Square D Company and Subsidiaries - Page 20

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          compensation, excluding the Retention Payment,63 was $626,997.              
          Consequently, petitioner has failed to show that any portion of             
          the Retention Payment deducted with respect to Mr. Brink in 1992            
          constituted reasonable compensation for purposes of section                 
          280G(b)(4).                                                                 
                         (ii)  Mr. Denny                                              
               Ms. Meyer identified 10 executives in her rebuttal report              
          that she considered comparable to Mr. Denny in 1992.  We conclude           
          that Mr. Brann of Litton Industries, Inc., should be disregarded            
          because as noted we believe that company is not comparable to               
          petitioner.  We conclude that the remaining nine executives are             
          comparable.64                                                               



               63 Respondent concedes that the entire amount of the 1991              
          SRP Benefit paid to Mr. Brink and deducted by petitioner in 1992            
          was not contingent on a change in control under Q&A-24(c) of sec.           
          1.280G-1, Proposed Income Tax Regs., 54 Fed. Reg. 19399 (May 5,             
          1989).                                                                      
               64 Included among these nine is an executive from Rockwell             
          International Corp., a company with respect to which we                     
          previously accepted Mr. Rosenbloom’s judgment that it was not               
          comparable to petitioner.  However, Mr. Rosenbloom concedes that            
          Mr. Davis of Rockwell International Corp., who headed an                    
          automation equipment subsidiary, is comparable to Mr. Denny, and            
          we accordingly accept Ms. Meyer’s use of that executive as a                
          comparable for Mr. Denny.                                                   
               In addition, Mr. Rosenbloom raised specific objections to              
          Ms. Meyer’s use of certain other comparable executives for Mr.              
          Denny.  On balance, we find these objections immaterial.  If one            
          took the 90th percentile of the 1992 compensation of the                    
          executives treated by Mr. Rosenbloom as comparable to Mr. Denny,            
          that figure would be higher than the 90th percentile of the 1992            
          compensation of the executives treated as comparable by Ms.                 
          Meyer.                                                                      




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