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instance, petitioner has survived the crisis by dint of Herold's
efforts. Petitioner's profitability, which rests upon its sales,
upon key relationships Herold has painstakingly cultivated, and
upon Herold's ambition, inventiveness, and energy (as opposed to
petitioner's investment in capital) are the primary reasons for
petitioner's sales, growth, and success. See Home Interiors &
Gifts, Inc. v. Commissioner, supra at 1158; Dave Fischbein
Manufacturing Co. v. Commissioner, supra at 352-353.
2. Nature, Extent, and Scope of Employee's Work
An employee's position, hours worked, duties performed, and
general importance to the success of a business may justify high
compensation. Home Interiors & Gifts, Inc. v. Commissioner,
supra at 1158.
Herold is a micromanager who oversees all of petitioner's
executive and managerial functions. He performs or oversees
virtually all of its sales activities. He supervises its daily
operations, including supervising and directing its employees,
and makes every key business decision. Given the vital role
Herold plays in petitioner's operations and success, and the long
hours that he dedicates thereto, we view Herold as indispensable
to petitioner's business. Petitioner's growth and prosperity are
due directly to his skills, dedication, and creativity. See
Kennedy v. Commissioner, 671 F.2d 167, 176 (6th Cir. 1982), revg.
72 T.C. 793 (1979); Home Interiors & Gifts, Inc. v. Commissioner,
supra at 1158; Dave Fischbein Manufacturing Co. v. Commissioner,
supra at 352-353.
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