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Mr. Sokol's responsibilities were more limited than Mr.
Bennett's, but his compensation was also considerably less. Mr.
Sokol, nevertheless, performed a wide variety of activities which
contributed to the success of a very successful company. As
petitioner's vice president and treasurer, Mr. Sokol was
responsible for petitioner's bank relations, purchasing,
inventory, as well as sourcing the products (i.e., finding and
hiring the manufacturers, then verifying the quality). As part
of his sourcing responsibilities, Mr. Sokol inspected the
operations of 25 to 50 different manufacturers in order to
determine their manufacturing capabilities.
Messrs. Bennett and Sokol worked long hours for petitioner.
Both worked weekends and week nights in addition to the 40-hour
workweek. They often worked together afterhours at Mr. Sokol's
home. They performed all petitioner's executive and managerial
functions and performed or oversaw virtually all its day-to-day
activities. Petitioner's growth and prosperity were due directly
to their skills, dedication, and creativity.
Courts have also considered whether an employee personally
guaranteed his or her employer's debt in determining whether the
employee's compensation is reasonable. In certain situations, an
employee's personal guaranty of his or her employer's debt may
entitle the employer to pay a greater salary to the employee than
the employer would otherwise have paid. See Owensby & Kritikos,
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