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for a maximum bonus of $400,000. Petitioner paid Herold the
maximum bonus at a time when it appeared this target was met.
Later that year, merchandise returns reduced 1989 sales to
$13,265,000. At that level of sales, Herold was entitled to a
1989 bonus of $300,000 rather than $400,000. Herold never
reimbursed petitioner for the $100,000 excess bonus he had
received. In 1991, petitioner's sales volume increase was less
than the maximum targeted amount. Petitioner paid Herold a bonus
of just $100,000 rather than the $400,000 bonus he would have
received if sales had increased 80 percent or more.
5. Petitioner's Employees
For 1989 through 1993, petitioners' five most highly
compensated employees, their respective positions, their
respective total bonuses for the year, and their respective total
compensation for the year were as follows:
1989
Total
Employee Position Bonus Compensation
Stephan Herold President/CEO $427,000 $637,000
Greg Harris Vice president &
account executive 25,000 123,174
Greg Appelhoff Account executive 5,000 103,409
Dana Frederickson Account executive 2,500 83,042
Joe Berini Account executive 1,000 69,835
1990
Total
Employee Position Bonus Compensation
Stephan Herold President/CEO $430,000 $797,500
Dana Frederickson Account executive 3,000 144,769
Greg Harris Vice president &
account executive 30,000 140,930
Greg Appelhoff Account executive - 0 - 99,077
Scott Munson Account executive - 0 - 67,313
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