Dividing Stock Options

Answer:

Stock options are a common form of compensation in our economy. Whether they will be divided in the action for divorce depends upon when those stock options were granted and the reason for the grant. Sometimes the stock options are granted to retain an employee, sometimes in lieu of a bonus, and sometimes to convince an employee to come to work for a particular company.

When the stock options are granted is important; if stock options are granted after the date of commencement of the divorce proceedings in order to retain the employee, they are likely to be post-action, separate property. However, if the options were granted as a bonus for work that was undertaken before the action for divorce was commenced, the other spouse then has a solid claim that the options are in lieu of wages, ought to be considered by the court, and should be divided as a marital asset. Whether the options have vested or not is irrelevant to whether they will be divided. The question is rather about when they were granted, why they were granted, and if they constitute marital property.