2010 10-K: Part II Consolidated Operating Income Bonus Expense ($000)  2010 2009  2008 Bonus expense  $ 37,322 $ 21,019  $ 49,912 % change  77.6%  (57.9)%   (4.0)% % of revenue  6.7% 4.4%  9.9% Change  2.3pp (5.5)pp   (2.1)pp ($000)  2010 2009  2008 Operating income $ 121,059 $124,673  $ 138,876 % change  (2.9)%  (10.2)%  18.7% Operating margin 21.8% 26.0%  27.6% Change  (4.2)pp (1.6)pp  0.7pp Bonus expense, which we include in each of our operating expense  categories, increased $16.3 million in 2010 after declining $28.9  million in 2009. We reduced our bonus expense in 2009 as part of  our efforts to better align our cost structure with revenue in the  challenging business environment. In 2010, we reinstated a portion  of the bonus expense that was previously reduced. Bonus expense  for newly acquired operations also contributed to the increase, but  to a lesser extent. Overall, bonus expense as a percentage of revenue increased about  2.3 percentage points in 2010 and represents about 6.7% of revenue.  In 2009, bonus expense declined to 4.4% of revenue, compared  with 9.9% in 2008. The significant reduction in bonus expense also  reflects a slowdown in our financial performance in 2009 compared  with 2008. Prior to 2009, bonus expense represented approximately  10% to 12% of revenue. The amount of bonus expense is not a fixed cost. Instead, the size  of the bonus pool varies each year based on a number of items,  including changes in full-year operating income relative to the pre- vious year and other factors. We review and update our estimates  and the bonus pool size quarterly. We record bonus expense through- out the year and pay out annual bonuses to employees in the first  quarter of the following year. While we reduced operating expense in several areas with these  cost-savings initiatives, we also recorded a total of $9.5 million of  unanticipated expense for two separate matters, including $6.1  million of operating expense related to adjusting the tax treatment  of incentive stock options granted in previous years and $3.4 million  of operating expense for penalties related to the timing of deposits  for taxes withheld on stock-option exercises. Consolidated operating income decreased $14.2 million in 2009, as  the $23.5 million decline in revenue was partially offset by a $9.3  million reduction in operating expense. We took a number of steps  to reduce our cost structure in 2009—mainly by reducing employee  benefit costs and bonus expense. We reduced our single largest  discretionary cost, bonus expense, by $28.9 million, with changes  to the bonus plan in 2009. We also suspended matching contribu- tions to our 401(k) program in the United States, which accounted  for about $6.6 million of expense in 2008. With operating expense increasing more than revenue, our operat- ing margin was 4.2 percentage points lower in 2010. The margin  decline mainly reflects higher compensation, bonuses, sales com- missions, and employee benefits as a percentage of revenue. The  loss of revenue from GARS also had a negative effect on margins.  Acquisitions represented approximately 2 percentage points of the  margin decline for the year. Consolidated operating income fell $3.6 million in 2010. While rev- enue increased $76.4 million, our cost base rose more, leading to  lower operating income. The decline in operating income reflects  higher incentive compensation, including higher bonus expense and  sales commissions, modest compensation increases during the  second half of 2010, and reinstating some of the employee benefits  and other expenses we reduced in 2009. In 2010, costs rose across  all of our operating expense categories, with the exception of a  $9.5 million operating expense recorded in 2009 that did not recur  in 2010. 78