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Divorce and executive pay

On Behalf of | Feb 8, 2022 | Divorce

Don’t expect a divorce between executive employees to be entirely straightforward. Even when spouses come to an agreement about ending a marriage, large assets are complicated to divide. The larger the financial value is, the better that the account or fund might be hidden. When couples in Washington have a large net worth or corporate employment, the assets to divide may include executive compensation.

Executive compensation in a divorce

Among the assets that are difficult to track, executive compensation packages have special conditions in a high-asset divorce. Unlike common wages, which are paid in the short term, executive packages have maturity dates. This compensation option only matures at a specific time, which means that no one has instant claim to it as property. Claims that might stand during a divorce mean nothing, however, if you can’t even uncover where the compensation is.

Stock options

Stock options are executive packages that have a grant price. Instead of getting stocks, the employee receives today’s price at a future date. A stock option at a current price of $25 each, for example, could increase after 15 years. The matured stock option then gives its owner the right to buy shares, 15 years later, at the discounted price of $25.

Restricted awards

Restricted stock payments also have a maturity date. An executive immediately owns the stock they’re given via a stock award. However, the employee’s continued employment is key to them cashing out those stocks. Until matured, this type of executive package is out of reach.

High-asset divorces in Washington state

Managing a divorce with valuable assets calls for some preparation. Assets under the umbrella of executive compensation take time, consideration and research to uncover.