Category Archives: Compensation Policy

Compensating Family Members – The Most Sensitive of Subjects

Compensation Policy

Honestly, are you truly worth what you are getting paid?

Family member compensation is a sensitive subject and can spark up conflict quicker than almost any other single issue in a family business. Family members tend to either be undercompensated or overcompensated, rarely are they in-line with the pay scale for their position in the outside market. Family businesses carry a stigma and false perception of over paying their family members. I have found it more often is the opposite and the majority of family members are compensated below the market salary for their position. How does this happen? More…

Going Outside – The Runaway Manager

Compensation Policy, Family Stories, Non-Family Employees, Outside Advisors • Tags: , , ,

“Before we knew it, we learned that we were having a Grand Opening for our new Manhattan retail store later that week. And we weren’t even a retailer“

To help with the growth our family business, our family hired a key non-family manager for the first time.  Attracting an outside manager into a family business is especially challenging with regards to compensation.  Like many closely-held firms, we weren’t willing to give up equity in the business, so we created a compensation package built around a performance bonus.  We selected an outside executive who came from a larger company, who brought proven expertise to grow our company rapidly. Coupled with their high ambition, it seemed like a good idea to tie their compensation into sales growth. More…