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was as follows:
Year Salary Bonus Total Compensation
1981 1 1 $27,750
1982 1 1 164,000
1983 1 1 162,900
1984 1 1 352,200
1985 $154,000 $150,000 304,000
1986 156,600 125,000 281,600
1987 156,600 125,000 281,600
1988 185,000 250,000 435,000
1989 158,200 200,000 358,200
1990 156,000 722,913 878,913
1991 156,000 -- 156,000
1No breakdown between salary and bonus is available.
Petitioner had no fixed formula for determining Mr. Martin's
annual bonuses. Rather, its directors generally considered
petitioner's financial performance for the recent fiscal year.
For instance, concerning the $250,000 bonus paid to him for 1988,
minutes of petitioner's board of directors' meeting on June 17,
1988, state, in pertinent part:
4. Bonus to Lon D. Martin. The directors reported
that the past fiscal year had been particularly
successful and that it was appropriate to raise Mr.
Martin's annual bonus in light of such success.
Additionally, Mr. Martin's regular base salary has not
been increased for several years on the theory that his
total annual compensation would be tied significantly
to the performance of the corporation. In light of all
of the above circumstances, the directors ratified and
approved a bonus to Mr. Martin of $250,000.00.
With respect to the $722,913 bonus paid to him for 1990, the
deductibility of which is in issue, minutes of petitioner's board
of directors' meeting on June 27, 1990, state, in pertinent part:
5. Bonus to Lon D. Martin. Once again, the
corporation has enjoyed a successful and profitable
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