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insistence on adherence to SEC disclosure conventions in this
circumstance actually produces significant distortions.
Specifically, Ms. Meyer would exclude any portion of the LTIP
payout from the measurement of the Retained Executives’ 1992
compensation, while at the same time she includes in the 1992
compensation of her purportedly comparable executives any long-
term incentive compensation payouts to them that happen to be
disclosed for 1992. Such amounts are included in the 1992
compensation of her purportedly comparable executives even where
they represent compensation for multiple years.55 Thus, the
version of conformity to SEC disclosure conventions that Ms.
Meyer advocates systematically inflates the 1992 compensation of
her purported comparables in relation to her computation of the
1992 compensation of the Retained Executives, which generates a
distorted comparison favoring petitioner’s position. We
accordingly reject it.
We believe that a clear and convincing showing of reasonable
compensation for purposes of section 280G(b)(4) in this case must
take some account of the substantial LTIP payouts made to the
Retained Executives. Mr. Rosenbloom’s determination to treat the
55 For example, Ms. Meyer includes in the 1992 compensation
of comparable executives Bielenski and Baisley, of W.W. Grainger,
Inc., their long-term incentive compensation payouts in 1992 of
$71,300 and $56,300, respectively, even though that company’s
proxy materials in the record disclose that the payouts covered 3
fiscal years (1990-92).
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