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New York--What are implications of replacing part of cash wages with stock options?

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  • New York--What are implications of replacing part of cash wages with stock options?

    In New York, what provisions, if any, govern whether an employer can replace part of an executive employee's compensation with stock options?

    For example, if executive is normally paid $2000 cash/check per week, but company is now in dire straits and wants to pay executive $600 cash/check per week (keeping executive above minimum salary needed for exemption) with the remaining $1400 week in stock options, can the company do that? What New York statutes, cases, or other provisions, if any, govern this scenario?

    I've searched high and low, and can't find any such provisions. I also contacted the NY Dept. of Labor, and they informed me that they wouldn't care, as it would be outside their jurisdiction b/c the person is an exempt executive.

    Any help is appreciated.

  • #2
    There are no laws that specifically prohibit this, if that's what you're looking for. Employers can reduce an employee's salary on a going-forward basis as long as it doesn't fall below the statutory minimum wage. I'd suggest that the employee might want to start looking for a new job if the company is in dire straits.
    I am not able to respond to private messages. Thanks!

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    • #3
      Thanks for your response. Yes, I'm looking for a law or case that prohibits these exact circumstances or something like it (i.e., replacement of some cash wages with another form of non-cash compensation).

      Comment

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