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not intend in 1996 to compensate Jack for his earlier services to
petitioner. We have so found.
Under these circumstances we need not, and we do not,
determine whether Jack was undercompensated for his earlier
services to petitioner.
(4) Nonsalary Benefits
Ding stated that petitioner’s failure to provide nonsalary
benefits (other than health insurance) to its executives should
be taken into account in determining the maximum reasonable
compensation for Jack. She regarded as particularly important
the lack of “a defined benefit plan or deferred compensation
plan.” She relied on studies showing that (1) “Companies
typically provide their executives with benefits representing
24.4% of compensation” and (2) “Sixty-one percent of retail and
wholesale trade industries provide long-term incentive programs
for their top managers”.
In his rebuttal expert witness report, Hakala responded as
follows:
Compensation for Poor Benefits: This is an interesting
issue. It is difficult to quantify. BQH is not a large,
public company. Benefits are typically more limited for
officers of manufactured home dealerships. It is our
understanding that Mr. Brewer’s benefits were consistent
with the benefits realized by his top sales personnel. The
data relied upon by Ms. Ding is not applicable for a company
of the size and type of BQH. However, some elements for
benefits might be considered appropriate in a market
compensation analysis but not in the independent investor
returns analysis.
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