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Does your family business have a fair compensation program?

4/28/2015

Compensation. Fairness. Can the two coexist as peaceful siblings in a family business?

Pay day sticker

Given the potential for conflicts between employees, whether they’re related or not, you may be tempted to believe the answer is no. Yet, to prosper, your business needs to attract and retain qualified workers – both family and nonfamily.

A formal compensation system may be the solution. An objective plan can enhance performance, eliminate perceived unfairness and burnish the professional image of your business.

Here are tips for developing a formal compensation plan:

Creating or changing a compensation system in a family business may involve income and estate tax considerations, as well as noncash factors such as family dynamics. Your CPA can help you design a solution tailored to your business that’s affordable, practical and equitable.

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