- -10
compensation for the 10 companies by percentage of sales: Upper
quartile, 3.2 percent; median, 2.1 percent; and lower quartile,
1.0 percent.6 Respondent allowed compensation of 3.2 percent of
net sales.
Petitioner contends that due to Mr. Haviv's talents and
market positioning, petitioner has no true competitors in the
United States. Therefore, petitioner presents what it considers
"the only person remotely qualified within 100 miles of Atlanta"
as a "competitor." He has been designated as Mr. W for this
trial. Mr. W owns 100 percent of the stock of what have been
designated as B Co. and C Co., each a retail jewelry store in a
city in the southeast region of the United States. At the end of
the companies' fiscal year 1991, C Co was merged into B Co.
Mr. W has been in the jewelry business for 57 years and has
operated C Co. and B Co. for 52 and 36 years respectively. B Co.
and C Co. have customers in Atlanta and have competed against
petitioner on a few occasions in the sale of large diamonds and
precious stones.
In 1991, there was an industrywide recession induced by the
10 percent luxury tax on jewelry. See Omnibus Budget
Reconciliation Act of 1990, Pub. L. 101-508, sec. 11221(a), 104
Stat. 1388, 1388-441 to 1388-442.
6 For example, 25 percent (in this survey 2) of the
companies compensated their officers greater than 3.2 percent of
annual sales.
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