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How to handle executive compensation in a divorce

On Behalf of | Mar 9, 2023 | Divorce |

Divorce is rarely straightforward, but matters become more complex in a high-asset divorce. It’s easy to make mistakes when executive compensation is involved, so it’s something to be aware of if you’re getting divorced in Wisconsin or anywhere else.

There may be an uptick in divorces that involve executive compensation

Experts anticipate that the number of people who receive executive compensation will rise significantly in the years to come. More than 15 million workers already have restricted stock plans and stock options. This means the number of divorces that executive compensation will play into is bound to skyrocket.

Executive compensation is one way that companies attract and retain top talent. When times are hard and a company’s profits shrink, executive compensation can be used as an effective tool to prevent top talent from deserting the company. This means that these benefits usually have significant value. In a marriage, both spouses may benefit significantly from this compensation, which means that it must be considered during a divorce settlement.

What makes a divorce so complicated when there’s more money involved?

When executive compensation assets play into a divorce, one aspect that may not be considered thoroughly enough or left out of your considerations entirely is the way these assets are going to be taxed. If you fail to heed the tax consequences, it’s all too easy for money to go to waste by being left on the negotiation table.

It behooves you to understand these numerous and intricate financial holdings. The more familiar you are with your assets and how they work, the higher your chances of negotiating an equitable divorce settlement.