- 109 -
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.
Page: Previous 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113 114 115 116 117 118 NextLast modified: May 25, 2011