Not every valuable asset appears in a bank account or investment portfolio. An executive’s compensation package may include benefits with financial value beyond a base salary, even if they are not paid right away or owned outright.

Because these benefits do not resemble traditional assets, they can be easy to overlook in a high-asset divorce. Looking at the full compensation package can provide a more complete picture of the finances connected to your marriage.

Compensation that may be easy to overlook

Executive compensation can include more than a salary and annual bonus. It may also include employer-paid benefits and compensation that will not be paid until a later date. The following forms of compensation may require closer review:

• Deferred bonuses: Payments for work completed now may not become due until a future date.
• Nonqualified deferred compensation: Earnings can remain unpaid until retirement or another event set by the employer’s plan.
• Company cars or vehicle allowances: Employer benefits may cover transportation costs that would otherwise come from household funds.
• Country club or professional memberships: Paid fees and dues can reduce personal expenses during the marriage.
• Travel or housing benefits: Employer payments may cover costs that the family would otherwise pay.

Courts do not treat every executive benefit the same way during a divorce. When a spouse earns a benefit, who owns it and how the plan pays it can all affect whether it forms part of the marital estate.

How courts may treat executive compensation

Texas generally presumes that property acquired during marriage is community property. Deferred compensation can raise questions because the payment date does not always determine whether the benefit forms part of the marital estate. The type of compensation and the terms of the plan can also affect that determination.

Employer-paid perks can raises different issues. A company car or country club membership may belong to the employer rather than your spouse, which can affect whether the benefit itself is part of the marital estate. Even so, those perks may still help explain the financial value they provided during the marriage.

The compensation package can tell a bigger story

Base salary alone may not reflect the full value of an executive’s compensation. Deferred payments and employer-paid benefits can contribute to the marital financial picture in different ways, depending on the type of benefit and the terms attached to it.

Employment agreements, bonus plans and benefit statements often provide the details that distinguish one benefit from another. Together, they can paint a more complete picture of the compensation connected to the marriage.