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was $3,750 in fiscal year 1989. Peter Dunn received compensation
of $45,550, $48,050, and $51,550 in fiscal years 1989, 1990, and
1991, respectively. Decedent received compensation of $131,463
in fiscal year 1988 and $120,700 in each of fiscal years 1989
through 1991. The compensation paid to the officers of Dunn
Equipment was lower than the amount paid to officers of similarly
situated companies.
As of the valuation date, Dunn Equipment had been in the
heavy equipment rental business for more than 40 years and was
the largest heavy equipment rental business in its area of
operation. Because Dunn Equipment’s service and reputation were
superior to its competitors’, it held a substantial share of the
market for heavy equipment rentals and was able to command rates
above market. Ten large petrochemical firms accounted for 45
percent of its revenues. During the period from 1987 through the
valuation date, economic conditions were favorable for the
petrochemical industry because of low feedstock prices.
Consequently, Dunn Equipment’s revenues increased over the
period. However, the heavy equipment rental market also became
increasingly competitive during this period because cranes became
more readily obtainable and hourly rental rates declined.
Because of the competitiveness in the market, Dunn Equipment had
not increased its rental rates for more than 10 years.
Furthermore, in order to remain competitive, Dunn Equipment
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Last modified: May 25, 2011