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constitute a principal basis for each expert’s opinion regarding
the reasonableness of the Retained Executives’ compensation. We
shall consider the experts’ differences in more detail
hereinafter.
2. Historical Compensation
As noted, Mr. Rosenbloom also performed an analysis of the
Retained Executives’ compensation before and after the
acquisition by Schneider. Notably absent from Ms. Meyer’s
opening report is any serious consideration of the Retained
Executives’ historical compensation.40 The legislative history
of section 280G makes clear that one factor to be considered in
determining reasonable compensation for purposes of section
280G(b)(4) is “compensation * * * paid to the disqualified
40 Ms. Meyer addressed historical compensation only in her
rebuttal report, by way of criticizing Mr. Rosenbloom’s analysis.
In connection therewith, Ms. Meyer reached the conclusion that
the appropriate historical comparison should be between the
compensation paid to all of petitioner’s senior executives prior
to the acquisition and the compensation paid to all such
executives after the acquisition. In Ms. Meyer’s computations,
the increase in these two figures was only 48 percent between
1988 and 1992, which she found unremarkable. In reaching this
figure, however, Ms. Meyer omitted entirely the Retention
Payments and 1991 SRP Benefits paid to the Retained Executives in
1992, notwithstanding the fact that petitioner has stipulated
that a substantial portion of the former and all of the latter
were earned by the Retained Executives in that year. Moreover,
as discussed more fully hereinafter, we reject the notion that
compensation payments of this magnitude can be ignored in
measuring the reasonableness of the Retained Executives’
compensation in 1992. Accordingly, we accord no weight to Ms.
Meyer’s attempt at an historical analysis of the Retained
Executives’ compensation.
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