Case | HBS Case Collection | March 1995

Donald Salter Communications, Inc.

by Stuart C. Gilson and Jeremy Cott


A new CEO is hired to manage the turnaround of a family-owned newspaper publisher. In a departure from previous management, he implements a new compensation scheme that explicitly ties executive pay to market-value-based measures of firm performance. Because the company is not publicly traded, payoffs under the executive compensation plan are based on the firm's appraised value. Determining a value for this company (including any value created by the turnaround manager) is a complicated exercise. Additional complications arise because the firm's value also determines potential cash distributions to family members who wish to sell their shares back to the company. Certain family goals may also be inconsistent with the CEO's objective of maximizing the present value of the firm's assets.

Keywords: Family Business; Transformation; Asset Management; Wages; Balanced Scorecard; Family Ownership; Motivation and Incentives; Valuation; Journalism and News Industry;


Gilson, Stuart C., and Jeremy Cott. "Donald Salter Communications, Inc." Harvard Business School Case 295-114, March 1995.