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remedy that undercompensation. As noted by respondent’s expert,
Mr. Myers and Mrs. Myers were extremely well compensated
commencing with petitioner’s 1993 fiscal year. We thus give
little weight to petitioner’s and Mr. Gelfond’s unsupported
contention that petitioner’s prior undercompensation of Mr. Myers
and Mrs. Myers still remained largely unremedied when the
deferred compensation agreements were entered into.21
We also reject Mr. Gelfond’s suggestion that Mr. Myers and
Mrs. Myers are entitled to the compensation that would be
provided to six full-time executives/employees serving as
petitioner’s chief executive officer, chief financial officer,
chief operating officer, bookkeeper, personnel manager, and
office manager. Although Mr. Myers and Mrs. Myers may have
performed some of the duties of six such executives/employees,
they did not perform work equal to the full-time services of six
such executives/employees.22
21Petitioner also asserts that the amounts it treated as
constructive dividends under its settlement with respondent for
its 1993 and 1994 fiscal years, still represented reasonable
compensation to Mr. Myers and Mrs. Myers for purposes of the
case. We draw no adverse inference from petitioner’s subsequent
treatment as dividends under that settlement of part of its 1993
and 1994 fiscal year compensation to Mr. Myers and Mrs. Myers.
See also Fed. R. Evid. 408.
22This Court and other courts in numerous reasonable
compensation cases have considered the employee-recipient’s
performance of more than one function for the employer but have
concluded that the recipient’s reasonable compensation should be
less than the sum of the amounts paid to full-time employees each
of whom occupied one such position. See, e.g., Labelgraphics,
(continued...)
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