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industry. See Miller Box, Inc. v. United States, 488 F.2d 695,
705 (5th Cir. 1974). Indeed, the record supports the finding
that sales remained Ferguson's focus during the years in issue.
Ferguson's customer contacts and his familiarity with the
steel industry made him a valuable salesman and sales manager.
Ferguson traveled, met with clients, and supervised 10 of
petitioner's super salesmen. Although the salesmen that Ferguson
supervised could contact him in the evenings, as well as on
weekends, petitioner presented no evidence that Ferguson worked
an inordinate number of hours.
2. External Comparison
We also compare the employee's salary with the salaries paid
by similar companies for similar services. Sec. 1.162-7(b)(3),
Income Tax Regs. Both parties offered expert testimony as to
what a like company would pay for like services. Both experts
considered surveys of financial data on numerous companies.
A. Petitioner's Expert
Petitioner presented the testimony of James M. Otto (Otto).
Otto compared the compensation paid to the chief executive
officers of 12 publicly traded companies to the salary and bonus
paid to Ferguson. Otto did not include Ferguson's commissions
from sales when determining the reasonableness of Ferguson's
compensation as CEO. Otto reasoned that since Ferguson was paid
sales commissions on the same commission structure as
petitioner's other salesmen and since Ferguson's duties as
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