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Valuating employee stock options for separating spouses

Friday, February 10, 2017 @ 9:29 AM | By Paul Mandel and Suzy Lendvay

​​​​Under the Family Law Act, when spouses separate they are required to equalize assets. Where a spouse has received employee stock options (ESOs) as part of their compensation, these assets are subject to equalization and reported on the statement of net family property (NFP). This article discusses certain issues that arise in the valuation of ESOs.

Let’s look at the following scenario: You are acting as counsel for Mrs. Jones, who is going through a matrimonial separation. She claims an ESO asset on her NFO statement...