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percent of petitioner’s profits. Mr. Hakala compared his
calculated return for petitioner with the returns an independent
investor would have received by investing in other investments
consisting of similar securities.
While we adopt Mr. Hakala’s percentage-of-profits approach,
we believe that a 20-percent-of-profits bonus pool divided 40/60
between Mr. Wechsler and other bonus-paid employees would under-
compensate Mr. Wechsler, rewarding him with only 8 percent of
petitioner’s annual pre-bonus profits. In comparison to the
other financial industry companies that Mr. Hakala examined,
petitioner is a small company that had a much smaller workforce
and an extremely lean management team. Following its move to Mt.
Kisco, New York, and the outsourcing of its back-office
operations, petitioner in late 1992 had approximately 20
employees. By 1999, the number of petitioner’s employees
decreased to 12. Consideration of petitioner’s relatively small
size and workforce, we believe, demonstrates Mr. Wechsler’s
indispensable role in the success of petitioner’s business. We
have no basis for concluding that the chief executives of the
companies Mr. Hakala surveyed provided similar services and
shouldered responsibilities comparable to the services Mr.
Wechsler provided and the responsibilities he shouldered. Mr.
Wechsler organized petitioner, served as its principal manager,
worked long hours, ensured its compliance with all relevant
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