Executive compensation is one of the most important decisions family-owned companies make. Compensation plans play an essential role in attracting and retaining the best talent to run the business. To evaluate family business pay practices, Compensation Advisory Partners (CAP), an independent executive compensation consulting firm, and MLR Media launched the Family Business Executive Compensation Survey last year.Â
To demonstrate how companies can apply the survey results, we present a hypothetical case study of ACME Holding Company and Jane Smith, the companyâs chief executive officer and a third-generation shareholder of the family business. Smith and ACMEâs compensation committee are in the process of determining the appropriate pay levels and mix between base salary and incentives for the companyâs executives.