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$888,742 for BI's fiscal year 1989, $996,886.40 for BI's fiscal
year 1990, and $287,010 for BI's fiscal year 1991. This
computation is as follows:
Income before 8-percent of 8-percent of
taxes of GSI income before income before
FY ended & subsidiaries taxes taxes + $108,000
June 30, 1988 $5,748,557 $459,884.56 $567,884.56
June 30, 1989 9,759,287 780,742.96 888,742.96
June 30, 1990 11,111,080 888,886.40 996,886.40
June 30, 1991 2,237,628 179,010.24 287,010.24
Total 28,856,552 2,308,524.16 2,740,524.16
For the years 1990 and 1991 Mr. Schoenecker's bonuses were to
be computed on the income of GSI and its subsidiaries, but were,
in fact, computed on BI's income and, apparently, with some small
error even in that computation. Since BI's income in the years
here in issue was in excess of that of GSI and its subsidiaries,
the bonuses were overstated under the compensation formula set
forth in the corporate minutes for BI's 1990 and 1991 years. The
1974 agreement as to base compensation was honored through 1979,
while Mr. MacDonald was still a 50-percent stockholder of BI.
Once GSI acquired all of BI's stock, and Mr. Schoenecker, as the
sole stockholder of GSI was the owner of BI, the $108,000 began
to increase, and by the years here in issue it was greatly
increased. This is an indication that Mr. Schoenecker, as sole
owner, fixed his own salary without real reference to the value
of his services to BI. This is further demonstrated by the
difference in the formula for bonuses for other officers and for
Mr. Schoenecker and the fact that when the formula for Mr. Shaw's
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