- 21 -
Although petitioner's expert Culbertson opined that the 1990
fiscal year compensation was justified because Mr. Martin had
been undercompensated in prior years, he offered no analysis or
explanation in support of his claim. In light of his failure to
do so, we give his conclusion little weight.
Except for perhaps 1980 and 1981 (covering petitioner's
first year and a half of operations), Mr. Martin appears to have
been very well compensated in prior years. His 1984 total
compensation of $352,200 was almost as much as his 1989 total
compensation of $358,200, despite petitioner's enjoying a
substantially better financial performance for its 1989 fiscal
year than for its 1984 fiscal year. Petitioner's 1989 fiscal
year gross receipts were more than twice its 1984 fiscal year
gross receipts. Similarly, its 1989 fiscal year net profit after
taxes was over 1.4 times its 1984 fiscal year net profit after
taxes. Thus, any possible earlier undercompensation by
petitioner of Mr. Martin was likely remedied long before 1990.
Further, pertinent minutes of the June 27, 1990, board
meeting authorizing petitioner's payment of the 1990 bonus in
issue make no mention that any part of this $722,913 was to
compensate Mr. Martin for his services in prior years.
Accordingly, we conclude that petitioner has failed to establish
that some of the 1990 fiscal year compensation in issue was to
remedy its alleged prior undercompensation of Mr. Martin. See
Page: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 NextLast modified: May 25, 2011