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for the disposition of this motion, and we supplement those
findings with additional facts as appropriate.
Menards is an accrual basis taxpayer and has a fiscal year
ending January 31 for tax and financial reporting purposes.
Menards timely filed Form 1120, U.S. Corporation Income Tax
Return, for TYE 1998 on which it reported $3.42 billion of gross
revenue and $315,326,485 of taxable income.
Menards was incorporated in 1962 in Wisconsin. Since its
incorporation, Menards has been primarily engaged in the retail
sale of hardware, building supplies, paint, garden equipment, and
similar items. Menards has approximately 160 stores in nine
Midwestern States and is one of the nation’s top retail home
improvement chains, third only to Home Depot and Lowe’s.
During TYE 1998, Mr. Menard, the controlling shareholder of
Menards, served as its president and chief executive officer
(CEO). Mr. Menard’s compensation for TYE 1998 consisted of the
following:
Item Amount
Base salary
(regular weekly payroll) $62,400
Base salary
(paid in December) 95,100
5-percent bonus 17,467,800
Instant Profit Sharing 3,017,100
Christmas gift bond 185
Total 20,642,585
By comparison, the CEOs of Menards’s two closest competitors
received compensation in TYE 1998 as follows:
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