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competency and value to the company of a CEO. It is the
accomplishments of the executive and not necessarily the hours
worked, although the working of long hours is to be considered.
Again, petitioner cites the responsibility for BI's success and
"irreplaceability" of Mr. Schoenecker. While Mr. Schoenecker
would certainly be a great loss to the company were he not there,
it is fairly clear from this record that there are other
competent officers of BI, such as Mr. Shaw and, during the latter
years here in issue, Mr. Schoenecker's son Larry was taking more
responsibility for the business. However, the fact that there
are other competent officers employed by BI does not detract from
the fact that Mr. Schoenecker is a very competent CEO.
Petitioner points out that the growth, profitability, and
financial condition of the business are important in determining
whether compensation paid to an employee is reasonable. Home
Interiors & Gifts, Inc. v. Commissioner, 73 T.C. 1142, 1157-1158
(1980). The record here shows that BI has grown substantially
since its incorporation in 1950. Certainly that growth is to an
appreciable extent due to the work of Mr. Schoenecker. However,
unlike the situation in Home Interiors & Gifts, Inc. v.
Commissioner, supra, the growth of BI was in line with that of
BI's competitors.
Petitioner contends that an unrelated investor would be
satisfied with the return on his investment in BI from the income
of BI after the payment of Mr. Schoenecker's salary. Respondent
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