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Penalbas who requested that the pension plan be terminated,
because the employees desired control over how to invest the
proceeds. Although petitioner paid its employees other than the
Penalbas well, the divergence in their pay and the pay of the
Penalbas is striking. Petitioner's highest paid salesman earned
$337,182.59 in petitioner's fiscal year 1990, as compared to
$1,342,400 paid to Mr. Penalba. It should also be noted that
each of the Penalbas devoted some time to another corporation in
which they were stockholders and were compensated for that work
as employees.
Based on all of these factors, we conclude that, although
there has been no showing that the compensation allowed by
respondent for Mr. Penalba is not reasonable for Mr. Penalba's
normal duties as petitioner's CEO, Mr. Penalba, in addition, is
entitled to substantial compensation during the year at issue for
his development of the cotton/Lycra fabric that was largely
responsible for petitioner's increased sales in that year.
Respondent argues on brief that it is not appropriate to
determine a reasonable salary for Mr. Penalba's services to
petitioner by separately considering all the various "jobs" he
did and determining a reasonable amount for each. However, this
Court and other courts have in numerous cases considered the
reasonableness of compensation based on the fact that the
recipient performed more than one function for his employer, even
though it may not be the sum of the amounts which would be paid
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