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Petitioner's expert was the supervisor of a major accounting
firm's compensation consulting department for an 18-State region
in the vicinity of petitioner's corporate business location.
Petitioner's expert was unable to obtain representative data or
other publicly available information on the compensation of
executives in the spring industry. He reported that most spring
manufacturing companies are privately held. Petitioner's expert
relied on published sources from general manufacturing companies
for representative data. His survey reflected data from
manufacturing companies with gross sales approximating those of
Exacto.
Petitioner's expert assumed: (1) That Mr. Heitz performed
the following functions for Exacto: President and chief
executive officer, top manufacturing executive, top research and
development executive, and top sales and marketing executive, and
that the estimated market value of these four positions was
aggregated in determining reasonable compensation for Mr. Heitz;
and (2) that executive compensation was made up of three
components: Base salary, bonus, and long-term incentives.
Petitioner's expert concluded that the present value of long-term
incentives is typically 1.2 times the executive's base salary and
that Mr. Heitz’ market-based compensation should be within the
following parameters:
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