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between variable compensation and company profits ranged from 0
to 64.4 percent.
Wertlieb testified that the fixed compensation paid to a
chief executive officer typically correlates with the sales of
his or her company and that this correlation may be expressed in
a mathematical formula that may be used to calculate the
“average” fixed compensation for the chief executive officer of
any size company near and within the range of the data. Wertlieb
testified that variable compensation of a chief executive officer
also correlates with his or her company’s sales. Wertlieb
concluded that Beiner’s reasonable compensation for each subject
year equaled the sum of: (1) Petitioner*s gross profit less the
gross profit that petitioner would have realized had it performed
at the ratio of gross profit to sales corresponding to the 90th
percentile of the 34 companies (31.49 percent for 1999 and 34.47
for 2000) (excess gross profits), (2) fixed compensation
consistent with the nature and size of petitioner and the amounts
paid at the 90th percentile of the 34 companies, as ascertained
using the referenced correlation for fixed compensation, and
(3) variable compensation consistent with prevailing executive
incentive practices and contingent on the level of sales and
profit performance, as ascertained using the referenced
correlation for variable compensation. Wertlieb calculated these
amounts as follows:
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