Kohl Business Industries, Essay Example

Principles used by James Cole to create the compensatory system for his three children

The first principle could be referred to as withholding strategy whereby assets were not dispersed yearly, but put away in a retirement type scheme. No life, health and disability coverage were offered to the children in this family business venture. Liquid assets accrued from the three companies overtime were not to be invested in the business immediately. James Cole also managed a portfolio of stocks, which formed a major part of the company’s holdings.

In principle the design seemed unconstitutional for children who work as managers in their individual businesses. Even though meeting six times per year all major decisions are made by 67 year old James Cole. Further this deferred action compensatory principle based on promises that one day they will be compensated from the assets, appears very primitive in execution of a huge long standing family real estate business. Consequently, a more transparent compensatory plan for successors and current investors, who are the children, must be developed. The principle should be one of shared investments whereby assets are distributed to individual companies at a specific time. In this plan all three children must be aware of the succession principle and offered training that discloses daddy James Cole financial secret in with holding compensation from  children managers  family owned business.

The difficulty James Cole seems to experiencing with his children as it pertains to the classified family business seems to be based on trust due to the divorcee with their mother. Likewise the children have their fears should he remarry without designing a solid compensation plan for them they are likely to losseallassets to the new wife.