- 39 -
versus its compensation to its chief executive officer). From
the calculated mathematical relationship between these two
selected factors among companies in each survey, Mr. Packard then
extrapolated and computed what he thought the suggested
compensation (based on each particular survey) should be for the
top two executive officers in a construction industry company
having the same annual sales or net income that petitioner had
for its 1996 fiscal year in issue.
Mr. Packard further averaged the suggested compensation he
determined for the two top officers of a company having the same
annual sales as petitioner under (1) his own survey, (2) his
percentage of income method, (3) the Watson Wyatt survey, and (4)
the Conference Board survey. Based on this foregoing
information, Mr. Packard concluded and opined that reasonable
compensation for Mr. Myers and Mrs. Myers for petitioner’s fiscal
year ended July 31, 1996, would be as follows:
Mr. Percentage Watson Conference
Packard’s of Income Wyatt Board
Survey Method Survey Survey
Average1
Chairman, President, and CEO $242,663 $303,479 $154,762 $381,140
$270,511
Second In Command, Chief 169,864 212,436 119,456 277,116
194,718
Operating Officer (COO)
Total Executive Compensation 412,527 515,915 274,218 658,256
465,229
Two Top Officers
1Sum of compensation Mr. Packard determined for the officer based on each of the
three surveys and his percentage of income method, divided by 4.
Recommended Top Executive Compensation
William Myers, Chairman, President, and CEO $300,000
Connie Myers, COO, Secretary, Treasurer, and 200,000
Chief Financial Officer
Total Executive Compensation Allowable 500,000
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