Compensation in family business is an emotionally laden matter. Heated discussions about this issue can easily stir up anxieties among the generations, giving rise to such questions as: Is compensation linked to responsibility level? Is compensation being used as a control mechanism?
Families who engage outside experts to help with diffusing tensions around compensation discover the importance of addressing the emotional issues. Professional advisors can calm a family’s concerns and help them make difficult business decisions through constructive dialogue about values, roles, and issues of accountability.
In the following three cases, families work through a variety of compensation issues:
Case 1: Compensation based on diverse levels of responsibility