- 85 -
added to the other compensation earned by the Retained Executives
in that year, constituted reasonable compensation for the
services rendered in 1992.46 Ms. Meyer’s opening report, which
compares the Retained Executives’ total compensation47 (including
Retention Payments) over the period 1992-95 with the total
compensation over the same period earned by comparable
executives, fails to demonstrate what amount of compensation was
reasonable for the services rendered in 1992. Ms. Meyer’s 4-year
aggregate approach effectively treats the Retention Payments and
1991 SRP Benefits as having been earned ratably over 4 years,48
when in fact they were lump-sum payments totaling $15,867,291
made in 1992, more than 65 percent of which petitioner treated in
its return as earned by the Retained Executives in 1992. Nothing
46 The parties generally disregard the fact that some
portion of the Retention Payments is theoretically allocable to
the 46 days in 1991 covered by the 1991 Employment Agreements.
As we do not consider this allocation material, we shall likewise
disregard it.
47 Ms. Meyer excludes from the Retained Executives’
compensation any portion of the 1991 SRP Benefits that was paid
to them in December 1992. As more fully discussed infra, we do
not agree that such amounts are appropriately excluded from 1992
compensation. Moreover, we believe Ms. Meyer’s treatment of the
1991 SRP Benefits conflicts with petitioner’s stipulation that
they were earned in 1992.
48 More precisely, Ms. Meyer did not treat the 1991 SRP
Benefits as having been earned ratably over the period. Instead,
she took the position that the payment of the 1991 SRP Benefits
in 1992 should be disregarded in determining whether the
challenged payments to the Retained Executives constituted
reasonable compensation. See supra note 47.
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