C.H. Robinson, Inc. and Subsidiaries - Page 12

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               Respondent argues that the annual salary bonus paid to Meyer           
          of $245,905 for 1990 and of $250,000 for 1991 and 1992                      
          constitutes disguised consideration for acquisition of the assets           
          of MCB.  Respondent also argues that because Meyer intended to              
          remain with International and because International was already             
          achieving annual net profits of $700,000, the annual net profits            
          contingency was not significant.                                            
               Petitioners argue that the payments made each year as a                
          salary bonus constitute reasonable compensation for services                
          rendered by Meyer to International and are fully deductible as              
          ordinary and necessary business expenses.                                   
               We agree with petitioners with regard to the salary bonus.             
               Meyer’s receipt each year of the salary bonus was contingent           
          on Meyer's rendering significant services to International.                 
          During each year, Meyer managed the operations and expansion of             
          International, and Meyer maintained virtually all of the former             
          clients of MCB.  The earnings of International depended primarily           
          on the efforts of Meyer.                                                    
               In the 2 years prior to the acquisition of the assets of               
          MCB, Meyer received annual salaries from MCB of $600,000 and                
          $800,000.  During each of the years in issue and treating the               
          salary bonus as part of his annual compensation for services                
          rendered and not taking into account amounts paid under the                 
          covenant not to compete, Meyer's total annual compensation from             





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