Max Burton Enterprises, Inc. - Page 16

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          petitioner’s employees could command such incentives in a                   
          business controlled by outside investors.  See Elliotts, Inc. v.            
          Commissioner, 716 F.2d at 1245.                                             
               Bean did not determine reasonable salaries for each of the             
          executives separately.  Using comparisons at the 75th percentile,           
          she concluded that petitioner “could have paid compensation to              
          its executive team for 1987 to 1990 in the amount of $1,411,700.”           
          We are not persuaded that the amounts should be aggregated in               
          this manner.  Rather, compensation to each officer should be                
          separately evaluated.  Bean’s “team” approach inappropriately               
          treats all three executives as performing above average services.           
               Upon consideration of all of the data in the experts’                  
          reports, the stipulated facts, and the testimony of petitioner’s            
          officers concerning the roles that they performed in petitioner’s           
          business, we conclude that Ms. Burton’s contributions were                  
          extraordinary but that those of Mr. Burton and Denovan were not.            
          Thus Ms. Burton’s compensation should take into account Brennan’s           
          “highest maximum” ($378,260) and Bean’s 90th percentile                     
          ($312,905) compensation to chief executive officers and add                 
          undercompensation acknowledged by Brennan for 2 years.  In                  
          addition to her role as chief executive officer, Ms. Burton                 
          shared with Denovan many duties of a sales executive and is                 
          entitled to a supplement for that role.  See Elliotts, Inc. v.              
          Commissioner, supra at 1245.                                                

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