Can owners compensation affect a company’s value?
Abstract: Owners of closely held companies have significant leeway when it comes to setting their own salaries and benefits. But how does that affect business value? Often, to obtain a more accurate valuation, it’s necessary to “normalize” owners compensation. This results in an objective, unbiased owners compensation amount, which, in turn, contributes to a more credible business value. This article discusses when it is or is not appropriate to normalize owners compensation, along with the challenge of determining market compensation for an individual owner.
Valuation & Litigation Briefing / Litigation & Valuation Report