Bonuses are a common and often significant form of compensation for a number of people who live and work in California, particularly those in certain professional fields. In In re Marriage of Finby, the state’s Fourth District Court of Appeals explains that all or some of the money is likely to be deemed community property to be divided among spouses in the event of divorce.Husband and Wife married in 1985 and separated 15 years later in February 2010. Wife worked as a financial advisor during the course of the marriage and was employed by UBS before signing a contract with Wachovia in 2009. The company was later purchased by Wells Fargo.
Wife’s contract with Wells Fargo provided for a variety of bonuses, including a “transitional bonus” of more than $2.8 million. The bonus was premised on the fact that she had developed a list of clients – referred to as her “book of business” – whose investments were worth more than $192 million at the time and whose accounts were expected to go with her to the new job. Under the terms of the contract, the bonus was conditioned on Wife’s staying at Wells Fargo for more than 9 years and maintaining a gross production level of over $1.12 million, as determined on an annual basis. Wife opted to obtain the complete amount of the bonus immediately, however, and signed a loan agreement with her employer under which it agreed to forgive $27,700 each month over the course of 112 months. If Wife stopped working at any time during the period, the company had the right to demand the entire amount remaining on the bonus/loan.