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earnings and capital stock. Notwithstanding petitioner’s poor
performance for its 1999 fiscal year, Mrs. Wechsler received a
substantial 1999 bonus of $308,000. The record reflects that
(except for Mr. Wechsler) petitioner’s other employees received
far lower bonuses for the 1999 fiscal year than Mrs. Wechsler
received. For example, petitioner paid Matt Dickinson (its vice
president and a principal, who had worked for petitioner since
January 1989) a 1999 salary of $149,969 and a 1999 bonus of
$115,768; petitioner paid Michael Revy (its vice president and a
principal, who had worked for petitioner since August 1998) a
1999 salary of $208,000 and a 1999 bonus of $188,000; it paid Mr.
Mittentag (its chief financial officer) a 1999 salary of $179,385
and a 1999 bonus of $43,461.
Mr. Wechsler set the amounts of petitioner’s 1999 payments
to Mrs. Wechsler. According to Mr. Wechsler, Mrs. Wechsler
agreed to work for petitioner only if she were paid at least
about $500,000 annually. That $500,000 minimum annual pay to
her, however, is substantially higher than the 1999 annual
salaries of the aforementioned officers who were unrelated to Mr.
Wechsler and is also significantly higher than Mr. Wechsler’s
1992 through 1998 annual salaries.13 We are unpersuaded that
13 On brief, petitioner argues that Mrs. Wechsler’s
compensation and Gilbert’s compensation were reasonable when
compared to the compensation paid certain other employees of
petitioner, such as Mr. Lobel, who was paid $434,000 for fiscal
year 1998. Petitioner notes that respondent did not challenge
(continued...)
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