Shareholders who actively participate in the management of an S-corp must take a reasonable compensation. Reasonable compensation is usually calculated by how much you would pay an employee for doing the same type of work.
If there were no distributions then there would be no transactions to reclassify to wages. If there were distributions, then the IRS may reclassify the distributions to wages depending on the facts and circumstances that existed at the time when services were rendered.
Once it is reasonable to do so, the shareholder can resume a normal paycheck.
