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Respondent argues that we should not apply Jones' formula
because Chicago Title is not an independent escrow firm like
petitioner. We find no reason to believe that the compensation
structure for an escrow officer in an independent firm would be
significantly different from one used in a title insurance
company. In addition, respondent concedes that its experts'
compensation formulas for independent firms are similar to that
described by Jones.
Respondent called as its expert witnesses Dave Brooks and
Michael Haas, who collaborated on a report that provided five
formulas to determine Kleindienst's compensation. Dave Brooks
is president, chief executive officer, and majority shareholder
of a multibranch, independent escrow firm that generates an
average of $3 million in gross receipts. Michael Haas is an
accountant who performed accounting services for 42 independent
escrow firms during the years in issue. The five formulas are
based on their experience and represent compensation plans
common in the independent escrow industry. Each formula
assigned an arbitrary amount of $12,000 as compensation for
Kleindienst's duties as a corporate officer. The average
compensation from the five formulas was $300,000. Respondent
conceded this amount as reasonable compensation for Kleindienst.
While two formulas provided by respondent resemble Jones'
formula, we are not satisfied that respondent's proffered
formulas accurately reflect the value of Kleindienst's marketing
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