"People on Wall Street are still laughing aboutthat quote," said one source close to HMC. "Mr.Sperling would be unemployed on Wall Street.People lose their jobs over things like that."

Last week, Sperling refused to stand by hisprevious assertion.

"The statement was taken well out of context,and it was a partial quote," Sperling said. "All Ican say is, look what the standard compensation isas a percent of profit in the venture business andapply those formulas and you come up with anumber."

But earlier in the interview, Sperlingsuggested that the salaries were low.

"The bonuses are still substantially lower thanthe industry standard compensation for that muchprofit," he said.

One source told Teh Crimson that, in additionto earning undeserved compensation, the Aeneasduo--and Sperling especially--failed to maintainadequate control and oversight of Aeneas'investments, leading to internal feuding at thecompany that resulted in the departure of some toppartners. The source said that former HMCpresident Walter M. Cabot '54 allowed Sperling tomake major decisions on a regular basis withoutsupervision.

"On investments up to [approximately $5million] Scott had...de facto free reign to dowhat we wanted while Walter was there," the sourcesaid.

The source said that when Meyer took over fromCabot as HMC president, he put in place a newboard of directors for Aeneas to supervise its twomanaging partners more closely.

Sperling and Eisenson acknowledged that a newboard exist, asserting that the idea for itscreation was theirs and that Meyer merely agreedto it. They said the board was established not torespond to lax business practices or inadequatesupervision, but to allow for more consultationon Aeneas' investment decisions.

"I think the context of 'a board was imposed onus' is completely wrong," Sperling said. "thecontext that the board was agreed to because weneeded 'stricter supervision' is categoricallyuntrue."

Sperling added that the company has always beenwell-managed. "I don't think anyone's ever feltthat Aeneas was 'out of control.' I don't thinkthat's been an issue," he said.

Asked about Sperling and Eisenson, Meyer saidhe is "pleased" with their performance, and hesaid Aneas has outperformed its benchmark with anestimated nominal rate of return over the lastdecade of about 12.5 percent, slightly less thanHMC s a whole, but satisfactory given the "toughtimes" for private placements in the 1980s.Sperling and Eisenson estimated the returns asapproximately 1 to 2 percent higher.

But the sources said that the HMC president'stwo major actions with regard to Aeneas sincetaking over the company's helm--the revision ofthe salary structure and the creation of the boardof directors--demonstrate serious concern. Andeven before Meyer took charge, the sources said,there was growing attention paid at HMC to thepersonalities and industry-wide reputations ofAeneas' two managing partners.

"Sperling enjoys the limelight," said onesource close to HMC. "Eisenson seems content tostay in the background and collect his salary."

Another source said Sperling was once warned bya top HMC official to keep a low profile.