Tag Archives: compensation

Reasonable Compensation

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One of the services we provide our small business clients is to insure that the payment of reasonable compensation.  No, I don’t mean what they pay their employees (although we do that, as well, when requested).  No, I am talking about the pay they take for themselves- the owners of the S Corporation or an LLC operating as an S corporation.

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First, do no harm?

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I’ve written that it is critical to examine one’s business environment often. To insure that what we are doing will make sense- and money- inf the future. Most of us lack lobbyists at our beck and call to insure our business is not overcome by those changes.

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Keep on Truckin? Nope, not any more…

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Many of you know I used to own a trucking corporation.  It was a captive- in other words, we used our authority (trucking registration) to haul our own products and raw materials.  We operated up and down the East and West Coasts, and radiated out to and from the Midwest.

Continue reading Keep on Truckin? Nope, not any more…

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CEO Compensation and Corporate Performance

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I have already discussed the issues with inflated CEO compensation. One primary cause driving compensation upward is that many firms employ a technique that insures that he (it is typically a he) gets salary increases regardless of the performance at the firm. I have also discussed the problem that executives are paid ridiculous multiples (not 10 to 50, but 250 to 500 times) of the average pay at their firms.

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The Law of Unintended Circumstances

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About 30 years ago, we were expanding our transportation company (which was related to our health care business) in California.   And, given our philosophy of looking for folks who needed a helping hand, we hired two folks whom we trained to become truck drivers for our firm. They both worked 20 hours a week to start.  Once they acquired enough hours to take the tractor-trailer license test (and passed), we began using them for 35 to 42 hours a week.  When, all of a sudden, one of the drivers announced he was quitting.

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The Myths of CEO compensation

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I have been having debates with my friends and colleagues for years over executive pay. You, too, have heard me rail that there is no financial or business reason to allow an executive to receive compensation of 100, 200, or 500 times the average pay of the corporation s/he leads. When I was growing up, executive compensation rarely exceeded 10 times the average pay. I realize I am old- but this inflation is not only ridiculous, it’s as dangerous as that obtaining in pre-World War II Germany!

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Really? Fareed Zakaria missed the boat.

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Fareed Zakaria published an op-ed in the Washington Post on Thanksgiving (literally and figuratively).  In it, he stated that we (Americans) should not be “enamored of Germany” for maintaining its industrial base through economic reforms.  Since, after all, we are in the “post-industrial, information economy”.

Continue reading Really? Fareed Zakaria missed the boat.

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Congress (and the IRS) is going after S Corporations and their owners

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Today, I am going to talk about taxes- but for the small business owner. Like it or not, taxes are going to go up- not for everyone, but small business is a ripe target. Part of the reason is that small business- just like big business- has found ways (or paid advisors to find ways) to pay the minimum amount of axes required.

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