Are stock grants considered in determining child support and alimony?
When a divorce involves an executive with options that are a significant portion of his or her salary, a growing number of courts are looking at the exercise of options as a source of deferred income. Future grants of stock options, restricted stock, or other equity based compensation not divided as assets during the divorce are being treated as income for the purposes of awarding child support and alimony. In addition to cash based compensation, vested and exercised options with the underlying stock sold are the simplest means for calculating additional income for support purposes. Vested and exercised options with the underlying stock not sold can also be used. Since the stock could easily be converted to cash it is possible to calculate the income. Unvested options are generally not considered in the definition of income. Unlike property settlements, child support payments can be re-examined at the courts discretion. For example, if a support paying parent s income has substantially
