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“executive officers”, corporations have wide latitude in defining
their “executive officers”. See 17 C.F.R. secs. 229.402(a)(3),
240.3b-7 (2000). According to Ms. Meyer, for a variety of
internal reasons, a company’s four most highly compensated
executive officers may not in fact be that company’s four most
highly compensated employees. We find Ms. Meyer’s criticism
persuasive.
In light of (i) our conclusion that Ms. Meyer’s effort to
demonstrate the reasonableness of the compensation of Messrs.
Francis, Free, Hite, and Pugh is based on the executive
compensation surveys that are not comparable, and (ii) the fact
that the percentage increase in the pre- and postacquisition
compensation of Messrs. Francis, Free, Hite, and Pugh was 178,
367, 245, and 384 percent, respectively, we conclude that
petitioner has failed to establish clearly and convincingly that
any portion of the Retention Payments or disputed 1991 SRP
Benefits of these executives, deducted by petitioner in 1992,
constituted reasonable compensation for purposes of section
280G(b)(4)(A).
To reflect the foregoing,
Decision will be entered
under Rule 155.
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