By: WISCONSIN LAW JOURNAL STAFF//February 21, 2011//
Employment
ERISA
It is not arbitrary or capricious for an ERISA plan to conclude that stock-linked compensation is a form of bonus.
“In the business world, a ‘bonus’ is understood to be a discretionary component of compensation. If Comrie had a contractual entitlement to a specific number of vested stock options annually, then he might have a persuasive argument that the stock-linked income, though variable (it depends on how IPSCO’s stock fares in the market), was not a ‘bonus.’ But at oral argument Comrie’s lawyer told us that, although Comrie was entitled to some options, how many he received each year was discretionary. That makes the stock-linked income look like a bonus, just as the Plan concluded.”
Affirmed.
10-2393 Comrie v. IPSCO, Inc.
Appeal from the United States District Court for the Northern District of Illinois, Darrah, J., Easterbrook, J.