Court Opinion

ID: 9709735
Source: CourtListenerOpinion
Date Created: 2023-08-26 03:53:47.742536+00
Date Added: 2024-06-11T18:22:51.157727
License: Public Domain

HUTCHINSON, Justice,
concurring.
I agree with the majority that, as a general rule, salaries and pension contributions which are not excessive are legitimate business expenses and that the terms of the will executed by appellee’s father do not require us to apply a different rule in this case. Therefore, I further agree that the Chancellor should have excluded any reasonable compensation paid to the Cohen brothers in the form of salaries and fringe benefits in calculating the profits realized by American Lamp Corporation and Atlantic Industries, Inc. from 1963 through 1979.
In determining whether the compensation paid to the brothers, as officers of the corporation, was reasonable, the Chancellor, on remand, must consider Benjamin Cohen’s wish to provide for appellee’s future support by directing, in his will, that she share in the profits of the family business.
Our Court has never decided which party has the burden of proof on the question of reasonableness of compensation *498paid to corporate officers and directors. Bermann v. Meth, 436 Pa. 88, 90, 258 A.2d 521, 522 (1969). On the facts in the instant case, I would require the appellants to prove that the salaries and fringe benefits received by them during the sixteen-year period in question were not excessive. Placing the burden of proof on the appellants would simplify the Chancellor’s task of effectuating the testamentary intent of appellee’s father that appellee share, in a meaningful way, in the corporate profits.
In all other respects, I join the majority opinion.