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construction industry. Mr. Brennan computed his compensation
figures based solely upon gross sales revenues.7 His report neither
included an amount representing retirement benefits for Mr. Leonard8
nor analyzed amounts paid to Mr. Leonard in prior years.
At trial, Mr. Brennan testified that petitioner substantially
underpaid Mr. Leonard prior to 1987. Mr. Brennan also admitted that
providing a financial guaranty would justify Mr. Leonard's
"eligibility for those highest average and highest maximum numbers"
that he determined.
Petitioner relied on two pipeline industry experts, Michael
Wagner and Michael Kesner. Both testified as to the unique features
of the pipeline construction industry and its relatively small size.
Mr. Wagner has been employed as a senior executive officer in
major Canadian pipeline construction companies and at the time of
trial was an industry consultant. His testimony regarding large
bonus payments was based solely upon his personal receipt of a
$1,300,000 bonus from his employer, O.J. Pipelines, in 1983,9 and
was not tied to any specific formula. In Mr. Wagner's opinion, a
7 The gross sales revenue figure Mr. Brennan used for
petitioner was incomplete; it did not include any part of either
the net income or the gross revenue from the All American
contract.
8 In the event we determine (which we do) that Mr.
Leonard is entitled to a retirement benefit, Mr. Brennan would
allocate $167,450 for such benefit.
9 O.J. Pipelines' 1983 gross revenues exceeded $100
million.
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