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Understanding divorce and executive compensation

On Behalf of | Aug 2, 2022 | Divorce |

If you’re a high-level Pennsylvania executive, the possibility of a divorce can have major implications for your compensation package. Here’s what you need to know about how a divorce could affect your earnings.

What is an executive compensation package?

An executive compensation package is a set of benefits and perks that an executive receives in addition to their salary. It can include things like stock options, bonuses and health insurance. Usually, the value of an executive compensation package is based on the company’s performance. However, in some cases, the value of an executive compensation package can also be affected by personal factors, such as divorce.

How is the executive compensation determined?

When you get divorced, the court will look at a number of factors to determine how to divide your assets including your income and earnings potential. If you’re a high-level executive with a lucrative compensation package, the court may view that as an asset to be divided between you and your spouse. As a result, the value of your executive compensation package could be a factor in how much alimony you have to pay or how the property is divided in a divorce.

What are the implications of this?

If you’re going through a divorce, it’s important to be aware of how your executive compensation package could be affected. You may need to negotiate with your spouse about how to divide your assets, including your compensation package.

Alternatively, you may need to accept a lower salary or benefits package in order to keep your spouse from claiming a larger share of your earnings. Lastly, you may need to be prepared to pay alimony or give up other assets in order to keep your executive compensation package intact.

No matter what, it’s important to understand how your executive compensation package could be affected by a divorce before you make any decisions. Otherwise, you could end up with a much lower salary or benefits than you expected.