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Edwards--were extremely large companies having, respectively,
average annual revenues of $3.79 billion, $3.43 billion, $2.79
billion, and $1.63 billion. The 21st-largest broker-dealer,
First of Michigan, had average annual revenues of $109.5 million,
and the 22d-largest broker-dealer, Rodman & Renshaw, had average
annual revenues of $68.0 million. In contrast, petitioner had
average annual net revenues of $13.7 million from June 1, 1991,
through May 31, 1998.
Mr. Matthews proceeded by first listing the net revenues,
aggregate compensation paid to all employees (aggregate
compensation), and pretax income for each of the 27 broker-
dealers for each period examined. He then calculated the ratios
of (1) aggregate compensation to net revenues and (2) aggregate
compensation to pretax income before aggregate compensation for
each of those broker-dealers for each of those periods. Next, he
calculated average ratios for each of the broker-dealers and
averages for the group as a whole. For the group as a whole, the
averages of (1) aggregate compensation to net revenues and (2)
aggregate compensation to pretax income before compensation were
60.1 percent and 84.1 percent, respectively. He compared those
averages to averages similarly computed for petitioner for its
1992 through 1998 fiscal years, which were 60.2 percent
(aggregate compensation to net revenues) and 68.9 percent
(aggregate compensation to pretax income before compensation).
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