In this issue
Many owners of family businesses approach retirement with conflicting priorities on thedisposition of their assets. They want to donate as much as possible to charity but worry thatcharitable giving will undercut another vital objective—leaving a comfortable inheritance for theirchildren.
Diane Montoya knew she had to sweeten her offer. Aschief executive of States Industries, a plywood maker in Eugene, Oregon, she had found a top candidateto become the firm's new vice president of finance. But a good salary and benefits wouldn't be enough.Other companies had expressed interest in Dave Lenington, too, and would be offering him stockoptions.
Montoya knew how difficult it was to find hired guns as skilled as Lenington. But like many owners offamily businesses, she would not spread shares beyond the family.
Over the past several years, shareholders of both publicly held companies and closely heldconcerns have experienced significant swings in the value of their holdings. While shareholders ofpublicly held companies have been able to measure the magnitude of these changes quite easily, theimpact on the value of closely held firms has been less clear.
Productivity and fairness are central themes in family business life. Productivity becausesomeone has to produce the goods and compete so the business can stay alive. Fairness because withoutit the social fabric of the family unit is ripped apart.
Questions of fairness are a pervasive concern at every stage of the family business drama and for eachmember of the cast. The parent asks: “How can I be fair with all my kids?” The overworked sisterlaments: “Is it fair for us siblings to be paid the same when we are clearly making differentcontributions?”