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Compliance December 8, 2005
Hiring Bonus Not Distributable Marital Property
December 8, 2005 (PLANSPONSOR.com) - The New Jersey
Superior Court ruled that stock options awarded to a husband
as a signing and retention bonus by his new employer three
days before he filed for divorce should not have been
included in the distributable marital property.
Reported by Rebecca Moore
A Family Part Judge had ordered that the wife be awarded a one-half interest in the any stock options awarded to him before the divorce was filed. But, in reversing this decision, the appellate court noted that the options were awarded after the couple separated and also that they vested in one-fourth increments each year over four years.
Judge Edith Payne said in the opinion that the options were not an award for past employment, but instead were granted as an inducement to start employment and they vested over four years to encourage his continued employment; therefore, “the options in no fashion represented compensation attributable to the couple’s joint marital endeavors.”
The court rejected the wife’s argument that the husband’s qualifications for the position resulted from the skills and experience he was able to accumulate during the marriage saying, “Although that argument may be to an extent factually correct, we do not find it useful in the context of an equitable distribution determination, since its acceptance would permit a supportive spouse to claim assets accruing throughout the worklife of the divorced partner, regardless of when the divorce occurred.”
The opinion in Robertson v. Robertson can be viewed here .