Boardroom Tool

The Family Business Board Role in Executive Compensation Planning: An Illustrative Case

By NACD Staff


Compensation Family Board Family-Owned Company

In brief: Originally appearing in The Family Business Board Volume 2: Governance for Agility and Growth, this case study shows how a family business board can use a committee of independent directors and an outside consultant to resolve a family conflict over executive compensation.

This resource can help your board to

  • Set executive compensation at a family business

  • Resolve conflicts between family members at a family business

  • Hire independent consultants to develop an executive compensation philosophy

Most relevant audiences: directors on family business boards

This case shows how one board used a committee of independent directors and a consultant to resolve family conflict over executive compensation.


  • Family-owned $300 million manufacturing company

  • Two family members (brothers) were senior executives (CEO and COO) of the company and also board members.

  • Two family members (brothers—and cousins of the two senior executives) were on the board of Directors but not actively involved in management of the company.

  • Several other family members (cousins) held minority interests in the company but did not sit on the board.

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