Determining the Marital Portion of Restricted Stock Units
The State of New York uses the “DeJesus formula” – developed during the DeJesus v Dejesus case – to determine the portion of restricted stock units that constitute marital property. DeJesus is a time based formula where the numerate is the time from the grant of the stock plan until the commencement of the divorce and the denominator is the time from the grant until the interest in the stock vests. Prior to determining whether to use the DeJesus formula, one must determine whether the asset in question calls for the use of this formula. You must determine whether the portion under consideration was for past performance or is incentive-based compensation.
The Court should consider the following factors:
- Was this a reward for past services as a valued employee or to provide an incentive to retain the employee?
- Were the plans part of a key employee compensation package?
- What did the stock plans represent?
- How is the employee’s entitlement calculated?
- It should be noted that delay in receiving the vested stock does not necessarily indicate that it is incentive-based, which is why it is imperative to consider all of the factors.
Use the calculator below to estimate how restricted stock units will be treated in your divorce:
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*Use of Lisa Zeiderman’s DeJesus calculator does not create an attorney-client relationship between you and Lisa Zeiderman.
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As both a divorce attorney and a Certified Divorce Financial Analysts, Lisa Zeiderman has the skills and resources to ensure you an equitable share of marital property in your divorce. Call 914-488-2402 to schedule a consultation.