World: Take the house, take the cash - but let me keep my future

Is a good corporate wife entitled to money you haven't earned yet? David Usborne looks at an anxiously-observed divorce case
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The Independent Online
From a closely watched divorce trial on the "Gold Coast" of Connecticut, this warning has gone out to the new corporate aristocracy of America: if you ditch your spouse (even for someone older), expect to pay more than just alimony. You may be sued for half of everything; half, in fact, of your very career.

This was the fate that faced Gary Wendt, 55, who is the chief executive of GE Capital, a hugely profitable subsidiary of General Electric. Two years ago he told his wife of 31 years, Lorna, 54, that he wanted a divorce. He has since moved in with a woman seven years older and a grandmother.

Lorna was offered an amicable settlement worth $11m (pounds 6.5m) - a good chunk, even by the standards of this excessively wealthy slice of America. This wife, who had met her husband in high school, was unmoved, however.

Instead, Mrs Wendt went to trial asking that a value be put on the entirety of Mr Wendt's glittering career at GE - including the 10 years it is still likely to run - and that it be split. That meant dividing not just current financial worth and assets, but also estimated future earnings from salary, stocks, stock options, retirement bonuses and pension incomes.

What was significant about the trial, which ended in a Stamford courthouse last week, was Mrs Wendt's reasoning. Half of all the benefits of her husband's career were due to her, she argued, because she had contributed as much to its success as he had. Never mind that he had been the one going into the office every day and that she had essentially stayed at home.

"I was not a 10 per cent wife," Mrs Wendt declared, referring to the $100m-plus figure her advisers put on her husband's total value, present and future. "We earned this together. He brought home the bacon, but I shopped for it, cooked it and cleaned up after it."

Mrs Wendt was very specific. She told the court how she and her husband had started out with just $2,500 between them. She worked as a music teacher - a job she later gave up - to put him through Harvard. She still has the PhT diploma given to her by the dean's wife ("Putting hubby Through").

Once Gary had started his ascent through GE, Mrs Wendt did more than just spend the spoils. She raised two daughters, entertained clients and colleagues in lavish style at her home, moved the family five different times and travelled as a valuable companion with her husband on numerous business trips.

"I took my job very seriously," Mrs Wendt argued. "Marriage is a partnership, and I should be entitled to 50 per cent. I gave 31 years of my life... and I worked hard and I was very loyal."

Mr Wendt tried to dispute the logic. In a television interview last spring, he spat: "She didn't produce one witness from GE who said she was important. She went along on trips that were dream trips... Do you think getting dressed up to go out to dinner in New York is hard work?"

The divorce went through last Wednesday, and Mrs Wendt was successful up to a point. At first sight, she was awarded roughly $20m, much more than the $11m first offered, though clearly also not the full 50 per cent she was seeking. But only when Judge Kevin Tierney issues his full 465- page decision next year will the full extent of her victory be calculable.

Among the benefits that were awarded to Mrs Wendt: alimony, half of the couple's property holdings (including two houses in Connecticut and another in the Florida Keys), half of their stock, half of Mr Wendt's primary pension plan and even a cash payment in respect of his stock options. She also retained country club memberships as well as a special Macy's department store credit card that gives 45 per cent discounts.

She will not, however, receive any of her husband's restricted GE stock or of his supplemental (Long Performance Reward) bonus pension plan. Nor will she receive any benefits with regard to future earnings.

"We are not happy with the amount," one of her lawyers said of the preliminary ruling. "But we definitely made a point. Some of the boys in the boardrooms will be really unhappy when they read this." Mr Wendt, meanwhile, also professed satisfaction. "She gets half of the cash and property in our marital estate... and I get to keep my future."

Nor, meanwhile, does his reputation seem to have suffered from the battle. His name continues to be mentioned as a possible successor to Jack Welch, the supremo of all of General Electric. After all, a spokeswoman for Mr Wendt pointed out, "he didn't run off with a 25-year-old secretary, as some people might think."

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