- 43 - 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 rangePage: Previous 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 Next
Last modified: May 25, 2011