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Appropriate Compensation for Mr. Bennett
Direct Pension Profit Total Actually
FYE Compensation Plan Sharing Compensation Paid Difference
7/29/90 $1,146,800 $126,100 $899,900 $2,172,800 $2,030,000 $(142,800)
7/28/91 810,000 132,400 1,292,800 2,235,200 2,030,000 (205,200)
8/02/92 1,140,300 139,000 729,700 2,009,000 2,050,200 41,200
Total $3,097,100 $397,500 $2,922,400 $6,417,000 $6,110,200 $(306,800)
Appropriate Compensation for Mr. Sokol
Direct Pension Profit Total Actually
FYE Compensation Plan Sharing Compensation Paid Difference
7/29/90 $513,400 $327,000 $300,000 $1,140,400 $670,000 $(470,400)
7/28/91 511,400 343,300 430,900 1,285,600 670,000 (615,600)
Total $1,024,800 $670,300 $730,900 $2,426,000 $1,340,000 ($1,086,000)
Although we do not rely solely on Mr. Gallagher's conclusions
in this regard, we do find his qualifications in the area of
executive compensation superior to those of Mr. Burns. In
addition, Mr. Gallagher contemplated many of the same factors
considered by this and other courts in developing his compensation
plan for Messrs. Bennett and Sokol. Therefore, we find his
conclusions regarding the reasonable compensation of Messrs.
Bennett and Sokol persuasive.
8. Compensation Paid in Prior Years
An employer may deduct compensation paid to an employee in a
year although the employee performed the services in a prior year.
Lucas v. Ox Fibre Brush Co., 281 U.S. 115, 119 (1930); see also
R.J. Nicoll Co. v. Commissioner, 59 T.C. at 50, and the cases cited
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