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energy. See Home Interiors & Gifts, Inc. v. Commissioner, supra
at 1158; Dave Fischbein Manufacturing Co. v. Commissioner, supra.
2. Nature, Extent, and Scope of the Employee's Work
An employee's position, hours worked, duties performed, and
general importance to the success of a business may justify high
compensation. Home Interiors & Gifts, Inc. v. Commissioner,
supra at 1158. In this case, the history of Messrs. Bennett's
and Sokol's contributions to petitioner must be considered,
rather than just their contributions during the years in issue,
because the compensation petitioner paid to them during the years
in issue represents, in part, an attempt to rectify prior
undercompensation.
Mr. Bennett was petitioner's key employee and the main
reason for its success. As president, he was the driving force
behind petitioner's business from its inception. Mr. Bennett was
responsible for the designing and selection of the clothes
petitioner sold. He was also responsible for the design and
creation of petitioner's catalog--its sole method of advertising.
Mr. Bennett ensured that the catalog was photographed, assembled,
printed, and mailed to his specifications. He also oversaw in-
house store order operations, forecasting demand, developing a
customer base, overseeing facilities construction, and working
with banks to ensure financial stability for petitioner.
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