There's no doubt about it.
For a family of owners to maintain peace of mind, it's important that all family members feel fairly treated in money matters.
Example:
The family's eldest daughter is the CEO and heir to her father, who is now Chairman of the Board.
The CEO's sisters, who are passive shareholders, sometimes discuss the older sister's salary:
How much does she get paid - and has the board, headed by their father, remembered what her salary means for the family's return?
The speculation is not about money. Nor is it basically about distrust. It stems from the sibling rivalry and desire for recognition that most families with children are familiar with.
The key difference is that the rivalry here can end up affecting a family's cohesion AND the management of their business.
So what is the solution?
Transparency.
If the younger sisters don't have insight into their older sister's salary, the board should give it to them for the sake of family peace and calmness on the management floor.
And if the older sister is paid a salary that is higher than the market level, the difference should be accounted for.
Contact me if you have challenges with payroll in your company.
