EQUITY COMPENSATION ISSUES IN DIVORCE
Defending against Inequitable Results
Founders, venture capital fund managers, sweat-equity investors, and executives experience a broad range of compensation structures. These can include stock options (including ISOs and NSOs), deferred compensation schemes, performance share units (PSUs), restricted stock units (RSUs) and carried interests. Our Firm is experienced in advising on the myriad of legal implications that arise in divorce stemming from equity compensation. Those issues include, but are not limited to:
- Valuation of stock of privately held businesses, including highly speculative startups;
- Allocation between community and separate interests based on grant date, vesting schedule, date of separation, and other factors;
- Tax implications of certain awards, particularly RSUs;
- Restrictions on transfer to the non-earning spouse; and
- Determination of what, if any, portion of a grant, exercise, or sale is appropriately treated as income available for either child or spousal support.
Our experience covers the gamut of these issues, from litigating the valuation of some of the most highly valued privately held companies (i.e. Unicorns), to determining the legally correct method of dividing RSUs granted during the marriage but earned at times afterwards.