Category

Shareholder Engagement

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June 10, 2025 Planning & Strategy

The Quest for Shareholder Alignment

At their best, multi-generation family businesses foster superior outcomes for shareholders, employees, customers, suppliers, and the communities in which they operate. Those are powerful incentives for maintaining family control of businesses across generations and through decades. Yet this remains the exception rather than the rule. Why? Enterprising family businesses that don’t have shareholder alignment around key issues cannot expect to last.

In this week’s post, we identify three principal financial questions around which shareholder alignment is essential for enterprising families.

May 27, 2025 Special Topics

Video: Corporate Finance in 30 Minutes

Last week, we released our newest booklet, “Corporate Finance in 30 Minutes: A Guide for Family Business Directors and Shareholders.” Whether you read the digital copy, requested a physical booklet, or haven’t gotten a chance to look at it yet, here is a short video where Travis Harms discusses those three fundamental corporate finance questions that help family business shareholders understand the basics of corporate finance and ultimately result in more engaged and valuable shareholders.

May 13, 2025 Special Topics

Understanding Family Ownership Roles

Family businesses are uniquely positioned to leverage the skills, goals, and offerings of their family owners. Some family owners may have different priorities, like creating a legacy, maximizing their return, or simply building a career. As a family business director, knowing these different goals and the types of owners that make up the family business shareholder group is key, and engages and enables the owners who may want to expand their role and contribution.

April 22, 2025 Planning & Strategy

Next Gen Up

The transition to the next generation has been one of the main impediments to family businesses trying to establish a multigenerational enterprise. For many family businesses, this transition can be rocky (and often unsuccessful) due to the next generation’s lack of exposure to the business and last-minute succession planning. As more members of the next generation express interest in the family business, proactive succession planning and next generation engagement will be more important than ever to keep them involved and prepare them for the transition to come.

April 7, 2025 Planning & Strategy Special Topics

The Patience to Prevail, Revisited

This week kicks off a time of economic uncertainty, with global financial markets in turmoil stemming from proposed retaliatory tariffs by the United States on effectively the rest of the world. Simultaneously, golf’s first major of 2025, the Masters, is poised to begin at Augusta National. While the Masters presents a radically different set of challenges from those presented in the Open Championship, the underlying themes and skillsets required to prevail remain the same and are just as applicable to family businesses facing challenges in times of uncertainty. With that in mind, we turn to some key thoughts for family business owners and directors to consider during these tumultuous days.    

October 16, 2024 Planning & Strategy

The Boar’s Head Family: Why Worry About Succession Planning?

Since 1905, Boar’s Head has built a multigenerational family enterprise selling deli meats, cheeses, and other delicious sundries. In the last several decades, the company has publicly handled various product contamination and recall situations while simultaneously dealing with internal ownership conflicts and legal battles behind closed doors. It is hard to imagine the founders of Boar’s Head envisioned this sort of conflict-ridden path for their family business. While avoiding shareholder conflict is never guaranteed, family business directors can add an additional layer of protection to their family legacy and long-term wealth through focused succession planning. In this week’s post, we address a few things to consider when developing your family business succession plan.  

October 2, 2024

Communication Matters for Family Businesses

Communication determines the success of any relationship, and the relationships among shareholders of multi-generation family businesses are no exception. As the business and family grow, shareholder relationships become more complicated, and formal communication becomes more important. While families nearing a generational transfer have some very specific challenges, effective communication is essential regardless of where the family business is in the corporate life cycle. 

July 1, 2024 Capital Budgeting Capital Structure Planning & Strategy

The Supreme Court Weighs in on Shareholder Redemptions

Earlier this year, we wrote about the Connelly case heading to the Supreme Court for final adjudication. The Court handed down its ruling in June, siding with the IRS in a unanimous decision. While the Supreme Court’s economic reasoning in its Connelly decision is impeccable, the need to redeem shares to fund eventual estate tax obligations of significant shareholders can disrupt, or at least complicate, the best-laid plans of growing family businesses. The Supreme Court’s Connelly decision is a timely reminder that family businesses and their shareholders need to work together to prepare for possible redemptions.

April 9, 2024 Performance Measurement Planning & Strategy

The Green Jacket Guide to Family Business Surveys

What Can We Learn from the Masters?

It is that time of year. The azaleas are blooming at Augusta National Golf Club and nearly one hundred golfers are gearing up for their shot at a green jacket in the 88th Masters Tournament.

What the Masters has developed in terms of interest and legacy lies in the unique traditions as well as the initiatives taken on by the Masters Tournament Foundation. The Masters Tournament Foundation’s primary purpose is to support, develop, and globally expand the game of golf through clear messaging, marketing, and communications across generations of golfers. Their commitment to creating a more accessible and welcoming golf community is critical to the longevity of the sport itself.

There is no tournament in all of sports more desirable to attend than the Masters. From the iconic pimento cheese sandwich and Azalea cocktail to the 9-hole Wednesday Par-3 tournament, it is truly one-of-a-kind. Similarly, family businesses are unique with traditions of their own that drive shareholder engagement. A shareholder base that is involved and passionate is a critical factor in building a sustainable and prosperous family business. But as family business directors know…

December 11, 2023

Talking Money with the Next Gen

A recent Wall Street Journal article on the relationship between younger adults and traditional financial institutions is potentially illuminating for family business leaders.  Millennial and Gen Z attitudes toward money and financial institutions suggest that family businesses would be well-served to re-think their traditional financial communication strategies, adapting communication styles to engage next-gen family members effectively and explore innovative approaches for financial education and information sharing.

November 27, 2023 Capital Budgeting Capital Structure Planning & Strategy

Navigating the Buffet of Investment Options

A Guide for Family Businesses

This week’s blog centers around the challenges of asset allocation and investment decisions for family businesses, touching upon the importance of understanding a family’s appetite for risk and growth. We explore how the meaning assigned to the family business influences investment choices options and the necessity of balancing risk and expected returns. While there may not be a perfect answer for deciding how to invest, reevaluating what your family business needs and what it means to you will help you decide more wisely.

November 14, 2023 Capital Structure Dividend Policy

Who Eats First, the Family or the Family Business?

As Thanksgiving approaches, it reminds us of the unique challenges family business directors face in balancing what the family needs with the needs of the family business. A clear understanding of what the business means to the family is essential if decisions about dividend policy and capital allocation are to be made in a coordinated manner. This week’s post emphasizes how the meaning of your family business can help your family business directors decide who eats first — the family or the family business — this Thanksgiving.

September 12, 2023

You Can’t Spend the Same Dollar Twice

In the world of family-run businesses, the task of capital allocation poses unique challenges, especially with a diverse shareholder base that includes family members with varying financial needs. While some depend heavily on dividends to fund their lifestyle, others focus more on long-term capital appreciation. This article delves into how successful family businesses strike a crucial balance between fueling business growth and meeting shareholders’ liquidity needs, exploring the tough decisions that can make or break both family harmony and business success.

September 5, 2023

Five Reasons to Conduct a Shareholder Survey

New Video Released on Family Business On Demand Resource Center

In this video, Atticus Frank breaks down the top five reasons why your family business should consider conducting a shareholder survey. He emphasizes how these surveys can provide critical insights into shareholder perspectives, facilitate informed business decisions, and enhance communication among family members involved in the business. From uncovering deeply held views to promoting educated and engaged shareholders, the video offers valuable guidance for multi-generational family businesses looking to align interests and build trust.

August 7, 2023 Performance Measurement Planning & Strategy

How to Communicate Financial Results to Family Shareholders

Whitepaper Release

Everyone agrees that communication promotes positive shareholder engagement, but what does it look like to communicate financial results effectively? In this week’s blog we introduce a whitepaper that offers practical suggestions for presenting key financial data in ways that family shareholders find useful.

May 22, 2023 Capital Budgeting Planning & Strategy

Lessons from the Oracle of Omaha

Warren Buffett is regarded as one of the world’s preeminent investors and most shrewd businessmen. Buffett and his partner, Charlie Munger recently drew thousands to Berkshire Hathaway’s annual meeting in Omaha. Buffett’s 2022 shareholder letter analyzes the company’s strategy, performance, and vision for the company going forward. This year’s letter provides several lessons for investors and family businesses alike. 

May 8, 2023 Planning & Strategy Special Topics

A Lifelong Succession Plan

Lessons from the Arnault Family

Bernard Arnault, founder of LVMH and the world’s wealthiest person, is meticulously planning the future of his luxury empire. Through a blend of creativity and pragmatism, Arnault has built LVMH into a global powerhouse while maintaining its status as a family business. Learn how the “Wolf in Cashmere” has prepared his children for leadership roles, and the Arnault family’s approach to long-term planning, stewardship, and collaboration.

May 1, 2023 Planning & Strategy Special Topics

Corporate Finance in 5 Minutes

New Video Released on Family Business On Demand Resource Center

Looking to unlock the secrets of corporate finance in just 5 minutes? This concise and engaging video will demystify the world of finance, providing you with an essential understanding of key concepts and strategies. Perfect for aspiring business leaders, entrepreneurs, or anyone looking to expand their knowledge, this video will give you the background you need to understand financial business decisions made by your company’s board and directors.

April 25, 2023 Special Topics

The New 3 Circles of Family Business and How to Be a Good Owner

Recap of the Transitions 2023 Conference

Mercer Capital sponsored and attended last week’s Transitions conference, where enterprising families came together to discuss the most critical topics for family business success. This year’s event revolved around the “3 New Circles” – engagement, succession, and governance – and tackled the essential questions family business leaders need to address. In addition, our breakout session, How to Be a Good Owner, presented 5 questions associated with developing good owners for your family business. How would you answer these questions?

February 1, 2023

Should You Conduct a Shareholder Survey?

Five Reasons Why It's a Good Idea

While private companies aren’t provided the constant, real-time feedback in terms of shareholder value afforded to public companies, ensuring that board, management, and shareholder incentives and preferences in privately held businesses are aligned is one step towards potentially maximizing shareholder value.  A shareholder survey can provide feedback to boards and management teams to avoid situations like the one Salesforce is currently facing, which finds itself amidst a potential shareholder-driven board takeover.  Since private company managers know precisely who their shareholders are, shouldn’t the characteristics and preferences of these shareholders be considered in the corporate decision-making process?  Absent these considerations, any attempts to “maximize shareholder value” are almost always destined to fail.  This week’s post outlines a few reasons why boards and management teams should consider a shareholder survey as part of their strategy to keep the incentives of all a company’s stakeholders aligned.   

November 28, 2022 Dividend Policy Planning & Strategy

Double Down or Cash Out: The Reinvestment or Distribution Decision

I recently got back from the AICPA’s Forensic and Valuation Services conference in Las Vegas.  While I came back richer in experience and CPE credit, the green felt of the blackjack table was less kind to my wallet. Matching your family shareholders’ growth objectives with their relative risk tolerance is a key directive for family business directors and one that is tied directly to what your family business means to you.  We highlight two corollary questions relating to growth, risk, and business meaning: investing decisions and distribution policy.

August 15, 2022 Planning & Strategy

Stock Buybacks and Family Businesses

Stock buybacks were in the news last week as the newly-passed Inflation Reduction Act includes a provision levying a 1% excise tax on share repurchases by public companies. As we’ve noted in previous posts, we question Congress’s grasp of the basic economics of a stock buyback, but Congress is not our focus today. 

Privately held family businesses are exempt from the tax, but directors need to understand the real economics of stock buybacks (or, in the case of family businesses, shareholder redemptions).

August 1, 2022 Planning & Strategy Special Topics

How to Have “The Talk” With Your Family Directors

In this post, we discuss three simple rules that can help promote impactful and productive dialogue between parents, children, and different generations in your family business: big picture first, be transparent, and remember priorities. Having these transitional and educational conversations is essential for family businesses.

April 12, 2022 Shareholder Liquidity

Is Redemption a Four-Letter Word?

As recently noted in the Wall Street Journal, large public companies are announcing share repurchase programs at a record pace.  Like many issues, what is straightforward for public companies becomes a bit more complicated for family businesses.  Two factors in particular increase the degree of difficulty for family businesses.  First, the motivation for redemptions can be complicated by personal relationships.  Second, price is not a given as it is for public companies. We discuss both of these in this week’s post.