- 44 -
Mr. Brennan's report evaluated the reasonable level of
compensation for services provided by Messrs. Mitchell and DeJoria
prior to Mr. Mitchell's death and made an estimate of the
reasonable level of compensation for Mr. DeJoria for the 5 fiscal
years following Mr. Mitchell's death. Mr. Brennan opined that the
amounts Messrs. Mitchell and DeJoria paid themselves for the 1984-
89 fiscal years were far in excess of the maximum amounts paid to
comparable top executives at equivalent enterprises for employee
services. Mr. Brennan concluded that the maximum level of
reasonable compensation for Mr. DeJoria for 1990-94 would range
between $820,300 and $1,159,420, based on projections of an
increase in sales revenue for those years.
C. Critique of Experts
Not unexpectedly, each party criticized the opposing experts'
analyses. The following points highlight these disparate
perspectives.
1. Respondent's Arguments
Respondent criticizes Messrs. Weiksner's and McGraw's
valuations as based on the mistaken assumption that JPMS was a
fragile, disorganized, mismanaged, problem-ridden company on the
verge of collapse as of April 21, 1989. Moreover, respondent
criticizes three aspects of petitioner's comparable companies
analyses: (1) The kinds of multiples selected, the time periods to
which the multiples relate, and their weighting; (2) the
adjustments made to JPMS' financial data; and (3) the adjustments
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