When one or both spouses hold executive positions, divorce can involve far more than a paycheck. High-level professionals often receive complex forms of compensation such as stock options, restricted stock units (RSUs), deferred bonuses, and profit-sharing plans. Each of these assets can have significant present and future value, and dividing them fairly under California law requires careful financial and legal analysis.
At Fernandez Law Group, our team of experienced Los Angeles family law attorneys understands the unique challenges executive compensation creates during divorce. We help clients protect their interests by accurately identifying, valuing, and dividing all forms of compensation.
What Counts as Executive Compensation in California Divorce?
California is a community property state, meaning that most income and assets acquired during the marriage are owned equally by both spouses. However, executive compensation packages often blend current earnings with future benefits, creating questions about which portions are community property and which are separate.
Common forms of executive compensation include:
- Stock options allow the holder to purchase company shares at a set price.
- Restricted Stock Units (RSUs) that vest over time or based on performance goals.
- Bonuses or incentive pay are tied to company or individual success.
- Deferred compensation plans are designed to reward long-term employment or retirement.
The timing of when these benefits were granted, earned, and vested determines whether they are divided in a divorce.
How Are Stock Options and RSUs Divided?
Stock options and RSUs are among the most complex assets to divide because their value often depends on future events such as continued employment or company performance. Courts in California use formulas such as the Hug or Nelson formulas to distinguish the marital portion of these benefits from the separate portion.
The key question is whether the compensation was granted for past performance during the marriage or as an incentive for future work after separation. If given as a reward for past efforts, it is typically considered community property. If tied to future service, it may be separate property.
Our attorneys work with financial experts and forensic accountants to determine grant dates, vesting schedules, and fair market value, ensuring clients receive the portion to which they are legally entitled.
How Are Bonuses and Deferred Compensation Handled?
Bonuses and deferred income can also raise complex timing and valuation issues. If a bonus was earned during the marriage but paid after separation, it may still be considered community property. Similarly, deferred compensation plans must be examined to see when the right to payment was established and whether any portion was earned before the date of separation.
We ensure that all bonus structures, performance-based pay, and deferred income are accurately disclosed and accounted for. Hidden or mischaracterized compensation can significantly affect the outcome of property division and spousal support.
Protecting Your Interests During High-Value Divorces
Executive compensation disputes often arise in high-net-worth divorces where both spouses depend on future payouts or long-term equity plans. Proper handling of these assets requires not only legal experience but also strategic negotiation to minimize tax consequences and preserve liquidity.
At Fernandez Law Group, our attorneys regularly represent professionals in finance, technology, healthcare, and corporate management. We identify all sources of income, clarify complex compensation structures, and secure fair outcomes for our clients through negotiation or litigation, as needed.
Speak with a Los Angeles Divorce Attorney Today
If your California divorce involves stock options, RSUs, or other executive compensation, experienced representation is essential. The team at Fernandez Law Group provides the knowledge and advocacy you need to navigate complex financial divisions with clarity and confidence.
Contact us today at 310-393-0236 or online to schedule a confidential consultation and learn how our Los Angeles County family law attorneys can help protect your financial future.