If you are ending your marriage with a top executive in New York, dividing assets fairly can be challenging if it’s a high-asset divorce. In this situation, it is crucial that you research how executive compensation works. If, as a bonus, your spouse receives restricted stock awards or stock options, their overall pay can be extremely lucrative.
Divorcing a CEO requires a thorough examination of their pay structure
When experienced executives get paid, they likely receive bonuses, such as stock options and restricted stock awards. Knowing how to divide these assets can be difficult if you’re divorcing a CEO with an advanced pay structure. It may fluctuate in value or have restrictions on transfers or liquidation. Converting them to cash too soon can also result in a drop in value.
Restricted stock awards have time limits
One of the challenges of dividing assets with a high-powered executive who receives restricted stock awards is the vesting period attached to this bonus. A person can only sell them when they vest. If you plan on getting divorced soon, this restriction must be examined and dealt with.
Difficulty of dividing stock options in a divorce
Dividing a spouse’s stock options bonus in a high-asset divorce poses a challenge as well. These financial instruments allow an executive to buy stock in the future. This action can be beneficial as shares can be bought at the same price at which the stock was trading when the options were given. If the stock price continues to rise, it could result in a significant profit when the options are exercised.
Knowing how to handle these forms of executive compensation can be crucial if you’re divorcing a high-powered executive and need to make sure you receive a fair division of assets. Understanding the restrictions applied to these bonuses and examining each scenario is essential to ensuring they are distributed equitably and fairly.