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10. Prevailing Rates of Compensation for Comparable
Positions in Comparable Companies
In deciding whether pay is reasonable, we compare it to
compensation paid to persons holding comparable positions in
comparable companies. Rutter v. Commissioner, 853 F.2d at 1271;
Mayson Manufacturing Co. v. Commissioner, supra at 119.
Neither respondent's expert, Carey, nor petitioner's expert,
Williams, had data from businesses that are similar to petitioner
or executives whose performance was shown to be similar to
Eberl's. Pulsar Components Intl., Inc. v. Commissioner, supra
(Court not persuaded by expert testimony that did not compare
prevailing rates of compensation for comparable positions in
comparable companies); Mad Auto Wrecking, Inc. v. Commissioner,
T.C. Memo. 1995-153 (same).
Respondent contends that petitioner could have hired someone
to perform all of Eberl's services for $500,000 per year.
Respondent's contention is speculative.
This factor is neutral because neither respondent's nor
petitioner's experts had persuasive comparative pay data.
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