The divorce complexities of executive compensation

On Behalf of | Aug 3, 2022 | Divorce |

New Hampshire couples may have to negotiate the complexities of executive compensation during a divorce. Executive bonuses and incentives can complicate what might otherwise be straightforward assessments of what an individual earns, making a financial settlement more difficult.

Executive compensation during divorce

Executive compensation is bonuses, incentives and salaries paid to the highest earners in a corporation, such as the CEO or CFO. The spouses are the executives compensated during the divorce. State divorce laws and any signed agreements before, during and after the marriage largely dictate how assets get distributed.

In long marriages, losing track of your spouse’s earnings and assets is not uncommon. An annual review of the financial records is an excellent way to remain informed.

Executive compensation and stock options

Companies grant stock options as bonuses or incentives to employees. These stock options might come with restrictions such as how long they must be held, when they can be cashed out and how tax payments are handled.

Companies focus on their relationship with the employees. Stock option restrictions protect companies from liabilities during situations such as an employee’s divorce. Certain stock restrictions affect transferability.

Divorcing spouses often overlook these stock options leaving lots of money on the table. It’s important to get a full picture of marital finances before agreeing to divorce terms.

Executive compensation is complicated

Doing your research offers tremendous clarity on divorce processes and procedures. Understanding the law and what you and your spouse are entitled to keeps you armed and ready for the battle. Cooler heads prevail, but wise decision-makers reap benefits.