PMT, INC. - Page 16

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          appreciable extent caused the increase in petitioner's sales in             
          1990.  Such a fabric was desirable, not simply because of                   
          fortuitous fashion trends, but because such a fabric was useful             
          in a wide variety of garments.                                              
               Respondent makes the argument that the large amount of                 
          commissions paid by petitioner to its salespeople in 1990 creates           
          an inference that the efforts of the salespeople had a direct               
          influence on the increase in gross receipts that year.  However,            
          the evidence indicates that petitioner's salesmen received no               
          greater percentage commission that year than in previous years.             
          Therefore, this evidence does not indicate that the efforts of              
          the salespeople were entirely responsible for the dramatic                  
          increase in sales.  The evidence indicates that the sales staff             
          earned large commissions at least in part because of the                    
          desirability of the product petitioner produced during the year             
          at issue.                                                                   
               The second factor listed above is salaries paid by similar             
          companies for similar services.  Each party offered testimony of            
          an expert with respect to this factor.                                      
               Respondent's witness, E. James Brennan III (Mr. Brennan),              
          the president of a personnel and pay practice consulting firm,              
          testified that the salaries of the Penalbas were unreasonable.              
          He relied on information from other firms the same size in sales            
          as petitioner.  Mr. Brennan concluded that the CEO function                 
          should be used to compare to Mr. Penalba's salary, while the top            




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