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reasonable range for Mr. Leonard's 1987 base salary was $180,000-
$200,000; a reasonable range for his 1987 bonus was $1,200,000-
$2,000,000.
Mr. Kesner is an expert specializing in compensation matters
for Arthur Andersen in Chicago.10 He concluded that Mr. Leonard’s
1987 compensation was reasonable for three alternative reasons: (1)
Mr. Leonard was undercompensated by $2,005,000-$2,700,000 in prior
years; (2) the compensation was a deal bonus for locating and
delivering profitable business opportunities; and (3) part of the
bonus was a lump-sum payment in lieu of a formal retirement plan.
Mr. Kesner used survey data, and assumed revenues of $40 million for
each of the years.
We are unpersuaded by the analyses performed or opinions
expressed by either respondent’s or petitioner’s experts. As in
previous cases, we do not accept Mr. Brennan's conclusions because
they are not based on data from businesses that are sufficiently
similar to petitioner’s or that have the significant characteristics
of a specialized industry. Messrs. Wagner and Kesner were also
unconvincing because they were not objective and simply promoted
petitioner’s position. See Laureys v. Commissioner, 92 T.C. 101,
129 (1989). We do not accept their conclusions.
10 Mr. Kesner was not involved in Arthur Andersen's 1987
advice to Mr. Perks and petitioner.
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