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Mr. Wechsler’s Comp. as
FYE May 31 % of Aggregate Comp.
1992 53.6%
1993 60.3
1994 67.3
1995 64.0
1996 63.5
1997 41.2
1998 75.5
1999 43.5
Mr. Matthews concluded that Mr. Wechsler was entitled to a major
share of the aggregate compensation petitioner paid because Mr.
Wechsler was the driving force of petitioner’s business and was
instrumental in producing most of petitioner’s revenue.
Mr. Matthews also testified that petitioner’s 1992 through
1999 aggregate compensation amounts represent the following
percentages of petitioner’s 1992 through 1999 annual net revenues
and pretax income before payment of compensation:
Aggregate
Pretax Aggregate Comp. as %
Income Aggregate Comp. as of Pretax
Net Revenue Before Comp. Comp. % of NetIncome
FYE May 31 (millions) (millions) (millions) RevenueBefore Comp.
1992 $13.97 $12.1 $8.18 58.6% 67.6%
1993 16.18 14.3 8.13 50.3 56.9
1994 10.48 8.62 10.53 100.5 122.2
1995 17.17 15.58 9.18 53.5 58.9
1996 23.40 21.42 8.49 36.3 39.6
1997 0.94 (.93) 3.37 358.5 n/a
1998 13.81 12.82 9.91 71.8 77.3
1999 (10.68) (12.45) 3.44 n/an/a
Mr. Matthews opined that the annual compensation petitioner
paid to Mr. Wechsler for its 1992, 1993, 1995, and 1996 fiscal
years was “clearly reasonable”, since the percentages of net
revenue and pretax net income before payment of aggregate
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