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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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