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the basis of this data, Darle’s experience, and petitioner’s
strong profitability before taxes and shareholder-employee
compensation, Mr. Herber estimated a high and low total
compensation range.
At first glance, the ERI data from SIC 1742 appears relevant
because it is based on the proper SIC and is limited to
businesses in the Fargo, North Dakota, area, and it accounts for
petitioner’s size as measured by revenues. However, the ERI data
does not take into account the number of hours the similarly
situated CEOs worked or the duties they performed. Darle was
solely responsible for determining the amount petitioner would
bid on each job. However, the ERI data does not indicate that
the CEOs in similar companies also had this responsibility. In
addition, Darle performed many tasks that may not be
traditionally performed by a CEO. The ERI materials included in
the record fail to indicate whether other CEOs performed similar
tasks. The ERI data also does not state the business model of
the corporations included in its data. It is plausible that CEOs
working under different business models may expect to be
compensated differently. Considering these facts, we place
little weight on these materials and are unwilling to conclude
that the ERI data is sufficient for us to find that Darle’s
compensation was unreasonable.
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