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1. Employee's Qualifications
An employee's superior qualifications for his or her
position with the business may justify high compensation. Home
Interiors & Gifts, Inc. v. Commissioner, 73 T.C. 1142, 1158
(1980). Eberl was highly qualified for his position with
petitioner. This factor favors petitioner.
2. Nature and Scope of Employee's Work
An employee's position, duties performed, hours worked, and
general importance to the success of the company may justify high
compensation. Rutter v. Commissioner, supra; 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); Mayson Manufacturing
Co. v. Commissioner, supra.
Eberl was responsible for the rapid growth in petitioner's
gross receipts. Gerald Underwood, a catastrophe operations
supervisor for State Farm during the years at issue, testified
that State Farm would not have hired petitioner to adjust claims
resulting from Hurricane Andrew if not for Eberl.
Eberl has at times performed or overseen virtually every
task for petitioner except accounting. He made virtually every
important business decision for petitioner before and during the
years at issue.
Respondent contends that it is common for a CEO to work long
hours, suggesting that Eberl's schedule was nothing out of the
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