How Jimmy Stewart Became The First Actor Take Trade Salary For Points On A Movie

Jimmy Stewart is widely considered to be one of the greatest film actors and stars of all time. His work with directors like Frank Capra and Alfred Hitchcock continues to be widely viewed today. From classics like "It's a Wonderful Life" and "Mr. Smith Goes to Washington" to thrillers such as "Rear Window" and "Vertigo," Stewart's performances have left an enduring mark on cinema.

But beyond his on-screen legacy, Stewart was also a trailblazer in Hollywood business practices. In the early 1950s, at a time when actors traditionally received a flat salary for their work, Stewart made a groundbreaking decision that would forever change the way stars negotiated their pay.

Jimmy Stewart was the first actor in history to trade salary for points on a movie's backend…

John Springer Collection/CORBIS/Corbis via Getty Images

A Deal Is Born

In the late 1940s, Stewart had a desire to make a film version of the successful stage play "Harvey," about a man who's friends with a giant invisible rabbit. Universal, the studio that owned the rights to the play, couldn't meet Stewart's standard salary at that time, which was $200,000 back in 1940s dollars. That's the same as $2.5 million adjusted for inflation.

So, Universal head William Goetz came up with an unusual deal for the time. They agreed to make "Harvey" with Stewart in the lead role, but instead of his usual salary, he would get a percentage of the profits from the film, with another more commercial project, a western called "Winchester '73," thrown in as well. To sweeten the deal as well as lighten the financial load for Universal, the cut would be spread out, which would reduce the taxation on Stewart, but really, the main incentive would be getting to make "Harvey" the way he wanted. Thanks to the final deal brokered by Stewart's famous agent, Lew Wasserman, that would include contractual control over the director hired to make the film as well as his co-stars. Plus, the portion he would get from the film's profits in lieu of salary was negotiated to a very generous 50 percent.

How It Turned Out

As it turns out, both "Harvey" and "Winchester '73" were both big hits at the box office. Jimmy ended up making $600,000 from "Harvey" and roughly the same from "Winchester '73." After adjusting for inflation, $1.2 million in the 1950s is the same as making around $16 million today. Obviously, in hindsight, Universal should have just paid him $200k twice. Worst of all, Universal opened the door for actors to request points over salary going forward, a practice that would eventually become fairly common, especially for A-List actors.

Other Actors Who Traded Salary For Points

One of the most notable examples of movie stars taking "points" in exchange for a piece of their salary happened, as with Stewart, for creative reasons. Tom Hanks gave up half of his standard $10 million salary during the production of "Forrest Gump" in exchange for a cut of the box office receipts in order to secure funding for the filming of some crucial scenes. Not only did he accomplish this but he ended up making about $70 million when the film became a surprise blockbuster smash.

Another famous beneficiary of the points system is Jack Nicholson, who was near the height of his fame and power in Hollywood when Warner Bros. courted him to play The Joker in their make-or-break production "Batman." In order to lure one of the biggest movie stars in the world to what might have been seen as a risky role, they offered a deal by which they would pay Nicholson just $6 million upfront instead of his usual $10 million salary, but in exchange, he would get a healthy cut of the film's box office. His payday at the end of the blockbuster theatrical run of "Batman"? Some $60 million, a record at the time, and Nicholson has continued to earn massive revenue from not just "Batman" but subsequent "Batman" sequels as well.

Then there's Sandra Bullock, who had WB over the proverbial barrel when they needed her as a last-minute replacement for Angelina Jolie in the 2013 space thriller "Gravity." To get her on board, they offered Bullock a 15% cut of the movie's box office gross, with an advance of $20 million up front! She was cut into the movie's home video revenue as well, and to date, she's made an estimated $80 million off  "Gravity."

Arnold Schwarzenegger and Danny DeVito both traded upfront salaries in exchange for points on the 1988 comedy "Twins." So did the film's director, Ivan Reitman. When the movie was an unexpected smash, making $216 million, they each made $40 million. After adjusting for inflation, that's the same as making $100 million today. Arnold has claimed it still stands as his biggest payday, even after a career full of action movie smashes.

Bruce Willis was another massive star who agreed to sign on to a smaller project for a chance to make bank. Before agreeing to star in a relatively low-budget supernatural thriller called "The Sixth Sense," Bruce negotiated $14 million plus 17.5% of the film's gross. The movie ended up being $670 million. In the end Bruce earned $114 million. That number gets even more impressive after you take into account inflation. After adjusting for inflation, $114 million in 1999 is the same as earning $194 million today. That still stands as the largest payday ever received by an actor from one movie.

Whether they know it or not, all these stars have Jimmy Stewart to thank for their monumental good fortune since he is considered the first major star to secure such a deal.