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June 30, 1998 through June 30, 2000”. After reviewing the
attachments to the report, it is clear that Dr. Sliwoski included
data from SIC 1799, “Special Trade Contractors”, not SIC 1742.
Dr. Sliwoski testified that he used the SIC 1799 data because it
includes a broader pool of construction industries than SIC 1742
and provides maximum compensation figures.
Respondent exhorts us to disregard petitioner’s expert’s
report and testimony with respect to the external comparison
analyses because they both relied on the incorrect SIC. In this
case, we agree such action is warranted because both experts
agreed that SIC 1742 was the most relevant, not SIC 1799. See
Helvering v. Natl. Grocery Co., 304 U.S. 282, 295 (1938) (holding
that the trier of fact is not bound by any expert witness’s
opinion and may accept or reject expert testimony, in whole or in
part, in the exercise of sound judgment).
Mr. Herber correctly used SIC 1742 to compare Darle’s
compensation. The ERI data indicates the total compensation for
CEOs in the 90th percentile5 was $183,805, $184,499, and $235,270
for 1998, 1999, and 2000, respectively.6 According to the ERI
data, Darle was compensated substantially above similarly
situated CEOs whose compensation was in the 90th percentile. On
5Ninetieth percentile means that only 10 percent of the
year’s data lies above this figure.
6The ERI date was based on calendar years, but the tax years
in issue were fiscal years ending on June 30.
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