Today, family-owned businesses face new challenges when transferring ownership to children or other family members.
During the owner’s lifetime, appropriate successors must be groomed to take over. This process can take many years, and must be carefully thought out. And once that successor has been identified, steps should be taken to prevent him from becoming dissatisfied and leaving the company. Compensation to key people, including family members, must be kept attractive. But increasing compensation is not as simple as it sounds. You, as the majority stockholder, may want to maintain a substantial income, while reinvesting assets to continue growing the business. There might not be enough money for everyone to be totally satisfied.