Valuing Executive Compensation

One of the assets of a marriage might be executive compensation such as:

  • Stock options
  • Restricted share units
  • Stock grants
  • Phantom stock
  • Performance awards
  • Bonuses
  • Executive perquisites
  • Severance awards

Some types of executive compensation will be marital property. Some types will be separate property. The basic dividing line is whether the benefit was awarded for past performance or for future performance (after the divorce). If a benefit carries a lot of risk or is not easy to value at the time of a divorce, it may be divided “if, as, and when” the employee receives it, even though that is after the divorce.

The benefits will also be taxed in different ways, potentially. Finally, some benefits will be included as income for the purposes of determining future child support and maintenance.