IRS Reasonable Executive Compensation

This exercise is available to Assessor subscribers only.

Now it's your turn to solve a real-life problem!

If you have a subscription to ERI's Executive Compensation Assessor (XA), analyze the following problem:

Problem Statement

Davis Construction (eSic 1500) is owned and operated by Jill Davis the sole shareholder and CEO. The company is located in Boston Massachusetts and has annual revenues of $25 million.

Question

Jill wants to pay herself as much as possible, but she needs to avoid the possibility of an IRS constructive distribution determination. In which range should her compensation fall? Use today’s date for salary planning. (Use the Executive Compensation Assessor Survey & Proxy Analyses screen.)

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