Facts about executive compensation and divorce

On Behalf of | Aug 17, 2022 | Divorce |

“Executive compensation” refers to the total amount of money that New Jersey executives earn in salaries, bonuses and benefits. In many cases, divorce affects executive compensation.

How does divorce affect executive compensation?

The division of assets in a divorce can result in one spouse receiving less money than they would have if the couple had stayed together. This can impact the amount of money that an executive receives in their salary and bonus. Additionally, divorce can also affect the amount of money that an executive receives in benefits. For example, if one spouse is awarded the family home in a divorce, the other spouse may no longer be eligible for a mortgage benefit.

Additionally, divorce can impact an executive’s ability to receive stock options or other forms of equity-based compensation because in many cases stock options go to executives as part of their compensation package. However, if an executive gets divorced, they may be required to give up some of their stock options to their ex-spouse.

Protecting your executive compensation

First, you should make sure that you keep good records of all of your compensation, including your salary, bonus and benefits. This will help to ensure that you receive what you’re entitled to in the event of a divorce. Additionally, negotiating a fair division of assets with your ex-spouse will help to ensure that you both receive a fair share of the assets and can help to avoid any disputes. Finally, if you are awarded stock options or other forms of equity-based compensation, you should try to negotiate a buy-out clause with your ex-spouse. This will allow you to keep your stock options.

If you are going through a divorce, it is important to understand how it can affect your executive compensation. By taking the time to learn about the potential impact of divorce on your compensation, you can help to protect your financial interests.