Why Compensation for Family Members Should be at Market Value

Why Compensation for Family Members
Should be at Market Value

Family Ink
Summer 1996

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…

Layoff Wounds Persist for Family Businesses

Layoff Wounds Persist for Family Businesses

by Shirley Leung
Staff Reporter of The Wall Street Journal

This article is reprinted by permission from StartupJournal.com.

Raymond Covarrubias first sensed tough times coming in August 2000, when his business, which makes blueprints for construction projects, slacked off 30% from the year before.

There had to be layoffs at the family business. During solitary walks, Mr. Covarrubias considered several of his 12 employees, but he kept returning to his younger brother, who had been at the firm for 30 years. Bobby, the office manager, oversaw everything from billing to blueprinting. But with no wife, no kids and no mortgage to pay, Bobby could manage without a paycheck. More…