Tricon Metals & Services, Inc. - Page 16

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             have been on the duties that Ferguson actually performed, and                                        
             some weight should have been given to Ferguson's sales ability                                       
             and his skill in motivating petitioner's super salesmen.                                             
             3.  Character and Condition of Company                                                               
                    This category of factors requires us to focus on                                              
             petitioner's size as indicated by its sales, or capital value,                                       
             the complexities of the business, and the general economic                                           
             conditions.  Elliotts, Inc. v. Commissioner, 716 F.2d at 1246;                                       
             Pepsi-Cola Bottling Co. v. Commissioner, 528 F.2d 176, 179 (10th                                     
             Cir. 1975), affg. 61 T.C. 564 (1974).                                                                
                    Petitioner performed well in a competitive business.                                          
             Respondent's expert indicated that petitioner had done well in                                       
             terms of growth and profitability during the years in issue.                                         
             Indeed, Fuller indicated that petitioner's growth and                                                
             profitability numbers were better than the numbers produced by                                       
             the companies that Fuller considered comparable to petitioner.                                       
                    Courts also compare the compensation paid with the gross                                      
             profit and net income of the corporation.  Pepsi-Cola Bottling                                       
             Co. v. Commissioner, supra at 179.  Ferguson's compensation as a                                     
             percentage of gross profit (before deducting his compensation) is                                    
             approximately 10 percent, 13 percent, and 15 percent for the                                         
             fiscal years ending 1990, 1991, and 1992, respectively.                                              
             Ferguson's compensation as a percentage of net income (before                                        
             deducting his compensation) is approximately 29 percent, 36                                          
             percent, and 35 percent for the fiscal years ending 1990, 1991,                                      




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