Stock options, restricted share units, and deferred bonuses are increasingly common forms of compensation — and among the most contested assets in a BC high-net-worth divorce. Here is how BC family law treats them.
Partially. BC courts apply a time-based proration: the portion of the vesting period that fell within the relationship is family property. So if an option was granted two years into a four-year vesting schedule at the date of separation, roughly half of its value is family property. Options granted after separation are generally excluded.
RSUs (restricted share units) are prorated the same way as stock options — the family property portion is the fraction of the vesting period that fell within the relationship. Performance conditions add complexity: PSUs that haven't vested because targets weren't met may be treated as having contingent or no current value, depending on the circumstances.
A deferred bonus earned through work performed during the relationship is generally family property even if it's paid out after separation. Courts look at whether the underlying work that generated the bonus was done during the relationship — if yes, the payment is family property in whole or in part.
The most common approaches are: (1) one spouse keeps all the options and compensates the other with equivalent liquid assets; (2) a deferred payment agreement where the holder pays the other spouse their share as the options vest and are exercised; or (3) an 'if and when' court order that gives the non-holder spouse their share at the time the options are actually received. Each approach has different risk and tax implications.