Dividing marital property in a high net worth divorce presents unique challenges—especially when one spouse is a corporate executive. Standard salaries are easy to define and split, but executive compensation packages are often anything but standard. Restricted stock units (RSUs), stock options, performance bonuses, and deferred compensation can represent millions in marital value, yet they’re among the most complex and misunderstood assets in a Florida divorce.
If you or your spouse hold a significant corporate position with non-traditional compensation, understanding how these assets are handled in divorce is critical. Missteps in valuation, classification, or timing can result in costly errors, long-term inequities, and even IRS issues.
As a Tampa high asset divorce lawyer with years of experience handling complex financial divorces, I know the strategies and tools needed to protect executive wealth or ensure a fair share of it. This article provides a comprehensive breakdown of how executive compensation is evaluated and divided under Florida law—and what high net worth clients need to watch for.
Why Executive Compensation Is More Complicated Than Salary
Corporate executives are often compensated in ways that tie their personal earnings to company performance or long-term growth. While a base salary might be modest, total compensation often includes:
- Restricted Stock Units (RSUs)
- Stock options (ISOs and NSOs)
- Deferred compensation plans
- Signing bonuses
- Retention bonuses
- Profit-sharing
- Golden parachute packages
- Severance agreements
- Carried interest
- Phantom equity
These benefits may vest over time, depend on performance milestones, or contain clauses tied to continued employment or change in company control. This complexity creates serious challenges during divorce, especially when one spouse lacks the documentation or financial sophistication to fully understand the compensation structure.
A seasoned Tampa high asset divorce lawyer knows how to decode these packages, work with forensic and financial experts, and structure settlements that account for both current and future compensation.
Marital vs. Non-Marital: The Starting Point in Florida
Florida follows the principle of equitable distribution. That means marital property is divided fairly—but not always equally—while non-marital property remains separate.
So, the first question is: Are executive compensation benefits marital or non-marital?
Marital Property May Include:
- Stock options or RSUs granted during the marriage, even if not yet vested
- Deferred bonuses earned during the marriage but payable after divorce
- Performance incentives tied to work done during the marriage
- Benefits earned through shared marital effort (e.g., support from the non-earning spouse)
Non-Marital Property May Include:
- Options or RSUs granted before the marriage and not commingled
- Compensation based on post-separation or post-filing performance
- Deferred comp earned and awarded prior to the marriage
Determining the marital portion is not always black and white. A Tampa high asset divorce lawyer works to parse the grant documents, review employment agreements, and if needed, apply coverture formulas (such as the “time rule”) to isolate the divisible portion.
Valuing Stock Options and RSUs in Divorce
One of the most difficult elements of dividing executive compensation is valuation. How do you value stock that isn’t vested? What is the worth of a performance bonus that might never materialize? These questions are particularly complex in volatile markets or for executives at startups and private firms.
Key Valuation Factors:
- Vesting schedules
- Company performance triggers
- Time between grant and divorce filing
- Whether stock is transferable or restricted
- Current market value (for public companies)
- Projected company valuation (for private companies)
A Tampa high asset divorce lawyer will often consult with financial experts, including valuation analysts and forensic accountants, to determine the fair value of unvested equity. For example:
- For RSUs: These are generally easier to value than options. They may be treated as income when vested and as marital property if awarded during the marriage.
- For Stock Options: These may be “in the money” (valuable) or “out of the money” (worthless), depending on the strike price and current market value. Options may be valued using the Black-Scholes model or similar financial analysis.
The key in all cases is clarity. A poorly negotiated divorce settlement may overstate or understate the value of these assets—causing one party to walk away with far more than the other.
When Do Stock Options Become Marital Property?
A common misconception is that if stock options or RSUs haven’t vested yet, they don’t count in the divorce. That’s not true under Florida law.
Courts will consider whether the award was:
- For past service (during the marriage)
- For future performance (after separation)
- A mix of both (requiring time-based formulas to allocate)
In high asset divorce cases, it’s common to apply a coverture formula. One such example looks like this:
Marital portion = (months married during grant period) ÷ (total months in grant period)
So if an executive was granted stock options in year three of a five-year marriage, and the options vest over four years, some portion of the stock options may be classified as marital even if they won’t vest until after the divorce.
A Tampa high asset divorce lawyer will advocate for a precise, evidence-based allocation—and ensure your marital share is neither exaggerated nor undervalued.
Tax Implications of Dividing Executive Compensation
Tax treatment is a critical issue in dividing equity compensation. RSUs and options have different tax consequences depending on when they vest, whether they’re exercised, and how they’re transferred. Missteps here can trigger significant IRS penalties or income reporting issues.
RSUs:
- Taxed as ordinary income when vested
- Often withheld at standard rates that may be too low
- May be subject to supplemental wage withholding
Stock Options:
- Incentive stock options (ISOs) have unique tax benefits but cannot be transferred
- Non-qualified stock options (NSOs) are taxed at exercise
- Transfers of options may disqualify favorable tax treatment
In many cases, equity compensation cannot legally be transferred. Instead, the spouse receiving the award may be required to pay a cash equivalent or to share the proceeds after exercise.
A Tampa high asset divorce lawyer will work with tax professionals to structure support and settlement terms in a way that accounts for tax liabilities and avoids costly surprises. For example:
- Including indemnity clauses for future tax bills
- Using QDRO-like mechanisms for deferred plans
- Creating trust-like payment provisions for future stock awards
Handling Deferred Compensation and Bonuses
Executive compensation often includes bonuses or incentive awards that are delayed—or contingent on company performance. These benefits may be subject to:
- Vesting conditions
- Non-compete clauses
- Retention timelines
- Employer discretion
Deferred bonuses earned during the marriage are usually considered marital. However, collecting them requires creative legal solutions when the bonus is not yet paid or is subject to uncertainty.
Your Tampa high asset divorce lawyer may negotiate for:
- A percentage of the net amount once received
- A present-value cash offset using a discounted valuation
- Delayed distribution with agreed timelines
Clear language in the marital settlement agreement can prevent later fights over uncollected compensation or misinterpretation of post-divorce income.
What If the Company Goes Public or Is Sold After the Divorce?
This is a major issue in executive divorces involving startup founders, tech company employees, or partners in closely held companies.
If a spouse receives stock or options during the marriage in a private company, what happens if that company:
- Goes public in an IPO?
- Is acquired or merged?
- Experiences a sudden growth in share price?
Post-divorce events can create massive value from what appeared to be a modest holding. That’s why your divorce agreement must address:
- Valuation methods for illiquid shares
- Future payments triggered by liquidity events
- Equity clawback or profit-sharing clauses
- Ongoing disclosure obligations
A Tampa high asset divorce lawyer will structure settlement agreements that anticipate future windfalls and protect both parties from post-divorce disputes.
Strategies for Dividing Executive Compensation
There’s no one-size-fits-all approach to dividing stock options or executive packages. Here are some of the most common strategies used:
1. Deferred Distribution
The titled spouse retains the equity but agrees to pay the other party their share when the options are exercised or the RSUs vest.
- Reduces need for immediate liquidity
- Requires detailed payment and accounting terms
- Works best when the titled spouse remains employed
2. Buyout
One party pays the other a lump sum or trades other marital assets to keep the stock or options.
- Clean break with no future entanglement
- Requires accurate current valuation
- May not account for upside if stock increases in value
3. Proportional Vesting
A percentage of each future vesting event is shared with the non-employee spouse.
- Preserves tax advantages and employer compliance
- Requires long-term cooperation and transparency
- May create ongoing friction or enforcement issues
Your Tampa high asset divorce lawyer will help you weigh the pros and cons of each approach based on your goals, your cash position, and your ability to manage future obligations.
How Private Companies and Startups Complicate the Process
When equity is tied to a private business, it introduces added complications:
- No established market value
- Restrictions on transfer or sale
- Vesting linked to company liquidity events
- Opaque or discretionary company valuation policies
As a result, divorce attorneys must often use valuation specialists who consider:
- Comparable companies and transactions
- Revenue projections and earnings multiples
- Founder dilution
- Option pool reserves
- Employee retention risk
The risk of overpaying or undervaluing is high. A Tampa high asset divorce lawyer will ensure you don’t walk away from what could become a multi-million-dollar asset—or overcommit based on uncertain numbers.
FAQ: Executive Compensation in Florida Divorce
Are RSUs considered marital property?
If granted during the marriage, yes—especially if intended as compensation for marital service. A portion may still be marital even if not yet vested.
Can stock options be transferred to my spouse?
Most plans prohibit transfers. Instead, courts often award a share of future proceeds upon exercise, or provide a cash offset.
Do I need to value unvested options in my divorce?
Yes. Even if not vested, unvested options may represent compensation for work performed during the marriage and must be accounted for.
What happens if my spouse’s stock becomes valuable after our divorce?
If your settlement doesn’t include future protections, you may be out of luck. That’s why forward-thinking agreement language is critical.
Can I avoid paying alimony if my spouse is getting part of my stock options?
Not automatically. Alimony is based on income and need. However, property division may reduce or offset spousal support.
What if my spouse is hiding stock awards or bonuses?
Your Tampa high asset divorce lawyer can issue subpoenas, depose company representatives, and work with forensic experts to uncover hidden compensation.
Do executive comp packages affect child support?
Yes. Income for child support includes stock options, bonuses, and deferred compensation—if it’s part of total earnings.
Is phantom stock treated like real stock?
Yes. If phantom equity has monetary value or is used for compensation, it may be treated as a marital asset and included in property division.
Can I modify my divorce if new stock vests post-judgment?
If your agreement allows for post-judgment sharing or includes continuing disclosure, you may have a claim. If not, you likely cannot.
Why do I need a Tampa high asset divorce lawyer for executive compensation?
Because standard family law strategies don’t cover the complexity of equity, tax, and corporate compensation. A lawyer who understands these systems can protect your future and prevent costly mistakes.
Dividing executive compensation in a Florida divorce is not just a legal issue—it’s a financial minefield. RSUs, stock options, bonuses, and deferred income all require sophisticated analysis and precision negotiation. In high asset cases, your settlement must do more than “check the box.” It must protect your interests today and safeguard your financial security for years to come.
At The McKinney Law Group, we work with business leaders, senior executives, and professionals whose compensation goes beyond a paycheck. If you’re facing divorce and your financial world includes complex compensation structures, contact a Tampa high asset divorce lawyer who knows how to advocate for every asset, every future dollar, and every legal right you have.
The future is yours to secure. Let us help you do it with strategy, discretion, and strength.
The McKinney Law Group: Tampa Divorce Attorneys Helping You Protect What You’ve Built
If you’ve built a life, a business, or a family—and now face divorce—you deserve an attorney who knows how to protect it all. At The McKinney Law Group, we help Tampa clients preserve their hard-earned assets and relationships through strategic, focused divorce representation.
We provide:
✔ Business valuation and division strategies
✔ Negotiating spousal support that reflects your contributions
✔ Co-parenting plans that promote family stability
✔ Litigation support for complex or high-conflict divorces
✔ Personalized attention from a firm that puts your goals first
Let us protect what matters most—so you can move forward with confidence.
Call 813-428-3400 or email [email protected] to schedule your consultation today.