Estate of James J. Renier, Deceased, Kent L. Renier and Dubuque Bank & Trust Company, Co-Executors - Page 18

                                       - 18 -                                         
          documented wage and benefit figures, this assumption produces an            
          annual compensation package of $71,997 (60 hours at $19.23 per              
          hour times 52 weeks plus 20-percent fringe benefits).  If this              
          amount is adjusted for inflation for each of the years in the               
          base period,11 the total for the period is $418,117.  When added            
          to Mr. Sliwoski’s reasonable compensation estimate for the                  
          bookkeeping/office manager functions performed by Maria                     
          ($106,832) (the rate and hours assumptions for which we find                
          satisfactory), and increased by Renier’s average payroll tax                
          expense of 6.76 percent,12 the total reasonable compensation                
          expense for related-party employees for the base period is                  
          $560,436.  When this amount is subtracted from Renier’s actual              
          compensation to related-party employees during the base period of           
          $788,889,13 the excess compensation to related-party employees              
          equals $228,453, or an average of $39,540 per year.  Thus, we               
          conclude that a normalizing adjustment in this amount to Renier’s           

               11 Mr. Sliwoski used the consumer price index (CPI)                    
          published by the U.S. Census Bureau to adjust for inflation.  We            
          make a similar adjustment in our computation.  See U.S. Census              
          Bureau, Statistical Abstract of the United States, The National             
          Data Book 495 (119th ed., 1999).                                            
               12 Renier’s average payroll tax expense was derived from the           
          average payroll tax rate incurred by Renier during the base                 
          period.  The difference between this rate and the statutory rate            
          of 7.65 percent applicable during most of the base period is                
          presumably due to fringe benefits not subject to payroll tax.               
          See secs. 3111, 3121(a).                                                    
               13 Actual related-party compensation figures were taken from           
          Mr. Sliwoski’s report; Mr. Kramer provided no comparable figures.           

Page:  Previous  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  Next

Last modified: May 25, 2011