Wagner Construction, Inc. - Page 44




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          of the bonuses paid by the other companies.  According to one               
          survey, CEO's in the construction industry earned median bonuses            
          equal to 100 percent of their base salaries, and COO's in the               
          construction industry earned median bonuses equal to 53 percent             
          of their base salaries.  According to the other survey, CEO's               
          from all industries earned a median bonus equal to 90 percent of            
          their base salaries.                                                        
               Dr. Lacey compared petitioner to the industry as a whole               
          using two financial ratios derived from the Robert Morris                   
          Associates "RMA Annual Statement Studies".  He calculated                   
          officers', directors', and owners' compensation as a percentage             
          of sales for petitioner and compared the results with the median            
          for highway and heavy construction companies for which data was             
          available.  Dr. Lacey calculated that petitioner's percentage of            
          sales ratio (on the basis of compensation paid to Dennis and                
          Curtis) was 24.4 percent in 1995 and 17.9 percent in 1996.  He              
          calculated the median ratio for companies in each of the four               
          subcategories in the highway and heavy construction industry and            
          reported that the median ratio for companies doing highway and              
          heavy construction did not exceed 4 percent.  The report does not           
          show the range of ratios for companies included in his                      
          evaluation.                                                                 
               Dr. Lacey also calculated petitioner's pretax profit as a              
          percentage of tangible net worth and compared the results with              






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Last modified: May 25, 2011