I have a situation where an employee performs separate and distinct services for two commonly controlled employers. Each employer sponsors a Defined Benefit plan. Employee is participant in each plan. Plans are tested on a controlled group basis. Employee is paid under two separate payrolls. Can the full § 401(a)(17) compensation limit be taken into account under each plan when determining employee's benefit, due to the fact there are separate payrolls? Any help would be greatly appreciated.

No. The common control rules were established to prevent what you describe.

401(a)(17) is not the issue, but 415 and discrimination under 401a4 are important.
If the lucky individual makes more than $220,000 in each group, then use it for each plan, since the compensation used in determining plan benefits reflects pay for that group. I know of no requirement to offset compensation limits because you received compensation in another group.

However, for a controlled group, remember you have a single 415 limit for all DB plans, and separately a single 415 limit for all DC plans.

You might have to aggregate the two plans for testing, so you would need the benefits of both plans added together to demonstrate 401a4 compliance.

On second thought I agree.