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Ferguson in the amounts of $550,000, $600,000, and $750,000 for
the fiscal years ending 1990, 1991, and 1992, respectively.
Many factors are relevant in determining the reasonableness
of compensation, and no single factor is decisive. Charles
Schneider & Co. v. Commissioner, supra at 152; Mayson
Manufacturing Co. v. Commissioner, 178 F.2d 115, 119 (6th Cir.
1949), revg. a Memorandum Opinion of this Court. The courts have
used numerous factors to determine what constitutes reasonable
compensation. We address those factors below.
1. Roles in Company
The first category of factors concerns the employee's role
in the company. Relevant considerations include Ferguson's
qualifications, hours worked, and duties performed, as well as
his general importance to petitioner's success. American Foundry
v. Commissioner, 536 F.2d 289, 292-293 (9th Cir. 1976), affg. in
part and revg. in part 59 T.C. 231 (1972).
Ferguson served as petitioner's CEO and as a salesman. As
CEO, Ferguson selected the site for petitioner's operations in
the Western United States, and he also oversaw petitioner's
international sales. There is no evidence, however, that
petitioner's international operations were profitable.
Ferguson supervised three vice presidents that assisted in
petitioner's operations. Petitioner has not shown that it
engaged in highly technical or complex operations or that
Ferguson possessed managerial skills unique to petitioner's
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