Now, we will consider the role that financial complexity played in undermining the fate of the trial court decision in the Supreme Judicial Court’s (SJC) Young v. Young. The SJC reports that:
…the [trial] judge found that, because of "the complex nature of [the husband's] compensation over and above his base salary and bonus," and because of "the constantly shifting nature of [the husband's] compensation," "it is reasonable and fair in the circumstances" to award alimony to the wife in the amount of thirty-three percent of the husband's gross income, rather than a fixed amount. (Italics ours)
The husband’s employment income arose from seven different compensation programs, including stock options, bonuses, investor entity units and discount stock purchase program opportunities. The various compensation modes featured differing consistencies, liquidity and transferability attributes, “…both considerable and variable”.
The SJC worried that the trial court’s self-adjusting alimony award (one-third of the husband’s gross pre-tax compensation) would lead to uncertainty of implementation, causing “continued strife” between the parties, citing the potential for inexact drafting and employer-employee collusion (to depress applicable income). The trial judge implicitly recognized the chance of future contention by appointing a special master, to keep the peace. Think: alimony coordinator.
The SJC deadpanned that: “Not everyone can afford a special master.”
If Mr. Young were simply a salaried employee, without the corporate power to manipulate his compensation, might the result have been different?