In McAfee v. Metro. Life Ins. Co., 2006 U.S. Dist. LEXIS 33070 (E.D. Cal. May 24, 2006), the court held that plaintiff’s performance-based stock options should be considered “predisability earnings” that are included in the calculation for benefits. The plaintiff participated in an executive incentive compensation program. The program included various benefits such as disability insurance. The plaintiff was injured and learned that stock options would not be considered earnings for calculating the amount of benefits he would receive. A federal district court ruled that the disability plan administrator violated ERISA by failing to include the plaintiff’s stock options in its calculation of disability benefits. The stock options qualified as earnings.
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