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Depot, Kohl’s, Lowe’s, Staples, and Target. For services
performed in TYE 1998, the comparison group companies paid
compensation to their CEOs as follows:
Company Compensation
Home Depot $2,841,307
Kohl’s 5,110,578
Lowe’s 6,054,977
Staples 6,868,747
Target 10,479,528
B. Rate of Return on Investment
For TYE 1998, the comparison group companies’ and Menards’s
rates of return on equity12 were as follows:
Company Return on Equity
Menards 18.8%
Home Depot 16.1
Kohl’s 14.8
Lowe’s 13.7
Staples 15.3
Target 16.7
III. Mr. Menard
Mr. Menard is a cash basis taxpayer with a taxable year
ending December 31. Between March 30 and April 15, 1999, Mr.
Menard timely filed Form 1040, U.S. Individual Income Tax Return,
for 1998.
A. Mr. Menard’s Duties and Responsibilities at Menards
Since he founded the company, Mr. Menard has been involved
in Menards’s daily business affairs. During TYE 1998, Mr. Menard
12As calculated herein, return on equity equals net income
divided by shareholders’ equity and multiplied by 100 percent.
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