- 88 -
Corp. v. Commissioner, T.C. Memo. 1987-98, affd. 877 F.2d 647
(8th Cir. 1989), affd. without published opinion sub nom. Hilt v.
Commissioner, 899 F.2d 1225 (9th Cir. 1990); Schanchrist Foods,
Inc. v. Commissioner, T.C. Memo. 1977-129; William E. Davis &
Sons, Inc. v. Commissioner, T.C. Memo. 1975-229; Natl.
Underwriters, Inc. v. Commissioner, T.C. Memo. 1974-14. The
legislative history and the authorities under section 162(a)(1)
persuade us that reasonable compensation for purposes of section
280G(b)(4) should be determined on an individual basis. The
analyses provided by Ms. Meyer as well as Mr. Rosenbloom
facilitate such an approach, which we take hereinafter.
c. Retained Executives’ 1992 Compensation
Under a comparables approach, the initial step in assessing
whether the Retention Payments and disputed 1991 SRP Benefits
deducted by petitioner in 1992 constitute reasonable compensation
involves a determination of the compensation earned by the
Retained Executives for 1992 other than the challenged payments.
The amounts received by the Retained Executives as base salary
and STIP for 1992 are undisputed herein. However, the parties
and their experts disagree on how to account for certain other
compensatory payments related to 1992, including perquisites,
LTIP compensation, and the 1991 SRP Benefits payments.
As noted, both experts obtained compensation information for
comparable executives from SEC proxy filings. Their
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