Explain the kEy components that are taken into consideration when deteremining owner$-$manager compensation.

Objectives:

$12\mathrm{.}1$ Explain the principles of management compensation in the context of an owner$-$managed corporation.

$12\mathrm{.}2$ Describe the basic trade off between the payment of salary and the payment of dividends for the owner$-$

manager

$12\mathrm{.}3$ Explain the tax consequenoes of receiving dividends versus salary.

$12\mathrm{.}4$ Summarize the various non$-$tax factors that must be taken into consideration in making salary vs$.$

dividend decisions.