Why Compensation for Family Members
Should be at Market Value
by Bernard J. D’Avella, Jr., Esq.
One of the greatest struggles of operating a family business is separating the family from the business.Oh yes, there are many great benefits to having family in the business and to being a family member in a family business, but the most difficult problems result when “family values” and issues take over, leaving business values and needs wanting.There is no greater source for family business problems–nor more fertile ground for their cure–than the family business compensation system.
Starting with the premise that family members’ compensation should be a market value, let us look at the various considerations–often conflicting–in a family business, which will in turn demonstrate that this premise is correct. More…