Revamped Bonuses Screw Up Wall St. Divorces

Deferred stock payments complicate settlements
By Kevin Spak,  Newser Staff
Posted Mar 25, 2010 11:32 AM CDT
In this Sept. 15, 2008, file photo, a Wall St. street sign is seen near the New York Stock Exchange.   (AP Photo/Jin Lee)

(Newser) – Wall Street’s new post-crisis pay structures are making divorce a complicated proposition for many bankers, traders, and executives. To encourage long-term thinking, many bonuses are now composed largely of stock that can’t be converted to cash for years. It’s “throwing a massive monkey wrench into the works of family law,” one compensation consultant tells Bloomberg.

“Changes to compensation are creating a horror show when dealing with the other spouse’s budget and support package for children,” says one accountant. Alimony used to be based on the past four years of compensation. But that’s no longer an accurate assessment, because after the changes, “no one knows where it’s going to go,” says one attorney. Another attributes the decline in New York divorces to the confusion.

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