That's right. He did it as a favour (not expecting it to be released - he was just recording it as a demo) and his payment was a set of mudflaps for his car.
This happens often - session musicians or singers are paid a flat fee for their services, regardless of the income that may arise from a successful record.
A good example is Clare Torrey who sang the fabulous 'Great Gig In The Sky' on 'Dark Side Of The Moon', but only actually got some rolling income for it when she re-recorded it for use in an asprin commercial.