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Appeals Court Questions How Pandemic-Era Equity Payouts Should Count for Alimony
Summary
In an appeal from a probate and family court judgment, counsel disputed whether a judge erred by treating pandemic-driven, equity-based compensation as ongoing income when calculating alimony and asset division.
The Massachusetts Appeals Court heard arguments about whether a probate judge erred in calculating alimony and asset division for a former executive whose compensation included significant pandemic-era equity awards.
Jared Spinelli, representing the husband, told the panel the trial judge committed "plain error" by using a near-$1,000,000 total-compensation figure that relied on short-term, post-separation equity payouts tied to COVID-era demand. Spinelli said the executive’s pay included base salary, a capped cash bonus and a long-term incentive program (LTIP) made up of stock options and performance units that vested over three years; he argued the LTIP’s recent surge was temporal and that the husband lacked the ability to sustain those levels at trial.
Nancy Fried, representing the appellee, urged the court to affirm. She said the judge took a conservative approach by selecting the lowest relevant Social Security earnings year and that the record—pay stubs, offer letters and Social Security earnings—supported the court’s findings about historical compensation. Fried said the judgment reflected the trial court’s considered view of the spouses’ comparative needs and the statutory factors for alimony.
Spinelli pressed that the judge failed to account for (1) the temporal nature of the equity uptick tied to pandemic demand for the company’s product, (2) findings that many granted options had negative value by trial, and (3) the husband’s diminished ability to realize LTIP compensation after a company spin-off and workforce reduction.
Fried replied that the judge followed Young and other family-law precedents, compared multiple earning years, and reasonably exercised discretion in setting alimony and certain caps. The justices queried whether the trial court used a lowest reasonable year or an average and asked whether the husband could seek a post-judgment modification if his income fell.
Counsel also identified alleged calculation errors in division-of-assets findings and disputed whether the court improperly refused late-filed financial statements; counsel for the appellee said any alleged math error was de minimis and that the judge considered advanced distributions and other contested items. The panel took the case under submission.
