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A. Role in the Company
The first factor focuses on the compensated employee's
importance to the success of the business. Pertinent
considerations include the employee's position, hours worked,
duties performed, and the general importance of the employee to
the company. American Foundry v. Commissioner, 536 F.2d 289,
291-292 (9th Cir. 1976), affg. in part and revg. in part 59 T.C.
231 (1972). Where a large salary increase is at issue (similar
to the instant case), it is further useful to compare past and
present duties and salary payments. Elliotts, Inc. v.
Commissioner, supra at 1245.
Mr. Martin was petitioner's key employee and the primary
reason for its success over the years. As president, he was the
driving force behind petitioner's success from its inception, and
his personal services were essential to that success. He managed
and built up petitioner's business, designed its physical plant
and layout, and trained other later members of its management
team.
Although he had delegated some administrative duties and
general business responsibilities to Mr. Crispe by the 1990
fiscal year in issue, Mr. Martin remained the driving force
behind petitioner. Further, while he was also devoting some time
and attention to Caribe in Puerto Rico, being petitioner's
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