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compensation paid to Target’s CEO. Accordingly, Dr. Hakala
concluded that Mr. Menard’s compensation was not reasonable.44
3. The Parties’ Criticisms of the Expert Reports
a. Comparable Companies
Petitioners object to the inclusion in Dr. Hakala’s
comparison group of Dollar General, May Department Stores, Office
Depot, and TJX. Petitioners assert that those four companies did
not sell hard goods products, experience sustained sales growth
and profitability from 1988 through 1998, or attain $1 billion in
revenue by 1998.
In criticism of petitioners’ comparison group companies, at
trial, respondent established that, when Mr. Rowley selected
comparable companies based on sustained sales growth and
profitability between 1988 and 1998, he did not make certain that
the same CEO ran the comparison group companies for the entire
period. Mr. Rowley testified that he was certain only that Home
Depot and Staples had the same CEO for the period but emphasized
that CEO continuity was not necessary for purposes of
“understanding the market”.
44Dr. Hakala also compared Mr. Menard’s compensation to the
Watson Wyatt Executive Compensation Survey, a market survey which
compiles compensation data for various industries. Respondent
has not established that the surveyed companies are comparable to
Menards. Accordingly, we reject this portion of Dr. Hakala’s
analysis.
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