I can't answer that. Assuming no compensation of any type, it sounds ok. No different than when I took a co-worker's child up for their first flight. But here's my problem. My comment to @bflynn earlier was that I don't have the luxury others here have of making assumptions about underlying details. That's because of the small chance that a "yes you can" from me will lead someone to believe it's ok, which then turns out wrong. That raises an ethical problem for me.@midlifeflyer - Would a twist on this be allowed?
Is it allowed by regulation for a commercial pilot (with Class II Med) to be paid by aircraft owner to pilot owner's aircraft with owner's family and/or owner's friends, whether owner is present in aircraft or not, and where owner is not receiving compensation (of any sort) for the flight nor are the other passengers providing any compensation (of any sort) to anybody for the flight?
This is an area where the smallest detail can count. And enforcement climate counts too. There are some pretty clear yes and no answers here but variations on a theme are tricky. There have been (and are) practices technically on the edges that were widely accepted for years when suddenly the Chief Counsel was asked the wrong question or the wrong incident came along.
I do answer questions like this in private consultations. But even then, those answers are more often about the degree of risk than "oh, that's no problem at all."
BTW, I noticed a big issue with the OP immediately. Asked about a CFI carrying passengers. Unless we are talking about a CFI bringing a student's spouse/partner along during a lesson, the answer has nothing to do with being a CFI.