McKesson 2005 Annual Report Download - page 176
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McKESSON CORPORATION
EXECUTIVE SURVIVOR BENEFITS PLAN
Appendix I
This Appendix illustrates the calculation of benefits under Section D.1 of the Plan.
A. Assumptions
Executive is subject to California Income Tax.
Executive’s Annual Base Salary: $350,000
B. Survivor Benefit on Death Before Approved Retirement
12
Top Marginal Rate of Tax:
Top Federal Rate: 28.0%
Top California Rate: 10.0%
“Top Marginal Rate of Tax”:
.10 + [(1.0 - .10) x .28] = 35.2%
“Tax Factor”:
1/(1 - .352) = 1.543
Lesser of (a) $2,000,000 or (b) (3 x $350,000)
multiplied by
Tax Factor
equals
$1,050,000 x 1.543,
which yields a benefit of:
$1,620,150