Wagner Construction, Inc. - Page 43




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               For comparison purposes, Dr. Lacey excluded two companies in           
          1995 (GoC and UC) and three companies in 1996 (GoC, MV, and UC)             
          because the companies reported losses.  Dr. Lacey calculated that           
          petitioner distributed more than 100 percent of its available               
          funds to management (Dennis and Curtis) in 1995 and 72.5 percent            
          in 1996 compared with the remaining publicly traded companies               
          that ranged from 1.8 to 24.2 percent in 1995 and 1.5 to 31.6                
          percent in 1996.  Generally, equity holders received twice as               
          much as management.                                                         
               Dr. Lacey also reviewed the annual proxy statements filed by           
          the 12 publicly traded companies with the Securities and Exchange           
          Commission.  The proxy statements indicate that four of the                 
          companies do not have a formal bonus policy.  The other eight               
          companies limit the size of the bonuses.  For example, five                 
          companies limit the bonus to a percentage of the base salary                
          (ranging from 50 to 150 percent).  Other companies create a bonus           
          pool determined on the basis of the company's financial                     
          performance.  Individual officers then receive a portion of the             
          total pool as recommended by top management or the board of                 
          directors.  One company gives its CEO a bonus equal to 5 percent            
          of the company's operating income above a target level.                     
               Dr. Lacey also used two studies compiled from data submitted           
          for 1995 to compare the bonuses petitioner paid to those paid by            
          other businesses.  Dr. Lacey's report does not disclose the range           






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