How can family businesses best address escalating tensions over compensation issues?

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

Case 2: Equal salaries for unequal work

Case 3: Fair and reasonable compensation vs. self-sacrifice

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