 2013 reached their highest levels since the financial crisis, rising 15% to an average of nearly $165,000, even after firms saw lower profits and paid out pricey legal settlements

Wall Street bonuses catapulted upward in 2013, rising 15% to an average of nearly $165,000 even though firms like JPMorgan Chase and Morgan Stanley paid billions of dollars in legal and regulatory settlements.

New York securities firms will pass out $26.7 billion in cash bonuses and deferred compensation for 2013 performance, bringing the average bonus to $164,530. The increased estimate by New York State Comptroller Thomas DiNapoli does not include stock options or deferred compensation for which taxes haven’t been withheld.

Wall Street bonuses increased in 2013 despite lower profits than the year before and expensive legal settlements.

“Wall Street navigated through some rough patches last year and had a profitable year in 2013. Securities industry employees took home significantly higher bonuses on average,” Mr. DiNapoli said. “Although profits were lower than the prior year, the industry still had a good year in 2013 despite costly legal settlements and higher interest rates.”

Meanwhile, the average American worker’s compensation fell to 42.6 percent of the economy in 2012, the New York Times reports, its lowest level since World War II.

The bonus cash pool reached its highest levels since the 2008 financial crisis. As of December 2013, the securities industry employed 165,200, 12.6 percent fewer workers than before the financial crisis.

MONEY career

Ace Your Annual Review

No two words inspire more dread in managers and employees alike than these: performance reviews. Rather than letting your annual checkup get you down, though, consider the upside. This is one of the few times of the year you get to chat with your boss about your career. And with a bit of strategizing, you can set the stage for a big raise or promotion in the year to come.

Show you’re a top performer

Your supervisor probably doesn’t recall your every accomplishment over the past 12 months, so jog his or her memory. Richard Klimoski, a management professor at George Mason University, suggests submitting a one-page self-evaluation before the review. That way you draw the baseline from which your performance is measured. Sum up the year in three to five major contributions — with evidence. Highlight, for example, that you increased sales by 20% and share a testimonial from a new client. You’ll seem more genuine if you also identify skills or knowledge you must gain to take your performance to the next level.

Request a real critique

“Even when you don’t agree with it, feedback is useful,” Steve Miranda of Cornell University’s Center for Advanced Human Resource Studies says. “It provides insight as to how you’re being perceived.” You’ll need this information to clear hurdles standing between you and your career goals.

Related: Baby on the Way? Time to Make a Budget

Unfortunately, managers are often as uncomfortable giving negative feedback as subordinates are at receiving it. So you may have to drill down to get real advice. You might say, “I understand my presentations could be better. Perhaps I should work with a public-speaking coach?” Respond positively to criticism, owning up to problems and offering solutions; if you really disagree, ask for examples, so you can separate fact from perception.

Plan your compensation

Even if your review is tied to a pay increase, this generally isn’t the time to fight for more money — budgets are typically set by the time of the review, says Lori Holsinger, a principal at New York HR consulting firm Mercer.

Related: From Real Estate Exec to Laundromat Owner

What you can get: details on the salary review process to help you prep for next year. Find out how and when your raise was decided and who was consulted. Did you get a big bump? Ask what actions you can take to repeat the result. Vice versa if you got pennies.

Get on board with the boss

End the conversation by asking for measurable short- and long-term goals, advises Dallas career coach Jean Casey. Align at least a few of these objectives with your supervisor’s. You might say, “I know our department is dealing with a budget deficit. What can I do to help?” Your efforts to get on the same page will most likely make your manager happy, which will in turn keep your career moving forward. As Casey puts it, “You want to work with the boss — not for the boss.”

TIME Bangladesh

In Bangladesh, Charging of Garment Factory Owner Spurs Hope of New Era of Accountability

The owner of Tazreen Fashions, Delwar Hossain (C) is escorted to court in Dhaka on Feb. 9, 2014. STR / AFP / Getty Images

The Tazreen factory fire claimed at least 112 lives in November 2012, and thanks to international pressure the building's owner is finally behind bars awaiting trial

A Bangladeshi judge made history Sunday. For the first time, formal charges have been brought against the owner of a garment factory where workers have died. At least 112 people perished in November 2012 when the Tazreen Factory on the outskirts of the capital Dhaka burned to the ground. Western brands such as Walmart and Disney were amongst those sourcing clothes there.

That Tazreen’s owner, Delwar Hossain, is now behind bars awaiting trial is being treated as a milestone for the Bangladeshi export industry. “The name of the owner is on the charge sheet for the first time as a criminal, the state has managed to recognize that this is not oversight, but this is as an issue of criminal actions,” said Saydia Gulrukh, an academic who has fought tirelessly to see Hossain face his accusers in court.

Memories of that fateful day remain seared into the minds of survivors, most of who have yet to receive any compensation. “We ran from one stair to another stairwell to get out but authorities had already closed those two exit points,” says Mahfuza, an operator working in the factory when the fire broke out. The 20-year-old says she was filling an order for Walmart on the day of the blaze, and was forced to jump from the fourth floor because of the lack of exits.

Local police initially brought charges against Hossain in the immediate aftermath of the blaze, but these were mysteriously dropped. “He was getting some kind of support, so formally nothing came out against him,” said Humayun Kabir a former Bangladeshi ambassador to the U.S. This was despite a Home Ministry report soon after the fire acknowledging Hossain had acted with “criminal negligence.”

However, changing international attitudes to the global garments industry mean that once-powerful figures like Hossain can no long act with impunity. The Tazreen tragedy and the even deadlier Rana Plaza collapse spurred the U.S. to suspend the limited Generalized System of Preferences (GSP) duty free access Bangladesh enjoyed in response to the lax safety standards.

“International pressure definitely influenced [the case],” says Gulrukh. The E.U. had also threatened to revoke its equivalent allowance, deemed a vital boon to the $22 billion industry.

Bangladesh and the U.S. are scheduled to hold a meeting on restoring the GSP in May, which was postponed from December. “The government now wants to show that it is taking some action for the simple reason that by December the hearing for the GSP was supposed to take place,” notes Kabir.

Hossain surrendered to a court on Sunday to face charges of causing death by negligence after a warrant for his arrest had been produced on Dec. 31. His bail plea was rejected and 14 months after the fire he has finally been remanded in custody.

Hossain, “had managed to sidestep the legal process for 14 months, there was always someone helping from the inside, that’s how things happen,” says Gulrukh, who says many victims doubted this day would ever come. “Now workers believe its possible to hold owners to account, this restores some faith in the system.”

When Hossain’s bail plea was heard, he and his colleagues brought along the t-shirts that one of the company’s remaining factories are making, for the 2014 FIFA world cup, to emphasize the importance of the industry to the country. For the first time, however, it seems the lives of those lost have been placed above the profits their toil yields.

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