Replacement compensation Q&A — Why these valuations pose challenges for experts

Description

Abstract: Owner replacement compensation refers to the amount an unrelated person would be paid for performing the same duties that an owner performs at the subject company. Estimating replacement compensation is especially challenging when owners receive noncash perks, such as stock or stock options. This article looks at some common questions — and answers — about how valuators estimate replacement compensation. Hubbard v. Phil’s BBQ of Point Loma Inc., Case No. 09CV0735-LAB (NLS), 2012 U.S. Dist. LEXIS 41884, March 27, 2012.