Appellant urges appeals court to treat vested stock options as alimony income

An attorney for the appellant in McKay v. Ford told the Massachusetts Appeals Court that stock options and other equity incentives should be treated as alimony income when they vest, not only when the husband sells them.

"I'm asking the court today to vacate paragraph two of the judgment of contempt entered October 15, 2024," said attorney Glenn Schledder, who argued he had asked the court to find the defendant in contempt for failing to pay alimony on income from stock options and to include statutory interest. Schledder said the separation agreement explicitly included stock options in its income definition and that treating the options as income upon vesting prevents manipulation of liquidation timing.

The panel pressed on how the contract's phrase "upon vesting" interacts with the agreement's other language about "further events" and board endorsement. Justice Tune asked whether any necessary "future event" could realistically prevent a spouse from liquidating vested options, noting that when options vest they are ordinarily exercisable in a publicly traded company. Schledder replied that the agreement's drafting allowed for a "tug and pull" over whether vesting alone or a later event should trigger inclusion in income.

Appellee counsel Claire Forkner defended the trial court's judgment, saying Judge Burchill authored a detailed 79‑page decision that clarified the parties' rights and provided future certainty for alimony. Forkner noted enforcement mechanisms in the separation agreement — including a covenant of good faith and fair dealing — and emphasized that the trial court imposed an "upon liquidation" rule to give the parties predictable enforcement points.

Justices asked practical questions the parties had not fully quantified in the record: whether the judge actually took judicial notice of historical stock prices, where those prices appear in the record, and how large the financial difference would be if options were counted at vesting versus later liquidation. Counsel acknowledged the trial record contains a judicial‑notice order but said she did not have the exhibit number readily available.

The court also discussed the agreement's annual alimony cap, which counsel said is $1.4 million; justices noted that even if options were treated as income, the cap could limit what a spouse ultimately receives in a year. The panel concluded the argument after counsel and the court debated whether the trial judge had properly "clarified" an ambiguous clause or effectively rewrote it. The case is submitted to the court.