- 14 -
Petitioner did not have a formal compensation plan, and it
did not have a written employment agreement with Beiner. During
each subject year, petitioner generally paid its employees other
than Beiner one twenty-fourth of their annual salary on the 1st
and the 15th of each month, and it paid them bonuses on December
31. During both years, Beiner generally was entitled to a fixed
salary of $50,000 per month and a bonus in December. Beiner did
not always receive the monthly salary to which he was entitled
when he was entitled to it because of problems that petitioner
experienced with its cashflow. During 1999, petitioner paid
$25,000 in salary to Beiner on January 1, September 1, September
15, October 1, October 15, November 1, November 15, December 1,
and December 15, and it paid $862,000 (inclusive of the $487,000
bonus) to Beiner on December 31. During 2000, petitioner paid
$25,000 in salary to Beiner on January 1, January 15, February 1,
February 15, June 1, June 15, July 1, July 15, August 1, August
15, September 1, September 15, October 1, October 15, November 1,
November 15, December 1, and December 15, and it credited him
with two payments of $450,000 (inclusive of the $750,000 bonus)
on December 31.
In December of each subject year, petitioner’s accountant,
Thomas Gallardo (Gallardo), met with Beiner to ascertain the
bonus that petitioner paid to Beiner during that year.
Petitioner generally ascertained each bonus by using a formula
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011