Wechsler & Co., Inc. - Page 67

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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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