Max Burton Enterprises, Inc. - Page 14

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          based on limited sales and low or negative return on equity in              
          the earlier years.  Each party presented expert testimony in                
          support of its positions on appropriate compensation levels.  We            
          are not bound by the opinion of any expert when the opinion is              
          contrary to our own judgment.  Bausch & Lomb, Inc. v.                       
          Commissioner, 92 T.C. 525, 597 (1989), affd. 933 F.2d 1084 (2d              
          Cir. 1991).  We may embrace or reject expert testimony, whichever           
          in our judgment is most appropriate.  Helvering v. National                 
          Grocery Co., 304 U.S. 282, 295 (1938).  Thus, we are not                    
          restricted to choosing the opinion of one expert over another but           
          may extract relevant findings from each in drawing on our own               
          conclusions.  Estate of Hall v. Commissioner, 92 T.C. 312, 338              
          (1989).  Here, the experts’ usefulness is primarily in the data             
          that they collected and analyzed rather than in their ultimately            
          subjective evaluations of petitioner’s officers.                            
               Respondent’s expert, E. James Brennan III (Brennan),                   
          determined “maximum” and “highest average” annual total                     
          compensation levels for each position.  He acknowledged that, in            
          comparison to other officers in similar businesses, petitioner’s            
          officers were undercompensated.  He concluded that Ms. Burton was           
          entitled to a high level of compensation and that during fiscal             
          years 1988 and 1989 Ms. Burton was paid approximately $67,000               
          below the average total compensation amounts paid to chief                  
          executive officers of bonus-paying companies of similar size.               

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