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D. Compensation Practices
1. General
Petitioner did not maintain a written salary policy or bonus
plan for its employees. To attract “top-notch” people it paid
compensation that was equivalent to or greater than the
compensation paid by other mobile home retailers. Since its
incorporation, petitioner has paid all the cost of health
insurance for all its employees. It has also provided paid sick
and vacation leave for all its employees, except Jack (and,
presumably, Mary). Although petitioner established a profit-
sharing plan with Commercial National Bank in January of 1985,
the plan was terminated in late 1987. In addition, petitioner’s
resolution on February 5, 1996, to adopt a 401(k) retirement plan
was aborted on February 7, 1997, because of excessive
administrative costs.
Table 2 sets forth the compensation petitioner paid to its
key employees, other than Jack, for 1994, 1995, and 1996.
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Last modified: May 25, 2011