In this issue
After Hurricane Katrina destroyed their homes, 19 of Michelle and Kyle Davis's relatives fled New Orleans and joined them in Chester, Pa. None of them thought to bring a jug of water from the Mississippi River; the last thing they wanted to see was more water. But now that the extended family has opened a restaurant called De' Essence of New Orleans in Chester, that Mississippi water would come in handy.
“As far as the eye can see” is an oft-heard expression. Fact is, when it comes to predicting the future, the eye cannot see very far. Preparing for the unknown is a particularly pertinent issue in family businesses because, in addition to the normal disruptions that challenge all enterprises, there are often emotionally charged intrafamily dynamics at work. These usually center on who is going to run the business, how it should operate or whether it should it be sold.
The speed at which myriad changes have stormed through the economy in the last decade—in the areas of technology, financial and capital markets, global competition and more—is unparalleled in human history. So it should not be surprising that the life cycle of the corporation seems to have shortened. The 90 companies on the original Standard & Poor's Index of major U.S. companies, created in the 1920s, remained there for an average of 65 years. By 1998, the expected tenure on the larger S&P 500 list was a mere ten years, and in 2001-2002, 25% of Nasdaq companies were delisted.
The sibling who wants equal pay
I work with my sister. She has an advanced degree but has spent less time working in the corporation than I have. Our responsibilities are equal. I feel that even though she was hired for more money than I was, after 25-30 years we should make equal salaries. Is equal pay for family executives appropriate?