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PKV&S should be limited to deducting the reasonable compensation
amounts determined by Ugone for 1992 and 1993. We consider these
contentions below.
We agree with petitioners that a number of factors must be
considered when deciding whether compensation is reasonable in
situations such as the one presented here. With respect to the
factors cited by petitioners, our review of both experts’ reports
leads us to the conclusion that they considered many of these
factors as well as others in making their determinations as to
reasonable compensation amounts for 1992 and 1993. In
particular, we note the following excerpt from Dorf’s report:
In gathering relevant company data, identifying market
data, conducting our analyses, and ultimately rendering
our expert opinion, we considered the following issues:
1. What were Mr. Rose’s qualifications?
2. What were Mr. Rose’s duties and
responsibilities at PKV?
3. What was the financial performance of PKV
during the period 1987 through 1991?
4. What was Mr. Rose’s compensation during the
period 1987 through 1993?
5. How was Mr. Rose’s compensation determined?
6. What was the market value of Mr. Rose’s
position during 1987 through 1993?
7. How did Mr. Rose’s compensation compare to the
market value of similar position(s)?
8. Was there a deferred compensation plan in
place at PKV?
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