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Petitioners’ expert, Dr. Keith R. Ugone (Ugone), performed
an analysis that focused on determining an amount of total
compensation that was reasonable for the services that Rose
performed for PK Ventures and its subsidiaries during 1987
through 1993. In so doing, Ugone assumed that a deferred
compensation agreement existed between Rose and PK Ventures and
its subsidiaries during those years. As discussed above, that
assumption was unwarranted. As part of this analysis, however,
Ugone determined amounts of “reasonable compensation based upon
market data” for the services that Rose performed for PK Ventures
and its subsidiaries during 1992 and 1993.
In determining the amounts of “reasonable compensation based
upon market data”, Ugone identified public companies that were
similarly situated to PK Ventures during those years. Ugone
identified 10 companies for purposes of his analysis for 1992 and
1993. Ugone also considered data published in several different
executive compensation surveys in his analysis. Based upon the
entirety of his analysis, Ugone concluded that reasonable
compensation amounts for the services that Rose performed for
PK Ventures and its subsidiaries during 1992 and 1993 were
$360,067 and $366,391, respectively.
Respondent’s expert, Paul R. Dorf (Dorf), identified a “peer
group” of public companies that were similarly situated to
PK Ventures and whose top executives performed duties similar to
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