IS THE FAMILY EARNING TOO MUCH?
This is a relevant issue for many family businesses.
Imagine that the CEO, who is NOT a member of the owner family, receives a market-level salary.
Now imagine that the sales manager is the cousin of the company's main shareholder, and that the CEO believes that the sales manager is receiving a salary well above market level at the expense of the company's profits.
If the director senses that the sales manager is being favored on the basis of his family connections, this could become a serious problem for the director's motivation.
At the same time, the informal power relations in the family business can make it difficult for the CEO to express his dissatisfaction.
So what is the solution?
The remuneration conditions for employees who are members of the owner family should be discussed and handled proactively by the board of directors and executive management.
All employees should be remunerated according to transparent criteria, and the board of directors and executive management should ensure that everyone associated with the company is familiar with the remuneration structure.
Furthermore, the board of directors and shareholders should, as a starting point, have special insight into the salaries paid to employees with family ties to the owner family.
This ensures a degree of control.
How does your company ensure that remuneration is transparent and fair?
