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bonuses resulted in a bonus which apparently Mr. Schoenecker
considered too high in an uncommonly good year for BI, the
formula was changed to reduce the bonus base.
Since a reasonable salary is one that would be agreed to in
arm's-length negotiations, the amount paid for comparable work by
comparable companies is a very important factor in determining
reasonable compensation. In a competitive market for a CEO the
going salary paid by a comparable business to a CEO would set a
pattern for negotiations. Experts for each party testified in
the case and used various statistics to support the opinions
given. One of petitioner's experts, Mr. Locke, relied on
materials from the advertising industry, which even he admitted
were not representative of petitioner's business. We have set
forth the statistics Mr. Locke used, since the figures themselves
show that some of the companies were ten times the size of BI.
Also, the record shows the businesses were different from and
more complex than BI's business. The record is clear that the
advertising companies are not a good comparison to BI. However,
even the 75-percentile regression estimate of these advertising
companies, which was used in effect as an average, was except for
1 year less than $1 million for the CEO, and in the 1 year just
slightly over $1 million. In order to attempt to justify Mr.
Schoenecker's salary, petitioner's expert made adjustments to the
salaries paid to advertising executives for retirement and other
fringe benefits. In our view, the testimony of Mr. Locke, based
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