IS A CEO’S SEVERANCE PAY MARITAL PROPERTY?
Mark Hurd, ex CEO of HP, who quit last week amid a sexual harassment scandal, reportedly got a seven figure severance package as the company ushered him out of the door. According to Bloomberg:
Hurd will get a severance payment of $12.2 million, plus other benefits that include a prorated vesting settlement of 330,177 restricted HP shares. He received $30.3 million in compensation in 2009 and $42.4 million the year before.
Wow. Twelve million plus! That is a lot. If wife Paula were to divorce Mr. Hurd because of this scandal, all of the cash would likely be marital property. As would all the monies he’s received in compensation up until now – assuming no pre or post nup that says otherwise. Of course, with regard to the stocks, those are more complicated. Not so sure if all of it would be marital property. It really would depend on when they vest. This idea of a “prorated vesting” settlement…that could create a complication if in fact his wife asked for a divorce now. She would only be able to tap any portion of the stock value that has already vested at the time of the filing of a divorce petition.
But, to answer the question posed in the title, yes, severance pay is totally marital property.