{"id":15307,"date":"2025-09-24T16:36:57","date_gmt":"2025-09-24T23:36:57","guid":{"rendered":"https:\/\/familyenterpriseusa.com\/?p=15307"},"modified":"2025-09-24T16:37:04","modified_gmt":"2025-09-24T23:37:04","slug":"compensation-how-are-you-leveraging-this-critical-tool","status":"publish","type":"post","link":"https:\/\/familyenterpriseusa.com\/feusa\/compensation-how-are-you-leveraging-this-critical-tool\/","title":{"rendered":"Compensation: How are You Leveraging this Critical Tool?"},"content":{"rendered":"

[et_pb_section fb_built=”1″ _builder_version=”4.16″ custom_padding=”22px|||||” global_colors_info=”{}”][et_pb_row admin_label=”CTA” _builder_version=”4.16″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” collapsed=”on” global_colors_info=”{}”][et_pb_column type=”4_4″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_divider color=”#397389″ divider_weight=”2px” _builder_version=”4.19.4″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_divider][et_pb_cta title=”The data is in! See what family owned businesses are saying about today\u2019s challenges and opportunities.” button_url=”https:\/\/familyenterpriseusa.com\/family-business-survey\/” button_text=”Read the 2025 Annual Survey Executive Survey now! Click here.” disabled_on=”off|off|off” admin_label=”Call To Action Top” _builder_version=”4.27.4″ _module_preset=”default” header_font_size=”22px” background_color=”#397389″ custom_button=”on” button_bg_color=”#ff0019″ custom_margin=”-17px|||||” custom_padding=”16px||19px|||” global_module=”9695″ saved_tabs=”all” global_colors_info=”{}”][\/et_pb_cta][et_pb_divider color=”#397389″ divider_weight=”2px” _builder_version=”4.19.4″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_divider][\/et_pb_column][\/et_pb_row][et_pb_row column_structure=”1_5,3_5,1_5″ admin_label=”Author Byline” _builder_version=”4.24.3″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” link_option_url=”https:\/\/www.brownandstreza.com\/davidkeligian” link_option_url_new_window=”on” collapsed=”on” global_colors_info=”{}”][et_pb_column type=”1_5″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_image src=”https:\/\/familyenterpriseusa.com\/wp-content\/uploads\/2023\/08\/Linda-Mack-B4JqGXSA5A_thumb_9.jpg” alt=”Linda Mack” title_text=”Linda Mack” _builder_version=”4.27.4″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_image][\/et_pb_column][et_pb_column type=”3_5″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text admin_label=”Author” _builder_version=”4.27.4″ text_font=”||||||||” text_font_size=”16px” background_size=”initial” background_position=”top_left” background_repeat=”repeat” global_colors_info=”{}”]<\/p>\n

By\u00a0<\/strong>Linda C. Mack<\/strong><\/a>
Founder and President
Mack International<\/p>\n

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A host of macroeconomic factors and geopolitical shifts have prompted family offices to become more institutionalized. Family offices are increasingly adopting robust governance structures, strategic human capital plans, family vision, values, and mission alignment programs to keep the family thriving for generations.<\/strong><\/h2>\n

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This elevated level of sophistication encompasses compensation. Family Offices are recognizing the power of a thoughtfully devised compensation plan as a tool to drive behavior and incentivize excellence. The strategic use of long-term incentive (LTI) plans, among others ensure effective governance and engender cultures of continuous improvement.<\/strong><\/em><\/h3>\n

 <\/p>\n

The modern family office platform<\/strong><\/p>\n

Once considered a cost center to be managed, the modern family office platform offers an attractive career proposition and competes with elite private equity firms and Wall Street for talent. Family offices provide incredibly dynamic trajectories and creative compensation structures, typically comprising a base salary, formulaic bonus structure, and long-term incentive plan, often outpacing the general market in terms of upside potential.<\/p>\n

LTIs are increasingly being adopted by family offices and applied beyond the C-suite to a host of critical roles on the operational and administrative side of the ecosystem. The three most prevalent plans used in the market today are supplemental deferred cash, co-investment opportunities, and carried interest, although the scope of plans being used in the market may also include profit sharing, phantom equity, and stock options. These plans allow family offices to drive performance behavior in alignment with their objectives over a long-term time horizon, and top talent to participate\u00a0pari-passu<\/em>\u00a0in investments, generating their own portfolio of long-term wealth.<\/p>\n

Aligning interests and driving behavior<\/strong><\/p>\n

Compensation is not just a staff incentive tool but a strategic organizational governance mechanism that ensures longevity and continued excellence\u2014it can drive desired behaviors in stakeholders by being tied to relevant benchmarks as well as less tangible metrics such as values-based decision-making and guiding the next generation.<\/p>\n

To be successful, these compensation plans must align with the compensation philosophy of the family and the individual. This requires an assessment of the individual\u2019s current and expected compensation structure and time horizon parameters, and an evaluation of how their experience and expectations align with what the family office deems appropriate. What are the professionals\u2019 expectations? What will incentivize long-term performance and encourage decisions to be taken in alignment with family objectives?<\/p>\n

Interpreting benchmark reports<\/strong><\/p>\n

Several benchmark reports are now available in the market, making family office compensation data broadly accessible. However, many of these quantitative reports require additional apples-to-apples comparative information to appropriately interpret and evaluate the data to make informed decisions. This includes the scope and complexity of job content, decision-making, and responsibility. Best practice is to engage expert advice when devising compensation strategies and plans.<\/p>\n

The heightened focus on professionalism, business sophistication, and alternative investments has increased the demand for experienced, technically skilled, and culturally aligned family office professionals, and spurred talent migration from the institutional to the private family office market. This, in turn, has driven the upsurge in incentive compensation packages, including the adoption of LTIs and the incorporation of well-defined performance metrics in the structure of such plans.<\/p>\n

Compensation is one of the most important tools in the family office toolkit. It is imperative that you have confidence that you are utilizing yours effectively to attract and retain the best talent.<\/p>\n

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About Mack International LLC<\/strong>
Mack International is the premier boutique retained executive search and strategic management\/human capital consulting firm serving national and international clients in the family office, family business enterprise and the wealth management industries on a national and international basis. Founded in 2002, the firm has achieved an exceptional track record of success as evidenced by its unmatched industry expertise, in-depth market knowledge and unparalleled track record of success. Founder and President, Linda C. Mack has established proprietary methodologies such as the Mack 360\u00a9 and is credited for having coined the term \u201cexpert generalist\u201d in the industry.
<\/em><\/p>\n

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We hope you’ve enjoyed this article. While you’re here, we have a small favor to ask…<\/em><\/h4>\n

As we prepare for what promises to be a pivotal year for America, we’re asking you to consider becoming a member.<\/p>\n

The need for fact-based reporting of issues important to family owned businesses<\/a> and protecting a lifetime of savings<\/a> has never been greater. Now more than ever, successful families<\/a> and family owned businesses<\/a> are under fire. That’s why Family Enterprise USA<\/a> is passionately working to increase the awareness of issues important to family owned businesses<\/a> built on hard work, while continuing to strengthen our presence on Capitol Hill. The issues we fight for or against with Congress in Washington DC include high income tax rates<\/a>, possible elimination of valuation discounts, increase in capital gains tax<\/a>, enactment of a wealth tax<\/a>, and the continued burden of the gift tax<\/a>, estate tax<\/a> and generation skipping tax<\/a>.<\/p>\n

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Family Enterprise USA<\/a> promotes generationally<\/a> owned family business<\/a> creation, growth, viability, and sustainability by advocating for family businesses<\/a> and their lifetime of savings with Congress<\/a> in Washington DC.\u00a0 Since 2007, Family Enterprise USA<\/a> has represented and celebrated\u00a0all sizes, professions and industries of family-owned enterprises and multi-generational<\/a> employers. It is a bi-partisan 501.c3 organization.\u00a0Family foundations can donate.<\/a><\/p>\n

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#incometax #CapitalGainsTax #R&DExpensing #DontPunishSuccess #GrantorTrusts #StepUpinBasis #likeKindExchanges #AcceleratedDepreciation #EstateTax #Deathtax #wealthtax #taxLegislation #CongressionalCaucus #incometaxrates #repealestatetax #AdvocatingForFamilyBusinesses #FamilyOwnedBusiness #WomenOwnedBusiness @FamilyEnterpriseUSA #FamilyEnterpriseUSA<\/p>\n

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By\u00a0Linda C. MackFounder and PresidentMack InternationalA host of macroeconomic factors and geopolitical shifts have prompted family offices to become more institutionalized. Family offices are increasingly adopting robust governance structures, strategic human capital plans, family vision, values, and mission alignment programs to keep the family thriving for generations.   This elevated level of sophistication encompasses compensation. […]<\/p>\n","protected":false},"author":2,"featured_media":15308,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","content-type":"","footnotes":""},"categories":[48,3,92],"tags":[],"class_list":["post-15307","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-family-businesses","category-feusa","category-multi-generational-business"],"acf":[],"_links":{"self":[{"href":"https:\/\/familyenterpriseusa.com\/index.php?rest_route=\/wp\/v2\/posts\/15307","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/familyenterpriseusa.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/familyenterpriseusa.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/familyenterpriseusa.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/familyenterpriseusa.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=15307"}],"version-history":[{"count":4,"href":"https:\/\/familyenterpriseusa.com\/index.php?rest_route=\/wp\/v2\/posts\/15307\/revisions"}],"predecessor-version":[{"id":15318,"href":"https:\/\/familyenterpriseusa.com\/index.php?rest_route=\/wp\/v2\/posts\/15307\/revisions\/15318"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/familyenterpriseusa.com\/index.php?rest_route=\/wp\/v2\/media\/15308"}],"wp:attachment":[{"href":"https:\/\/familyenterpriseusa.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=15307"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/familyenterpriseusa.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=15307"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/familyenterpriseusa.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=15307"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}